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Karlin typically invests around $750,000 in 8 to 10 seed or early Series A startups each year
There has been a big debate over the last few years over whether the Series A crunch is real or not.
What everyone can agree on, though, is that there are definitely more seed and early stage funds now than ever before, and more people willing to give more and more money to young companies looking to make it big.
But just who are these funds and venture capitalists that run then? What kind of investments do they like making, and how do they seem themselves in the VC landscape?
In the coming weeks, we will be highlighting members of the community to find out.
Tianxiang "TX" Zhuo is the Managing Partner of Karlin Ventures and has been involved in the startup space since his college days. TX will also be speaking at our upcoming Vator Splash Oakland event on April 22-23.
He started an online textbook retail company while in college, served as the CFO for an electric vehicle startup, Lit Motors, and worked for Innovation Endeavors, a seed stage venture fund backed by Eric Schmidt. Prior to Innovation Endeavors, TX worked for McKinsey & Co in their London office where he was part of their financial institutions and consumer goods practices.
VatorNews: What do you like to invest in? What are your categories of interest?
TX Zhuo: Transactional marketplaces, enterprise software, commerce enablers. Anything from inventory management to gift card platforms.
VN; What would you say are the top five investments you have been a part of? What stood out about those investments in particular?
TZ: We love businesses that allow consumers to tap into utilized resources.
- Laurel & Wolf allows everyone to access great designers at a very affordable price point and these designers get to work on things they love and make money in their spare time.
- HONK provides a much better user experience and allows consumers to interface directly with roadside assistance companies instead of having to wait for hours for AAA.
On a related note, we believe that sole proprietors should be able to control their own destiny instead of being beholden to platforms. Victorious is a great platform that allows video content creators to monetize, activate and engage their community on their own personal platform.
We are also a big proponent of enterprise mobility.
- Bitium provides employees with a single sign on for all their enterprise applications facilitating the move towards a mobile workforce.
- Cirrosecure helps large corporations monitor that use of shared files / documents providing the security layer that enables the move to a mobile workforce.
VN: What do you look for in company's that you put money in? What are the most important qualities?
TZ: Team is the most important factor. Specifically, we look for founders with the right industry connections / experience, magnetic personality to attract others to buy into their vision and intrinsic capabilities, e.g. having the hustle, ability to envision the future and execute on a big vision.
We tend to look for businesses with a clear business / revenue model from Day 1.
VN: What is the size of your current fund?
TZ: We are not disclosing that right now.
VN: What is the investment range? How much do you put into each startup?
TZ: Between $250,000 and $2 million, but the sweet spot is around $750,000.
VN: Is there a typical percent that you want of a round? For instance, do you need to get 20% or 30% of a round?
TZ: We ask for 10%.
VN: Where is Karlin Ventures currently in the investing cycle of its current fund?
TZ: Very early, still have a lot of fresh capital to deploy.
VN: What percentage of your fund is set aside for follow-on capital? What is the size of the fund?
TZ: We set aside 50% for follow-on capital.
VN: What series do you typically invest in? Are they typically Seed or Post Seed or Series A?
TZ: Seed or Early Series A
VN: In a typical year how many startups do you invest in?
TZ: Between 8 and 10 startups.
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Karlin Ventures is an early-stage venture capital fund based in Los Angeles. They are value-add partners helping entrepreneurs who take contrarian approaches to create impactful solutions to big, interesting problems. Karlin Ventures is an affiliate of Karlin Asset Management, a private investment firm managing over $1.4 billion of unleveraged equity capital.