Golden Ventures closes $72 million for new seed-focused fund

Golden Ventures

Toronto-based Golden Ventures has raised $72 million for Golden Ventures III, its largest fund to date.

Investors in the fund include Foundry Group, Northleaf Capital Partners, Harbourvest, Venture Investment Associates, and Cedana Capital. Golden Ventures III follows the $40 million fund last raised by the firm in 2014.

Founded in 2011, Golden Ventures launched with a focus on mobile companies in the seed stage. The firm’s new fund will now be sector-agnostic, though it will still invest in 20 to 25 companies a year, reserving some capital for future follow-on investment. Golden told BetaKit it deliberately capped the fund at $72 million to be able to invest in additional infrastructure supporting its portfolio without feeling pressure to move away from the seed stage.

“Because mobile is a horizontal platform — every company has some mobile component — we’ve seen and invested in almost every business model.”
– Matt Golden, founder of Golden Ventures

“Because mobile is a horizontal platform — every company has some mobile component — we’ve seen and invested in almost every business model, we’ve seen and invested in many of the emerging technology trends from computer vision to AR/VR, to robotics to quantum, so we’ve already had all this exposure,” Matt Golden, founder and managing partner of Golden Ventures, said about the shift to being sector-agnostic.

“It doesn’t make a lot of sense to narrow the top of the funnel. Our superpower is understanding the seed stage, and everything you need to accomplish to get to the next layer, not our domain expertise of any particular area.”

Speaking with BetaKit, both Golden and partner Ameet Shah stressed their strong passion to remain at the seed stage in an environment where Canadian investment is moving towards later stage funding. As former founders, they said they can provide guidance to entrepreneurs through the right milestones with “founder empathy,” having been there, done that.

“It’s also part of our job to attract more people into startups who are locked away in banks or law firms or wherever else they may be,” said Shah. “It’s part of what we do, exposing them to really high potential individuals and teams and get them excited about them.”

Golden Ventures invests across Canada and the US, and said its core investment geographies include Toronto-Waterloo, the Bay Area, Los Angeles, Boston, and New York. Shah said this approach mitigates the problem of investing in a bubble, and allows the firm to learn from other geographies. At the same time, Golden indicated it’s a key connection point for US firms that want to increase investment up north as Canada garners a reputation for industries like AI and FinTech.

Golden Ventures

A snapshot of Golden Ventures’ investment portfolio.

“Toronto is a city that can compete for that talent globally, and we see Golden Ventures as the best local lead for seed stage companies,” said Lindel Eakman, managing director of the Foundry Group. “Leading up to our investment, we had seen (rather, heard) of so many exceptional Canadian engineers and developers in our US-based companies ‘south of the border’ and began to develop concerns that we were suffering a frequency illusion. So, we traveled north to Toronto-Waterloo to see for ourselves. Not only is there a significant local talent pool, the favorable Canadian immigration policies set the market up for the long-term.”

To date, Golden Ventures has made about 40 investments, including ChefHero, SkiptheDishes, and Ritual. The firm said that it looks at the strength of the market and product when investing, though the team itself is one of the most important factors as a seed stage fund.

“In ecosystems like Toronto and Waterloo, you’re even more aligned to a team for a longer period of time because to augment that team with the more seasoned professionals out there — it’s not like there are 100 people that have all done the same that you could say, ‘there’s an incredible VP of sales in our ecosystem,’” said Shah. “It’s a smaller number there. So you want to believe the team is going to grow and evolve.”

To date, the firm has made about 40 investments, including ChefHero, SkiptheDishes, and Ritual.

Golden Ventures also announced that associate Jamie Rosenblatt would be promoted to principal, with Marianne Bulger joining to lead the people and platform aspect of the business. Shah said that the firm is hiring an analyst to deepen the firm’s expertise, with a particular interest in biology or genomics, where it foresees AI having a strong impact.

As it stands, Golden Ventures features no women at the partner level, matching the representation gap found in the broader Canadian venture capital landscape. Asked if the Golden Ventures had plans to address its gender disparity, Shah and Golden said the firm functions as a flat organization, and pointed to a few of the ways its working to improve diversity in the ecosystem.

“To be very frank, a large percentage of companies we see have male founders. So there are two ways to improve that: one is to change that ratio of founders, but the other thing is to change the ratio of the mentor teams and how those companies hire from the outset,” said Shah.

A few months ago, Golden Ventures began asking companies about their diversity policy for underrepresented groups, though it doesn’t require them to develop formal policies. It has also tapped into portfolio company Wattpad, which has its own reputation for building a diverse workplace, to mentor some of its other portfolio companies in this area.

Shah and Golden said that they’re currently informally mentoring a “handful” of people from underrepresented groups who they believe can be future general partners raising their own fund, providing mentorship and keeping them in the radar of VC networks. They did not name the individuals involved to maintain their privacy, though they did say they are serial entrepreneurs.

“We want to promote those people to become the next generation of GPs, and it’s not like we’re going to go hire 20 partners, we’re a small fund and we’re mainly seed-focused,” said Golden. “What we can do is support those emerging GPs to be successful, tie them into our networks, and mentor them into being successful.”