We are thrilled to officially announce the launch of Bonfire Ventures, a new Los Angeles-based venture capital firm, with approximately $60mm to invest from our first fund. Bonfire invests in early stage startups with a software-based product and a business buyer (“B2B software” for short). We are a seed investor, typically entering at a Company’s first price round. We are geographically focused on Southern California and the Bay Area, though do invest in other regions where we have unique relationships with founders and co-investors. Our typical initial check size is $1 million, but we made initial investments as low as $250k an as high as $1.5 million. We are a low-volume, high-conviction, high-support investor that aspires to be a founder’s first call when they have a question or are wrestling with an issue. Finally, we employ a highly founder-centric investment approach where we seek to back exceptional founding teams that are experienced, cohesive, driven and trustworthy. In our opinion there is no substitute for the moral authority and the moral obligation that comes with being a founder.
Bonfire is a new name, but we’ve been investing in startups with this same investment focus in this same region for almost 20 years combined. Bonfire is founded by Jim Andelman and Mark Mullen, two “veterans” of the Southern California venture community. Jim previously founded Rincon Venture Partners, and Mark previously founded Double M Partners, two of the leading Seed VCs in Southern California focused on B2B software. The LA venture community is small and collegial, and the two of us have been frequent co-investors since 2012. The similarities in our views about investing were uncanny, and we talked regularly over the years about teaming up formally. The timing was finally right at the beginning of of 2017. Between the two of us, we have managed six prior VC funds, and invested in approximately 100 companies. These include The Trade Deck (IPO), Edgecast (acq. by Verizon), Burstly (acq. by Apple), Messagelabs (acq. by Symantec), Datapop (acq. by Criteo), Gradient X (acq. by Singtel), Orbitera (acq. by Google), Divshot (acq. by Google), Bitium (acq by Google), Lettuce (acq by Intuit), and many others. Every founder who received investment from Rincon or Double M should consider themselves part of the Bonfire Family, and we consider this “alumni base” to be our greatest asset. Incidentally, over twenty of those founders invested in this fund.
We launched Rincon and Double M years ago because we saw a pronounced upswell of entrepreneurial talent and startup activity in Southern California, and recognized that it was underserved by high-quality, local professional investors, especially at the earlier stages. We are grateful to have been a part of the development of this flourishing ecosystem, and we knew that the opportunity it represented going forward warranted a larger firm that could do more to support and foster B2B startup successes in Southern California and beyond. And frankly we want to build a firm that outlives us, which neither of us could do alone. That’s one reason we welcomed Leah Volger to the investment team in September 2017 as a Vice President. Previousy Leah spent four years at Google on B2B products, worked in VC at Santander InnoVentures in London, and served as CMO of the UK’s largest co-working and co-living startup. If you’ve met Leah, you know what a force she’s going to be in the SoCal startup community.
Each of our last three funds (vintages 2012, 2014 and 2015) has employed the same focus that we are employing at Bonfire. Because of the accomplishments of the founders we’ve backed, each of those funds is in the top 10% of all VC funds worldwide on a measure called Net TVPI (total value to paid-in capital), and each has a net IRR (internal rate of return) of 25% or more. We are continually refining a focus that seems to be working pretty well, and will continue to do so under the Bonfire flag.
Bonfire is already off to a great start (if we do say so ourselves). We quietly started investing early last year, and the new fund currently has nine companies in its portfolio. We’re quite pleased with the composition and progress to date:
- 7 of 9 are based in Southern California
- 7 of 9 were Seed investments (Series Seed)
- 7 of 9 were already generating revenue when we invested
- We are lead or co-lead for 5 of the 9
- Average Annualized Revenue when we invested was $1.025mm
- Average Annualized Revenue today (despite short hold periods) is $2.56mm, a 350% CAGR
The companies we can share at the moment are (in order of investment): Shippabo, Branch, Trinity Mobile Networks, Saferide Health, Postie, Fuel50and Tray. We’re honored that these teams chose us to travel alongside them on their entrepreneurial journeys.
We’ve joined forces to create Bonfire Ventures with the desire to build a firm that plays a leading role in the SoCal startup community (and beyond), fostering the development and success of B2B software businesses and B2B software operators. A firm that is the investor of choice for founders who have choices. A firm that talented founders are eager to introduce to their talented founder friends. A firm that is known for integrity, earnestness, hard work, smarts, expertise, empathy and most of all results. We will categorically and by design never be the largest firm around, but we hope to consistently “punch above our weight”, and foster a presence that is larger than our actual scale.
We could not be more excited about what lies ahead for us and for the community we serve.