First Round Capital has closed a new fund with $125 million in capital commitments, from limited partners like Princeton University, The University of Notre Dame and The Investment Fund for Foundations.
There had been speculation that this fund’s size was an indication that it was moving toward later-stage investing, but First Round co-founder Josh Kopelman says that the strategy hasn’t changed. “We still plan to make initial investments of around $500,000 in early-stage and seed-stage companies,” he told me last night. “We’ve been making between 15 and 20 investment per year, and expect to maintain that pace.”
The confusion stems from the fact that First Round has historically raised very small “annual” funds that can be as small as $10 million – plus annex funds of just $5 million. It was an odd system that resulted in four different audits, four different quarterly letters, etcetera.
“We decided to rationalize our back office,” Kopelman explains. The new fund is called First Round Capital II, and should last several years.
Kopelman mentioned the fund close in a blog post last month, and reiterated the firm’s goal to stay true to its name.