News

Fund II: The Sum of Our Parts

By
Mallun Yen

The startup journey is full of firsts and nexts - the first hires, customers, product; the next round, executive, milestone. We set out to break some ground in the venture ecosystem with our first fund. We were the first to bring active operators in at scale as Limited Partners (LPs). For more than 75% of them, it was the first time they had invested in venture or a fund. It was accessible and flexible for the first time, allowing busy operators to participate on their terms and fit into their lives - not the other way around. For many founders, it was the first time they interacted with and benefited directly from LPs, who are typically silent check writers behind a fund. 

Today, we’re proud to announce our $92M+ second fund, and share what’s next for Operator Collective. 
                
We launched our inaugural $51M fund in December 2019 to solve a glaringly obvious problem. Companies succeed for one reason: the people who found, build, lead, run, and scale them. But venture revolves around two core groups - founders and venture capitalists, often with the same backgrounds. Their networks have always intersected and overlapped, and as a result typically look the same, especially in tech. Venture (and therefore wealth creation) is largely concentrated within this group, leaving out the critical third leg of the stool - operators, especially those from diverse backgrounds. 

Operators aren’t part of the natural network of the venture world - but they should be. Venture needs active operators - not only do they have the in-the-seat experience building companies, they are the customers and the ones tied into the current talent networks. And when you can gather exceptional operators from diverse backgrounds together at scale, there’s a multiplier effect with all of their range of expertise, experiences, and networks too. The idea behind OpCo was to create a way to weave these different networks together and align incentives. We created a flywheel, not a funnel, to expand access, wealth creation, and influence beyond the usual suspects – changing the face of tech from the ground up. 

We’ve seen it in action over the last four years. Founders can now tap into a diverse community of the most exceptional operators actively building today’s most successful tech companies. These operators are invested, literally, in the success of our founders and portfolio. They offer their invaluable expertise, proven experience, and wildly strong networks. We’ve made well over 800 meaningful connections for our founders and CEOs to our operators. Over 100 have been to potential customers, with dozens resulting in signed contracts. Executives, advisors, board members - you name it and we can tap someone with the right expertise who understands what is needed in your exact stage and moment. Everyone is incentivized to win together. It’s truly the Collective Venture Model™

Beyond being tech’s most respected executives, our Operator LPs are 90% women, 40% people of color. More than half of our portfolio has been referred to us by our LPs, and while we invest in founders from all backgrounds, it turns out that when you diversify the people who have the money, it tends to have a trickle-down effect. 43% of our portfolio companies have a female founder, and 64% of our portfolio companies have a person of color founder. That’s 6x and 25x higher than the enterprise tech industry, respectively, which is our focus area.

In the four years since we started Operator Collective, it’s been encouraging to see venture changing and there are increasing opportunities for operators to participate, whether in funds or as angel investors. What’s next for us? We’re sticking to our fundamentals, staying focused on early-stage enterprise and B2B founders, and doubling down on what works. We now have over 200 seriously exceptional operators around the table. Among those who’ve joined Fund II are the COO of Atlassian, CCO of Figma, President of Okta, and VP of Technology at AWS. We’re all invested, and we’re all in it together. The Collective Venture Model™ works because community isn’t tacked onto our venture fund, it is core to our venture fund. 

It’s a first for us to have a second fund, and we couldn’t be more excited about investing in what’s next. We are so grateful to every one of you who believed in our vision, helped us bring the Collective Venture Model™ to life, and continue to build with us every day. Every opportunity, introduction, referral, insight, piece of advice has been a meaningful connection that has made us stronger. We would not be where we are today without you. Collectively, we are truly greater than the sum of our parts! 

Cheers to what’s next,
Mallun and the OpCo team 

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