Footwork at Year 2
A look back on our firm's first two years on the second anniversary of closing Fund I.
Welcome to issue #45 of next big thing.
Two years ago, we announced Footwork, a new early-stage focused venture capital firm, with our debut $175 million fund. Last year, we published Footwork at Year 1, and thought we could make this an annual tradition.
Footwork By The Numbers
Footwork’s investment team is simply two equal general partners. We only invest at the early-stage. We only lead or co-lead rounds. We try to be close thought partners to the founders we invest in, and that approach necessitates only making a handful of new investments every year.
Consistent with this discipline and focus, we made four new investments this past year, to build on six investments in year 1, and thus our portfolio now stands at 10 companies. These include:
Table22: platform enabling restaurants to offer memberships to their patrons
Via: SaaS for mobile eCommerce
Cradlewise: smart crib that helps babies and their parents get better sleep
Trendsi: B2B dropshipping marketplace enabling online merchants to grow
Heard: back office (vertical SaaS + fintech) for therapists to run their businesses
Felt: collaborative mapping software platform
Power: consumer marketplace for patients to access clinical trials
and three more companies in which our investment has yet to be announced
Here are a few stats on these investments:
An even split between Seed and Series A (5 Seeds, 5 Series As)
Footwork check sizes in the $2 to $9 million range, with an average initial investment of $5 million
We serve on the board of directors, as a director or observer, at all ten companies
These businesses are 30% B2C, 40% B2B, and 30% B2B2C
One of the core pillars of our firm is that we believe diversity across every dimension is a competitive advantage. Here’s where the diversity in our portfolio stands today:
70% of founding teams have at least one woman or minority founder
60% of companies are led by a minority CEO
30% of the CEOs in our portfolio are women
The Story Beyond The Numbers
The statistics above are important, but of course they don’t tell the real story of what the past two years have been like.
This has been a strange two year period for tech startups and venture firms. 2021 saw more money than ever before invested in companies, at higher and higher valuations. So many companies also went public, delivering massive liquidity to the industry. 2022 saw a gradual cooling that has continued into 2023. The focus for entrepreneurs has gone from raising capital to building real businesses, from growth to efficiency and profitability, from exit planning to survival.
We spent a lot of time this past year working with our portfolio companies on their plans, thinking through the right milestones to achieve as the environment adjusted, helping several companies raise new rounds of capital, take advantage of a better talent market to up-level their teams, and in general determining how each company can be more efficient while continuing to grow at a healthy clip. This all amounted to a lot of real talk and a lot of real work. 2021 perhaps deluded a lot of folks that early-stage company building and venture capital investing is easy. It’s not. It’s hard, and always has been.
In spite of this, we’ve honestly never been more excited than we are right now about making new investments. We’ve made two investments already in 2023, and will soon close on a third. One of these is specifically-focused on AI, capitalizing on the excitement of a potential new technology platform given advancements in generative AI over the past year.
And while many of our portfolio companies are thinking through how AI may adjust their product or business, AI-enabled products are not the only thing we’re excited about. We continue to see a large and growing opportunity in climate tech. New learning and education models needed in a post-pandemic and re-skilling world. An aging population that is increasingly tech-native and in dire need of better solutions. The chance to build new consumer social and commerce platforms, given the stagnancy of incumbents.
Entrepreneurs building in these areas aren’t slowing down because of higher interest rates or inflation or lower multiples in the public markets. The bar to take a risk to start a company and raise capital has perhaps increased, but that only means the ones that do it need to be a bit more driven, a bit more hungry, and a bit more passionate about what they’re building. At Footwork, the entrepreneurial energy we see every day in founders we meet with inspires us. It’s the fuel that gets us out of bed to get to work. To find our own footwork and to help founders find theirs.
Here’s to Year 3 and the journey to come.
The Footwork portfolio is hiring. Data analysts, lead developers, engineering managers, sales reps, finance leads, and more. If any of the above piques your interest, leave a comment, respond to this email, or reach out directly.
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Great update. I feel connected!
nice update! Liked the clarity of thought and simplicity in storytelling