Chemistry founders Mark Goldberg, Kristina Shen and Ethan Kurzweil were “anxious” to begin with. “We think the market is right for it,” Kurzweil said.
Jamie Viggiano for Kimi
Mark Goldberg, Ethan Kurzweil and Kristina Shen left top jobs at blue chip VC firms to launch Chemistry, a new equity partnership focused on supporting Series A startups.
After leaving his job as a partner at venture capital firm Index Ventures in a surprise move last December, Mark Goldberg went on vacation with his family, promising his wife that no work calls would interrupt their time with the two of them. their young children. Then, like clockwork, Ethan Kurzweil dropped. “This is an exception, a friend is calling!” Goldberg, 39, insisted. He took
But Kurzweil, a partner at another established firm, Bessemer Venture Partners, wanted to talk shop — specifically, a seed Goldberg had planted weeks earlier that maybe they should team up. “I can’t stop thinking about it,” Kurzweil, 45, told her. “This idea is like sand between my toes.”
Their next call was to Kristina Shen, a former colleague of Kurzweil’s and a partner at a16z. Shen, 37, first heard about Goldberg’s plans in the days before she went to the hospital to give birth to her third child; now, she was at the top of Goldberg and Kurzweil’s lists for a third co-founder. “It’s a little crazy, but this is the time,” Goldberg said. “Let’s play offense with a focused fund.”
Over the next two months, the trio graduated from weekly catch-ups to a daily WhatsApp channel, mock investment discussions and, after what the partners estimated was 200 hours of test collaboration, a multi-day field trip to Stinson Beach, north of San. Francisco, where they were fully engaged. Axios first reported on their plans for a new firm in April.
“It’s extremely rare that people come together who are at the right stage in their career to do that,” Shen said. “It felt clear.”
The result is Chemistry, a new venture capital firm that has raised $350 million in a debut fund. An equal partnership between Goldberg, Kurzweil and Shen, Chemistry will focus on early-stage investments, particularly Series A, in primarily business-to-business startups in areas such as fintech, workflow software, and developer tools and infrastructure. Kimi will seek to make focused, hands-on bets with the fund, with each partner backing around two or three companies in each of the next three years.
Chemistry Field: provide founders with the experience and track record they would expect from a bluechip VC firm, with the added attention that can be hard to get consistently from a larger fund. All three investors can tap into that big-firm experience, they said, without the red tape of a more complex, multi-stage firm with dozens of active investments (which Goldberg described as “back-parachuting”). “Founders say, ‘Oh, wait, you can actually make this entry and you don’t have to analyze it by asking 10 people internally first,'” Shen said.
Chemistry Partners brings a long track record of success in startups to the new fund. While at Bessemer, Kurzweil, son of famed futurist Ray Kurzweil, invested in unicorns LaunchDarkly and Intercom, as well as the now-public PagerDuty ($1.7 billion market cap) and Twitch, acquired by Amazon for just under $1 billion . At Index, Goldberg invested in unicorns Persona, Pilot and Plaid, as well as Bridge, the crypto startup that Forbes first reporting was recently acquired by Stripe for more than $1 billion. Shen, a 2016 student Forbes 30 Under 30 list for venture capital, sourced ServiceTitan, the nearly $10 billion service management provider, while in Bessemer. Later, joining a16z, she was an early investor in unicorn Pave, startups Tennr and Wrapbook, as well as Decagon, a startup providing AI agents for customer service that recently raised $65 million.
Northwestern University has signed on as a limited partner, as have the Howard Hughes Medical Institute and TrueBridge Capital Partners. Chief investment officer Amy Falls said it was rare to see a first-time fund with the combined track record of the Chemistry trio. “We were particularly impressed with the very thoughtful approach of having three different people with different DNA, coming from different styles of funds, who could work together,” she said. “That felt very powerful.”
Clearly, if the aspirational comparison for Kimi were Benchmark, the well-known firm that has managed an equal partnership in a rotating group of investors over the past three decades, most recently raising a $425 million fund in June. Other relatively smaller partnerships, including Midas List investor Fred Wilson’s USV in New York and Bay Area fund Amplify, also served as inspiration, the partners said.
The founders who worked with each investor praised Goldberg for his relationship skills and high-quality presentations, Kurzweil for his stabilizing presence and market knowledge, and Shen for her always-responsive hustle. “She was the closest thing I had to a co-founder for a year and a half, talking almost every day,” said Matt Schulman, CEO of compensation manager Pave, who counted Shen and Goldberg, who later invested, as board members. . “Of course I was sad when I heard the news that they were leaving us. But when I found out they were working together, I thought, ‘hell yeah, this is amazing’.”
The challenge for Kimia, Falls and industry peers will be for the firm to prove that its partners can work well together over the long term while winning deals head-to-head against the greater firepower of established firms. like the ones they left. Many emerging or first-time fund managers start small, partnering with larger players before moving on to competitive lead controls. But Chemistry has the size to go head to head from the start.
Esteban Castaño, co-founder and CEO of blockchain intelligence firm TRM Labs, said he received investment from Bessemer specifically because of Kurzweil and his experience. “If you’re in Silicon Valley for more than a year, you’ll soon see dozens of startups that have been backed by the coolest brands and still die,” Castaño said. But he agreed that for especially early-stage or less experienced founders, top-tier VC firms have brand clout. “It’s extremely tempting because you desperately want an easy button. The unfortunate reality is that there is not,” he added.
Chemistry’s partners acknowledged that it can be more difficult to immediately impress founders who are unfamiliar with their reputation. “Our awareness as a fund is virtually zero today, and we’re used to having calling cards that people recognize,” Goldberg said. Chemistry will look to build on that reputation by investing first in startups “where we have a good chance to win,” Kurzweil added, before branching out.
The new firm hopes to add two or three partners over time, but the trio said they will have to balance that growth with the risk of being mired in competition with multi-stage, multibillion-dollar funds. That means not growing the size of the funds too much, Chemistry’s partners said, and drawing a line to invest in subsequent deals.
“You have to play the game in front of you, but we believe that by being focused, we can play that game better,” Shen said.
As for whether the Chemistry partners could work together, that’s what all those hours of debate were about, they said. Then, there’s a leap of faith. “It takes a lot of guts to leave a top-tier fund in the first place,” said CEO Michelle Valentine, a former colleague of Goldberg’s who he later backed through her tax compliance startup, Anrok. “They’re basically starting the process, and that’s a risk,” Northwestern’s Falls added. “It just means we’ll know sooner whether they can make the leap or not.”