Canvas Ventures, an early stage venture capital firm announced Tuesday a $350 million raise, hitting the hard cap for its third fund, CV3. This raise brings the firm’s total assets under management to $825 million and provides a fresh pool of capital to lead Series A and Series B funding rounds. Notably, CV3’s capital is a modest bump from the $300 million the firm raised for CV2 in 2016, which cofounder and general partner Paul Hsiao says it’s all part of the strategy. “We have $350 million, it gives us the size that is necessary to compete but the ability to concentrate,” Hsiao told Forbes. “That’s very powerful.”
Operating as a boutique firm based in the Silicon Valley area, Canvas Ventures budgets its money and time to help guide its entrepreneurs toward a successful launch. Examples include wedding marketplace Zola and autonomous vehicle company Luminar, which went public via SPAC in December. With CV3, the firm will continue to focus on its core areas including marketplaces, digital health, fintech and logistics. It’s also launching a go to market (GTM) council composed of “proven” operators at high-growth B2B and B2C companies that founders can pull on for advice and guidance.
Hsiao says that the firm received many re-up commitments in this latest fundraise from its existing LPs but also was able to grab new commitments. Some of the new investors include California pensions like the San Mateo County Employees’ Retirement Association and the Sacramento County Employees’ Retirement System, according to pension documents. According to Hsiao, investors like the firm’s approach as well as its track record. While the notion of a more founder-first strategy is echoed widely across the venture ecosystem, he says Canvas approaches that sentiment a bit differently.
“We are in an environment where capital is everywhere,” Hsiao says. “What’s hard to come by is attention. [Founders] come to us for questions they have. They come to us with things keeping them up at night and they know we are in their corner. How can we be the extended team to help them succeed and accelerate?” To keep its tight focus, firm partners only take an average of seven board seats, which stands in stark contrast to some larger early-stage firms with partners who sit on 10-15 boards at a time.
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The firm also pulls on its past operating experiences to help like, cofounder and general partner Rebecca Lynn’s past role of helping consumer products find market fit at Procter & Gamble and helping scale fintech NextCard. Thus far, the strategy has proved out as the firm has helped its portfolio go on to raise more than $1 billion of follow-on capital. “Angel investors like to pull us into deals [and say], ‘We know that you will do the work.’ We want to focus on the go to market strategy so they are very teed up for the Series B,” Lynn says. “I’m really proud about that and committed to that vision.”