SuperAngel.Fund x Q1 2023 Recap 🔥
I am pleased to share the Q1 2023 recap for SuperAngel.Fund.
During the quarter we made 9 investments (6 follow-ons), with a median check size of $75k and post-money valuation of $10m. Our investments were spread across Consumer (4), eCommerce SaaS (4), and Future of Work (1).
Since the fund started in January 2021, we have deployed $6.9 million across 119 investments into 91 companies. I estimate the current value to be $8.5 million, representing a 20% unrealized IRR and 1.24x gross multiple. So far, 36 have seen a markup valuation, 79 are active without yet a change in price, and 4 are no longer active. You can view a detailed performance summary here.
candidate.fyi: The missing candidate experience layer
Hurry: Commerce AI helping retailers compete with Amazon
Create: The first modern creatine brand
Superfiliate: Transforming affiliate links into co-branded storefronts
Frank: B2B subscription billing & collections platform
Showroom: AI driven search engine for fashion
Character: The most helpful home improvement brand
Arber: Modern lawn, garden and plant care brand
Stealth / Confidential: Secondary share purchase
Silicon Valley Bank Update
On March 10th I sent a letter to all SuperAngel LPs regarding the SVB banking crisis. I am thankful this situation has been resolved and you can view a copy of the letter I wrote here. On March 14th, AngelList’s CEO also sent a formal update to managers regarding their new banking process for funds, GPs and LPs, which they are calling Networked Banking. You can see a copy of that letter here.
During the quarter we featured several founders in our ‘Founder Friday’ series. I did a 60-minute podcast interview, and wrote a detailed blog post on my career journey over the past 13 years titled “How I got here.” Finally, on April 1st (AKA April Fool’s Day), I shared a video promo featuring four special Founder Testimonials.
The State of the Market
Last week AngelList released their quarterly report titled “The State of U.S. Early-Stage Venture: 1Q23”. Looking back at the Q4 & 2022 Year-End Update that I wrote in January, I feel that the same message and conditions are applicable today:
We are likely to see further downward pressure on valuations, particularly for first time or otherwise overlooked founders, within our sectors of focus. Our own data over the past two quarters has also shown new deals priced more reasonably, both for follow-on investments in our top performers, and for new companies as well. While there are historic amounts of venture capital dollars on the sidelines, much of it waiting for the market to feel more “stable”, we continue to invest, seeking founders and opportunities that go against the herd. As Warren Buffett famously said: “Be fearful when others are greedy, and be greedy when others are fearful.”
Per a Wall Street Journal article from November 2, 2022: “Venture has outperformed other asset classes in prior down cycles. About 75% of venture-capital funds raised from 2007 to 2016 beat the Russell 2000 during that time, and roughly 60% beat the S&P 500, according to a 2021 research paper published in the Harvard Business Review. According to research from the University of Miami, venture-capital returns during the dot-com crash and the 2007-09 recession averaged a 16% gain, while the S&P 500 lost 12% and the Nasdaq declined 18%.”
Aside from more attractive entry points, a larger number of higher quality deals are coming our way because of the reputation, credibility and network we have established as a leading fund at the pre-seed/seed stage. We are also benefiting from deals moving a bit slower, providing more time to diligence and build a deeper relationship with founding teams. The companies we are investing in today are being shaped during more disciplined times, creating a higher degree of resilience more commonly held by the most successful, enduring companies.
There are exceptional entrepreneurs everywhere building exceptional companies, and we spend most of our time trying to find them, and buy a ticket on their rocket ship. I maintain deep conviction in our fund’s strategy, and believe the market turbulence will continue to work in our favor as we sit on a healthy cash position, ready to take advantage of opportunities. To rearticulate our approach:
Invest as close to the first check as possible
Focus on the categories we know best
Leverage our massive network on behalf of portfolio companies
Provide operational, sales & team support to deliver unfair competitive advantage
Champion our companies religiously to drive incremental exposure, customers, and business opportunities
Position ourselves as each founder's favorite and most helpful investor
Many of these attributes result in higher quality and larger quantities of deal flow, one of the most pivotal aspects of any type of investment firm. We also believe that the earlier the stage that one invests (and we invest very early), the more diversification is needed to weather the zeros and optimize the chances of hitting home runs. As you know, it is a tremendous amount of work to source, diligence, and assess these businesses. This is work I love, and what I feel is needed to deliver above market returns over an extended period of time.
As always, the fund has a strong pipeline for new investments and will continue to monitor follow-on or secondary opportunities into existing portfolio companies that show breakout success/growth metrics. If you come across impressive founders looking to raise capital within our areas of focus, I appreciate you sharing those opportunities with me.
Thank you for your ongoing support and confidence and I look forward to updating you again after Q2.
If you are interested in participating with SuperAngel there are two options:
Join SuperAngelSyndicate.com. Once accepted, syndicate members are invited to review deal memos whenever I have a new investment to share, and can choose to invest or pass based on their own discretion. Minimums generally start at $2,500 and priority allocations are given to SuperAngel.Fund LPs on a first-come, first-served basis. Click here to request an invitation to the syndicate.
Join SuperAngel.Fund. Unlike the syndicate, the fund is my primary investment vehicle and provides diversified exposure to every company SuperAngel invests in, one of the most important attributes of a successful early stage portfolio. LPs also receive priority access to co-investments. Click here to request more information on the fund.
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You’re receiving this email because you are either a friend, co-investor, associate, or connection of mine who at one point expressed interest in receiving updates and other correspondence from me.
SuperAngel.Fund is an early stage fund led by Ben Zises that invests in Consumer (CPG, eCommerce SaaS), PropTech, & Future of Work. You can learn more at SuperAngel.Fund.