A Strong Focus on Seed Stage Investments and NYC-based Startups
Lerer Hippeau has made significant strides in its investment strategy with the announcement of two new funds: $122 million for a sixth fund focused on seed stage investments, and $60 million for a ‘Select Fund’ devoted to later-stage deals. Managing Partner Eric Hippeau highlighted the firm’s continued commitment to seed-first investments and New York-based startups.
Continuing the Existing Strategy
"We continue to be seed-first investors and New York-first investors," said Eric Hippeau, underscoring the firm’s dedication to nurturing early-stage companies in the NYC ecosystem. This approach is rooted in their confidence in New York’s potential for growth and innovation. "We’re big believers in New York," Hippeau emphasized.
Success Stories from Recent Years
While there may be a wait for the kind of massive exit that propels founders to wealth and beyond, Hippeau pointed to recent success stories such as Oracle’s acquisition of Moat (a company Lerer Hippeau invested in) and Roche’s acquisition of Flatiron Health. These deals demonstrate the potential for significant value creation within New York’s startup scene.
A Huge Pipeline in NYC
"There’s a huge pipeline in New York of companies that have been valued in the hundreds of millions and in some cases billions of dollars," Hippeau noted, stressing that many of these are Lerer Hippeau portfolio companies. This wealth of opportunities is where the strength of New York lies in the short term, with numerous startups poised to emerge and create value.
Follow-on Funds and Select Investments
The first follow-on fund was announced last year, which raised $28 million. This new allocation of funds will be used for follow-on investments in companies Lerer Hippeau has already backed at the seed stage, like Allbirds and Casper. The firm may also use it to make Series A investments in startups they didn’t initially back but now see as potential missed opportunities.
Growing the Team
Lerer Hippeau continues to expand its team with the recent hiring of Caitlin Strandberg (formerly vice president at FirstMark) as principal, Isabelle Phelps as associate, and Amanda Mulay as senior talent manager. "I couldn’t be more excited to join the most active early-stage firm in New York," Strandberg said in an email statement.
"We have around 20 people on the team now," Hippeau noted, highlighting that while larger firms like Andreessen Horowitz boast extensive support staffs, Lerer Hippeau prefers a more selective approach. "We don’t really want to have dozens of people doing this," he said. "We want to be very precise and very selective about how we can help."
Help with Recruiting
The team’s growth includes the addition of Mulay to support startups in their hiring processes. Hippeau emphasized that leveraging expertise is key, acknowledging that not all companies require the full breadth of resources a larger firm might offer.
A Firm Commitment to NYC-based Startups
Through these new funds and expanded team, Lerer Hippeau underscores its commitment to fostering growth within New York’s startup ecosystem. By focusing on seed stage investments and nurturing emerging talent, the firm aims to contribute significantly to the city’s thriving tech landscape.
Conclusion
Lerer Hippeau’s announcement of two new funds serves as a testament to their dedication to supporting early-stage companies in New York. With a strong focus on seed investments and an expanding team, they are well-positioned to capitalize on the opportunities presented by NYC’s vibrant startup scene.