The OpenAI Startup Fund is a venture fund related to but technically separate from OpenAI that invests in early-stage, typically AI-related companies in fields such as education, law, and science, with a $15 million tranche. has been secretly closed.
Two anonymous investors contributed $15 million in new cash on or about April 19, according to a filing with the U.S. Securities and Exchange Commission. The document was filed on April 25th and lists the name of Ian Hathaway, the manager and sole partner of the OpenAI startup fund.
The capital was transferred to a legal entity called a special purpose vehicle (SPV) related to OpenAI Startup Fund: OpenAI Startup Fund SPV II, LP
An SPV allows multiple investors to pool their resources and invest in a single company or fund. In the VC sector, it is sometimes used to invest in startups that do not fit the fund's strategy or fall outside the fund's terms. SPVs can also be marketed to a wider range of non-institutional investors.
This is the second time OpenAI Startup Fund has raised capital through an SPV, the first being in February for a $10 million tranche.
OpenAI Startup Fund's portfolio includes legal tech startup Harvey, Ambiance Healthcare, and humanoid robot company Figure AI. It became clear that it was being managed legally, and it came under intense scrutiny. While marketed like a standard corporate venture arm, Altman raised funding for the OpenAI Startup Fund from external limited partners, including Microsoft (a close partner and investor in OpenAI), and invested in the fund. He had the final say on investments.
Neither OpenAI nor Altman had a financial interest in OpenAI Startup Fund. But critics still argued that Altman's ownership represented a conflict of interest. OpenAI argued that the general partner structure is “temporary.”
In April, Altman transferred formal control of the OpenAI Startup Fund to Hathaway. Hathaway was previously an investor at VC firm Haystack and has played a key role in managing the startup fund since 2021.
As of last year, OpenAI Startup Fund (whose operations also include an incubator program called Converge) had $175 million in commitments and $325 million in total net assets. It has backed more than a dozen startups, including Descript, a collaborative multimedia editing platform valued at $553 million last year. Language learning app Speak; AI-powered memo app Mem. and the IDE platform Anysphere.
OpenAI did not respond to TechCrunch's request for comment at the time of publication. I will update this post if I receive a response.