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This fund, if fully raised, would be less than the firm’s two previous funds: Precursor I and II are $15.2 million and $31 million, respectively. The first two funds focus on seed stage startups ranging in focus from SaaS, e-commerce, and marketplace.

According to Crunchbase data, Precursor has invested in at least 176 known startups to date, including companies we have covered such as Finix, Anyroad, and Squad.

Precursor’s Hudson was unable to comment regarding the new fund. Last time we chatted with him, however, was for our quarterly report on venture capital dollars raised by female founded companies. Hudson, one of the few African American venture capitalists in the Bay, explained that his firm invests in minority and underserved entrepreneurs without branding or strategy.

His only strategy, he said back in July, was to invest in more women is having a diverse team. Two people in his three-person funding team are black women.

What Is An Opportunity Fund?

In venture capital, fund naming matters, and those names point to what the strategy of the fund might be. Precursor’s first investments in companies primarily happen at seed and Series A stage.

It’s common for venture capitalists to secure pro rata rights with their portfolio companies. For example, if a hypothetical investor acquires 10 percent of a company’s stock in its Series A round, and gets pro rata rights, that investor has the right (but not the obligation) to invest additional capital in the company’s Series B round, such that their 10 percent stake is maintained. (Crunchbase News went over the math behind pro rata rights in a handy guide.)

However, many investors have covenants in their limited partner agreements which bar them from committing more than a certain percentage of the fund to any single portfolio company, as a risk management strategy. For particularly fast-growing portfolio companies, investors may quickly exhaust the capital they’ve internally allocated for follow-on funding in a particular portfolio company.

Some investors may opt to raise additional follow-on capital through so-called special purpose vehicles (SPVs) which, as the name might suggest, are structured similar to VC funds, except instead of investing across a broad portfolio, all the capital raised in an SPV (less legal fees and closing costs) is invested in one particular company, and often just one particular round of funding.

Though Precursor Ventures may have a unique strategy for Opportunity Fund I, the general pattern for seed and Series A firms is to raise a more generalized pool of follow-on capital which can be spread across multiple successful portfolio companies from the firm’s flagship funds. These capital pools may be called “opportunity funds,” but “growth funds,” “select funds” and other monikers are also used. Regardless of name, more follow-on allocation gives early-stage firms additional runway to exercise their pro rata rights, and to buy these firms a seat at the negotiating table in future funding rounds.

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, the founding partner of the fund, told Crunchbase News that it took two weeks for her to raise the entire fund, thanks to her personal network.

Placing Bets

Kimmel’s first exposure to SaaS came when she was head of social media at Expedia starting in .

“I started out by building internal tools, and saw large inefficiencies inside of large companies,” she said. From there she went to , founded , a biannual workshop for techies, and is now jumping into this first time role as an institutional investor.

About 40 percent of the new fund’s deals will come from , according to Work Life Ventures’ pitch deck. It plans to deploy the capital over 30 investments in 24 months. While she said the fund will also do Series A rounds from time to time, the check size will be around $150,000.

“People will pay out of pocket for [an email optimization startup], so I feel like there was definitely an opportunity to reimagine how is the workplace changing how software is used,” she said. Kimmel pointed out that while the last “tech cycle” may have been about , a newsletter startup for ecommerce businesses, now we’re in the world of , another newsletter startup which lets the average consumer charge readers for subscriptions. Substack recently raised $15.3 million in a financing round for its digital marketplace, in a round led by a16z.

Beyond work tools and collaboration services, Kimmel said she is interested in startups that use software to find “new ways for everyday people to make money.” Companies are no longer just creating a software layer. They’re adding a monetization layer on top of it. And that’s a focus of Kimmel’s new fund.

She pointed to , a startup she invested in that allows anyone to rent out their parking space, as an example.

Deal Flow

Her deep ties to the SaaS community has already let her into some high profile deals. For example, is an investor in , a hyped YC-backed startup that raised a $7.5 million Seed round, which we reported on previously.

“My conversation with Tandem went deep very quickly because I had previously looked at competitors in a similar space, and knew other products in the space operating in stealth,” Kimmel said on the phone.

Additional investments from the fund include another Y Combinator startup, , which focuses on candidate sourcing, and , which lets users “jump to anything in the cloud without digging through tabs or searching multiple systems,” according to its website.

Kimmel’s jumping into a market that has a high saturation of startups all claiming optimization. Her untraditional transition from operator to venture capitalists may or may not be what it takes to differentiate her from the equally high saturation of venture capitalists looking to bet big on the “next Superhuman.”

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