The Final Foundry Fund

This morning, we made it public that Foundry 2022 will be our last fund. You can read our post about it here. I would also highlight Seth’s and Jaclyn’s posts.

Foundry has always operated with the idea that it wouldn’t outlive its founding partners. I can recall my partners talking about “three funds and done” in 2007 (we ended up outrunning that goal substantially). It was always the intent to lock the door and turn out the lights at the end. The question was who or whom was going to be the one flipping the switch. It feels great to be able to say we’re going to do it together.

Even though we always intended to eventually wind our operations down rather than try to build a generational or legacy firm, we tested this notion over the last couple of years, considered adding new partners, and even spent time meeting a few people. It clearly didn’t feel right for us. We recognized Foundry as special because of the individuals and partnership we’ve shared. Trying to make this a legacy firm didn’t align with our motivations to keep it small, unique, and aligned. We had never planned for Foundry to be a legacy firm and the answer, for us, was obvious as we considered it deeply. 

We sat with the likely decision to make this our last fund for long enough to make sure it felt right to us as a group before sharing it publicly. Ultimately, we thought it was important to share the decision now, well before the fundraising cycle, as it impacts future planning for our limited partners and partner funds. All of us remain fully engaged and will manage the existing funds together. We just aren’t going to keep adding to our pile of Foundry work after this fund. 

As an LP, I wish more people would consider the path we’ve chosen. I think it should benefit our limited partners, our partner funds, and our CEOs to simply honor our existing obligations. For us, this decision and announcement provide clarity, focus on the real work, and alignment across our network. 

Choosing not to be a legacy firm is one way we’ve challenged norms in the venture industry. I’m not convinced that the natural goal for investment firms should be permanence. I don’t appreciate the virtue of that as a goal and I believe it competes with the prioritization of returns and alignment. After two decades, I don’t know of many (any?) venture firms or small investment firms broadly that have gone to the next generation without a few bumps and bruises. It seems the best transitions almost become something else, a new firm and a new culture around the then-current partnership. It might as well have a new name? In my view, that gives you the freedom to operate from first principles without any limitation or hangover from the previous strategy and culture. 

I believe it’s possible to create a lasting, legacy firm if you plan far in advance, recruit and retain future leaders early, and are very focused on protecting the brand of the firm. I think you almost have to set that intention as a goal from day one and put effort and resources behind it. I just question whether that should be the goal for partnerships that are, by their nature, unique.

One of the odd things about an announcement like this is that it doesn’t really change anything in terms of our day-to-day work. We have at least another decade ahead of us managing the Foundry funds. I’m excited to keep working with our founders, partner funds, and limited partners. As I’ve told many of them, you’re still stuck with me for a very long time! I love the community that we’ve built inside our network, counting many of the people as friends beyond the realm of work. It’s motivating to keep working with this crew for the duration. 

The question for me is how I layer in more investing beyond Foundry while maintaining my commitments to our existing funds. There is plenty of time to figure that out with a couple of years left to deploy Foundry 2022. I do know that I have a unique position and access to a network where I want to invest in much more than my individual balance sheet can support (much less even meet the minimums). It’s clear to me that the market cycle matches what I saw in the early 2000s with expanded opportunities across directs, fund and direct secondaries, GP seeding, and backing the best investors of the next generation. I can’t help but be energized for the investment opportunities ahead and beyond Foundry but more on that when the time is right.