Our $10m capital raise
The Icehouse Ventures team
The TL;DR:
- We have raised $10m from an amazing group of entrepreneurs and investors. (By contrast to fundraising for our funds, this is equity capital for our company.)
- There is a 90-day final close, so the door is open (just!) for other great people to become shareholders. Email me if you are interested.
- Below I explain why we raised the money and how we intend on using it.
- Our goal is to be great investors in great Kiwi companies, forever.
The End of the Beginning for Icehouse Ventures
We raised our first $500k fund from within The Icehouse in 2013 and established Icehouse Ventures as a company in 2019. Sir Stephen Tindall, Simplicity, and ~40 individuals joined as shareholders in a $5m equity raise. At the time we were a team of seven with $70m in FUM and a portfolio including great-but-early-stage startups like Halter, Dawn Aerospace, Crimson Education, Sharesies, Ethique, Hnry, and Mint Innovation.
We believed raising capital would enable us to invest in people, technology, and resources to help us find, invest in, and support more great Kiwi companies. (Venture capital exists to help companies grow faster and achieve more – so our raise was not a novel concept.)
The capital raise worked. We have grown to $364m FUM (including our Growth Fund II which is still open), added >1,000 fund investors (including Institutions, two Iwi, and family offices on six continents), partnered with Outset Ventures, built our tech platform, grown the team to 24, launched Brand Fund 1 with Previously Unavailable, and invested in another 145 Kiwi startups.
We have not raised this $10m because we need the money. We’ve learned from the best founders to raise when you don’t need to : ) We raised it because we want to look back in a decade and know we pulled every lever possible to invest significantly in Aotearoa’s brightest future.
This capital- and the great investors who have provided the capital- are huge enablers of our mission. I am very grateful to all of them and to the founders, angels, and fund investors who have laid the foundations for us to aim higher.
Below are a few perspectives that led to this capital raise and shape our approach moving forward.
The process is more potent than the money.
Having raised two equity rounds for IV, I sympathize with founders that it can be a tenuous process. It’s more of a sigh of relief than a celebration when the round closes.
The beautiful thing about the process, however, is that it forces you to think bigger, defend your strategy, and better articulate your vision. By doing this over and over you build greater conviction in what is possible.
Just when I thought I knew the potential future for Halter, Craig articulated why it was way bigger and brighter as part of his Bessemer-led Series B. Same story for James at Hnry, Wared at Parrot Analytics, and Brooke at Sharesies.
We have achieved way more than we thought was possible before our $5m raise – and that is despite spending less than 10% of it. We are going to work hard to make sure the same is true with this raise.
Doing well and doing good.
The perverse thing about venture capital as a business is that many activities to serve entrepreneurs well do not generate income to fund these activities – at least not on any time horizon that is bridgeable. I’ve learned first-hand over the last fifteen years that many activities that do generate income can be at odds with adding value to companies.
The great thing about venture capital as a business is you cannot do well without doing good. And if you do good for entrepreneurs, you can do very well.
Our strategy with this capital raise is simple: over-invest in initiatives, people, and resources to better serve founders. Success will enable us to invest significantly from our funds into New Zealand’s top performing companies (from pre-seed to pre-IPO). This translates into more funds under management. More FUM translates into more capital and resource to support the next generation.
“He will leave.”
I’ll never forget an Advisory Board member stating in 2015 in a matter-of-fact way that Jack McQuire would leave Icehouse Ventures. This seemed ridiculous. It presumed there was not a bright future for Jack at IV. If that was true, then how would we ever attract or retain the pedigree of team members needed for IV to be transformative investors in transformative Kiwi companies?
Great people build great businesses. Great people have great options. This is especially true in venture capital. A part of Dawn Aerospace’s success is its superior propulsion systems (built by great people, of course.) Mint Innovation sells gold extracted from e-waste. Venture firms predominately have people.
This capital raise helps us build a brighter future for the team. All going well, this will give us time to develop more great people who can create a greater impact on Kiwi startups.
“In fundraising you are never changing minds, you are simply surfacing the believers”.
Credit to Niki Scevak (Blackbird) for my favourite quote.
This was certainly our experience with this capital raise. A key objective of every entrepreneur's capital raise is to attract investors who bring more than just money. What “more” did we seek? Individuals who have experiences and relationships that could help startups execute better and more quickly.
To that end, I am super grateful that many entrepreneurs have become shareholders in Icehouse Ventures. A huge thanks to Brooke Roberts (Sharesies), Philip Fierlinger (Upstock), Sean Molloy (Ternary Kinetics), Milot Zeqiri and Brittany Gribben (ArchiPro), Mike Carden (Joyous), Scott McPhee (Torque Bio), Anne Fulton (Fuel50), Jamie Beaton (Crimson Education), Guy Horrocks (Carnival & Solve), Will Barker (Mint Innovation), Derek Handley (Aera), Shaun Quincey (Simfuni), Andrew McPhee (Seene), Tim Norton (90 Seconds) and several others who preferred to remain anonymous.
Kiwis backing Kiwis
The bright future I see for New Zealand is that a much larger proportion of the capital that companies require is provided by Kiwis.
One way we are working towards this future is with our Growth Fund II. This is our flagship, active Series A-D Fund that will invest in 20 companies over the next three to four years. These companies are typically five to seven years old, generating millions in revenue, employ teams of >50, and have significantly more growth ahead of them.
This fund builds upon Growth Fund I which invested significantly in Hnry, Tracksuit, Halter, Mint Innovation, Dawn Aerospace, Sharesies, Crimson Education, and many other greats.
We have attracted ~$75m to date including Generate Kiwisaver, Sir Stephen Tindall, Hobson Wealth, and >300 family offices and individuals. We are on track to get to $100m and would value your support achieving this target.
Learn more and join this journey here.
Thanks
Robbie
