London VC Kindred Capital has closed its second seed fund at £81 million and announced that, through its ‘Equitable Venture’ program, about £5 million is going back to the entrepreneurs rather than Kindred’s general partners. The firm gives seed-stage founders co-ownership in the fund that invested in their businesses.
The second fund has been active for a year already, with seed investments going to ten new portfolio companies, including BotsAndUs, Gravity Sketch and Beit. Since its launch in 2015, the firm has invested in a total of 39 startups across Europe and Israel.
The equitable investing scheme is working, the firm says. The idea is that this encourages a collective model, in which founders actively help each other achieve their goals, and has actually had a positive impact on deal flow, with entrepreneurs sourcing 38 percent of Kindred’s dealflow at the top of the funnel. LPs of the second fund include the University of Chicago, Industry Ventures, Generation Ventures, Sands Capital, British Patient Capital, Isomer, and Legal & General. As well as institutions, Fund II has attracted founders such as Taavet Hinrikus (TransferWise), Carsten Thoma (Hybris), and Rishi Khosla (Oak North).