Emerging fund managers we’ve had a rough time these past few years and there’s no telling when it’s going to get better.
However, some managed to prepare the market winter. One of them was Gale Wilkinson, managing partner at early-stage fund Vitalize. Her firm just closed a $23.4 million Fund II after two years of fundraising. He called the experience “enlightening.”
It plans to use that money to invest in at least 30 companies and has already cut checks on 50 from previous fund groups. Her company, founded in 2018, focuses on the technology of the future of work. He typically writes seed checks between $250,000 and $750,000 and has an angel network that has raised just over a million dollars in 14 offerings.
Wilkinson doesn’t plan to raise a third capital any time soon, but she has some advice for those who do, given the looming uncertainty in the venture market. He spoke to TechCrunch+ about why he no longer wants to work with institutional investors, what to do when an LP says no, and why he’s no longer aiming to raise $100 million in capital.
Image Credits: Gail Wilkinson
TC: This has not been the easiest year to raise capital for many companies or founders. What were some of the big lessons you learned trying to reach out to limited partners this year?
GW: I made one key mistake, which was to listen to everyone else when developing the strategy for Fund 2. They said to raise more, seek institutional capital, grow faster, write bigger checks, do fewer deals, get more ownership per deal, and build a bigger team to build the foundation for further expansion in the future. Initially, I listened and went out to raise $50 million with the expectation that someday I would reach the $100 million fund size, which I think is the largest seed stage capital a VC should raise.
After 300 conversations with institutional LPs, I had a moment where I realized I didn’t want to primarily work with institutions in the future. For over a decade, I’ve worked with individual investors and it’s part of what I love most about this job. Individual investors are very different from institutional investors in all the right ways, in my opinion. Individuals are willing to make their own decisions rather than just follow the pack. they are good at looking ahead and move quickly.
