Freestyle Capital has raised its fourth fund to invest in early-stage startups. This time around the firm is increasing the fund size to $90 million and promoting Jenny Lefcourt to general partner.
Freestyle was founded by Josh Felser and Dave Samuel, serial entrepreneurs who had previously built and sold a couple of companies together. After a short period of angel investing, the two raised their first fund of $26 million in 2011 and have added a new fund roughly every two years ever since.
In 2013 the fund grew to $40 million, and they increased it again with their $60 million Fund III in 2015. For Fund IV, Freestyle upped the ante and raised $90 million, in part so that it could put Lefcourt on an equal footing with the founding partners.
“Like most funds, we have continued to raise more as we become better at what we do, but this was the first time where we were oversubscribed,” Felser told me. “We want to take bigger risks and invest more capital, but adding Jenny was a huge impetus for raising more capital.”
Hiring a new general partner is never an easy decision to make, especially when you’re talking about adding an equal third to a couple of guys who have been working together for the past two decades.
“We actually thought we might never add somebody else, since we know each other so well,” Felser said. “[But] when you believe the people you bring in are going to increase the pie… then it was easy for us to decide to do it.”
Like Felser and Samuel, Lefcourt is a serial entrepreneur, having founded WeddingChannel.com and Bella Pictures. She first met the Freestyle guys when she was pitching them on investment in one of her startups and learned about their reputation
“We pitched Freestyle in part to be a part of that founder ecosystem,” Lefcourt told me. “We kept hearing from people, ‘If they’ll invest, you should take their money.’”
Lefcourt joined the Freestyle team toward the end of Fund II, and became a partner with the close of Fund III. But with the new fund, she will share equally in the decision-making and the economics with the other general partners.
“We started at one place and ended at another. I joined part-time and I remember Dave not being comfortable with me having the title partner at first,” Lefcourt told me. That all changed with Fund III, she said. “Dave said, ‘We want you to be a partner,’ and I knew it was a big commitment to me.”
With the promotion of Lefcourt as general partner, the firm hopes to invest in more women and underrepresented founders, although she is quick to point out that since joining Freestyle Felser has backed more female founders than she has. “To some founders, diversity in the partnership is important,” Lefcourt said.
Other than that, not much has changed. With the new fund, Freestyle will continue to focus on backing seed-stage startups and writing first checks of $1 million to $1.5 million. Notable investments from the first three funds include Intercom, Patreon, Narvar, Digit, Wag, Betterup and Airtable.