Foundry Group, an 18-year-old enterprise agency with almost $3.5 billion in belongings beneath administration, has quietly determined to close down and never increase any extra funds. The transfer was surprising contemplating that the agency introduced a $500 million fund final yr.
Boulder, Colorado-based Foundry first introduced that its present fund could be its final on January 19. The enterprise agency had been investing since 2007, in keeping with Crunchbase, and had introduced the $500 million fund, Foundry 2022 — its eighth — in Could of 2023.
Over time, Foundry has invested in additional than 200 corporations and almost 50 enterprise companies, in keeping with co-founder and associate Seth Levine. It had backed the likes of Fitbit, Zynga and AvidXchange, amongst others.
When TechCrunch reached out to Levine, he declined to touch upon the agency’s determination to shutter, and as a substitute pointed to blogs he’d written. He did, nevertheless, affirm an unspecified variety of departures on the agency, though he didn’t make clear in the event that they have been layoffs or voluntary.
In a single weblog, he acknowledged that the agency’s determination to fully shut down was an uncommon one.
He wrote: “Whereas VC companies not often make selections like this, it’s exactly what we deliberate to do once we began Foundry in 2006. From our founding, we deliberately determined to not construct a legacy or generational agency — one meant to reside past the tenure of the founding companions. As an alternative, we supposed to concentrate on the work of investing, re-evaluating every potential new fund as our fundraising cadence required…We’ve had a number of moments during the last decade the place we thought the fund we have been elevating may be our final. Every of these occasions, after reflection and dialogue, we determined to lift one other fund. However not this time. Foundry 2022 will probably be our final fund.”
What’s subsequent
Foundry nonetheless has 33% to 40% not noted of that fund to take a position, Levine advised the Denver Enterprise Journal. In his weblog, Levine mentioned particularly the agency plans to “proceed to guide Collection A and B financings” out of the fund.
The transfer raises questions for its portfolio corporations. Foundry says it can proceed to take a position out of its latest fund, however for founders, accepting capital from a agency that’s winding down is a danger and will make securing follow-on funding that a lot more durable.
In the meantime, Levine maintained to the Denver Enterprise Journal that he expects all of the funds to be deployed by round 2026 and that the agency will then “nonetheless work with companies wherein it has investments.”
In his private weblog, Levine wrote: “We raised our final Foundry fund at a fortuitous time, simply because the markets cooled off (it’s a good time to be investing), and we’ve one other two years or so of latest investments to sit up for. To not point out a decade or longer of labor with the portfolio after that.”
The investor additionally advised the Denver Enterprise Journal that he would “be with Foundry till its work is totally completed,” including that co-founder Brad Feld and associate Chris Moody “plan to do the identical.” He couldn’t say what the opposite companions would “rise up to within the subsequent few years.”
In her personal weblog submit Foundry associate Jaclyn Hester wrote that she was “focused on supporting our portfolio and main new early-stage rounds as we deploy the rest of the 2022 fund over the following few years.”
Foundry just isn’t the one enterprise agency to lately unexpectedly shut down. In December, Boston-based OpenView abruptly introduced it will cease investing in new corporations lower than a yr after elevating $570 million for its seventh fund.
