After securing $14 million for its second fund in 2023, early-stage venture capital firm Kearney Jackson is launching its third fund, this time with $65 million in capital commitments, including money from a number of first-time institutional funds.
With offices on both the East and West coasts, Kearny Jackson invests in B2B SaaS, infrastructure and fintech infrastructure, often leading or co-leading rounds.
“One of the things we emphasize to founders who start with us is time to value,” co-founding general partner Sriram Krishnan told TechCrunch. “We're very fortunate with the LP mix that we have because at the end of the day, we want to build an early seed-stage platform that can work as quickly as our founders while also having great brands.”
Krishnan, who previously worked in product management at Tinder and Spotify, and co-founding general partner Sunil Chhaya, previously at Menlo Ventures and Tenaya Capital, said they have no problem investing in teams that don't have revenue or a product yet.
Thanks to Chhaya’s background as a venture capitalist and Krishnan’s background as a founder/operator, they attracted interest from limited partners including Sequoia and Marc Andreessen.
“Sunil and I have known each other for a long time,” Krishnan says. “He comes from the competitive world of Series A and Series B investing. We have the background to write larger checks and the experience to back these founders.”
The pair declined to name all of the limited-partner investors in the new fund but said they include at least three endowments, as well as pension funds and funds of funds, including StepStone. Sequoia, which invested in Carney Jackson's second fund, returned with a five-fold commitment, the pair said.
Other LPs include Bain Capital Ventures, Menlo Ventures, and a number of individual investors, including Andreessen, who also invested in Fund II (individually, not via Andreessen Horowitz), plus former GitLab CTO Eric Johnson, former Spotify CTO Andreas Ahn, Unit co-founder Itai Damti, and Insight founder Jeff Hallings.
Although the significantly larger size of their third fund gives the duo more leverage, they're happy to have started small.
The fund's larger size has allowed the duo to execute on a strategy of increasing ownership in portfolio companies. Kearney Jackson is investing about $1.5 million in pre-seed and seed-stage startups, targeting 6% to 10% ownership in the companies. That's smaller than the typical 15% to 20% stake most early-stage companies aim for, Chaya said, but it can make them more competitive in winning deals.
Krishnan and Chaya plan to invest in 30 to 35 companies over the next three and a half years, and they've already made a stealth investment in a startup led by an ex-Snowflake team.
“Previously, we would introduce founders to major VCs, but now we're in a position to do that ourselves,” Krishnan says. “If we'd chosen a bigger fund, I don't think our strategy would have been as well received. Here, we can get the ownership we want and work with big VCs and smaller VCs.”
Chaya added that the company is “perfect for backing early-stage founders.” As a result, founders often joke that they're “getting two for the price of one,” he said.
Notable investments from its first two funds include database company MotherDuck, engineering software company Cortex, insurance brokerage Comulate, Ethereum protocol EigenLayer, developer tools company Sprig and workplace productivity company Rhythms.