One day, our investors did something unusual. Let me explain.
Our first fund was $50 million and closed in 2007. A year later, we were thinking of raising more money. One of our investors quickly offered a big check. Other existing investors did the same, and so, our fund was slated to grow to $100 million (we decided to add to the existing fund rather than start a new one–our first fund was only a year old).
We targeted the closing for the fall of 2008. In September, suddenly, the stock market collapsed.
Lehman failed, bankruptcies started and untold layoffs started. Large investors wanted liquidity and fled from any commitments that locked up their capital, such as with hedge funds and venture capital. The very existence of the free market was being questioned.
Yet, our doubling to $100 million happened as planned. Our major investors did what they said they would do. In the middle of an imploding market in October of 2008, they signed the legal agreement which doubled our fund. Our investors did something crazy, and that deeply motivates us each day, frankly.
My partner, Eric, has said dozens of times: “I really want us to do well for our own sakes, but even more, for our investors, to repay their trust.” I cannot agree more.
Why write about this? We want to thank our investors. As we approach our fifth anniversary as a firm, we are so deeply grateful to you. It is a deep desire of ours to make you proud and to deliver superior performance. Happy Anniversary!