When seed-focused Pear VC raised a $432 million fund last year, co-founder Peyman Nozad said it meant the firm had achieved “unique product-market fit.” Its fourth fund was nearly three times the size of its previous $160 million fund.
The 11-year-old firm wants to help emerging venture funds follow in Pear's footsteps, and on Wednesday it announced the Pear Emerging Manager in Residence program, which will bring three promising pre-seed and seed venture funds to Pear's offices for collaboration, including sharing deal flow and due diligence.
Pear will also invest in these managers' funds, facilitate LP introductions, and write $250,000 checks to provide early access to companies in Pear's accelerator, a privilege typically reserved for partners at top firms like NEA, Lux Capital, and Sequoia Capital.
The firm's emerging manager program was the brainchild of Pear partner Kathleen Oestreich, who previously ran her own startup firm, MKT1 Capital. Instead of launching a second fund, which would have been a Herculean endeavor in the current fundraising environment, Oestreich joined Pear a few months ago.
Before joining the company, Oestreich spoke with Peer founders Peyman Nozad and Mar Hershenson about the importance of operators-turned-fund managers in the VC ecosystem. Oestreich's idea resonated with Nozad and Hershenson, and the idea for a residency program run by Oestreich was born.
“We've picked three up-and-coming managers and have them fully involved in our work,” Nozad says. “We've invested in their funds. They're looking at our deal flow and how we value deals. We've given them offices and we're helping them raise capital.”
To be sure, Pear isn't the only venture capital firm partnering with emerging managers: Firms like Bain Capital Ventures have dedicated funds of funds to invest in new venture funds.
Unlike BCV, Pear is investing directly from its latest fund, Esreich told TechCrunch. “We're trying to make Pear an extension of Pear,” she said. “I also think knowing what the next stage of venture funding is going to be will help them get there faster.”
The inaugural members of Pear’s emerging managers program include Sarah Smith of Sarah Smith Fund, John Gleeson of Success Venture Partners, David Ongo Ongchoco and Adarsh Bhatt of Comma Capital.
Oestreich said the funds were chosen because they bring unique added value to the early-stage ecosystem — Gleason runs the largest customer success meetup in the country, for example, while Comma Capital has a strong community of mid-career engineers at top tech companies — and peers can learn from Smith about their unique approaches to engaging with founders.
Oestreich said the Pear Emerging Manager in Residence program will run for a year and is expected to welcome three new VCs into the office within about 12 months.