London VC Kindred Capital to share fund profits with founders
What happened
London-based seed venture capital firm Kindred Capital is closing its first £80 million fund with a unique "equitable venture" model. The firm will give the founders it backs a share of the fund's profits. This approach is designed to better align incentives between investors and the entrepreneurs in the firm's portfolio.
Why it matters
- Under Kindred's "equitable venture" model, 20% of the fund's carry (the profits) is shared among the founders of their portfolio companies, who are collectively treated as a fifth partner in the fund. - Since the initial £80 million fund, Kindred has raised subsequent funds, including an £81 million Fund II and a $130 million Fund III, with British Patient Capital being a recurring limited partner. - The model was pioneered by the firm's partners, including co-founder Leila Zegna, who have prior experience as founders and operators, with the goal of creating the venture firm they would have wanted to work with. - The collaborative approach has influenced deal flow, with portfolio founders sourcing nearly 60% of the firm's investments. - For its first fund, Kindred projected that approximately £5 million would be returned to founders, and 54% of its portfolio companies went on to raise Series A funding within three years, compared to an industry average of 19%. - This founder-friendly model operates within a thriving London tech ecosystem that ranks third globally, after San Francisco and New York, and has become Europe's leading hub for AI investment.
Key numbers
- London-based seed venture capital firm Kindred Capital is closing its first £80 million fund with a unique "equitable venture" model.
- - Under Kindred's "equitable venture" model, 20% of the fund's carry (the profits) is shared among the founders of their portfolio companies, who are collectively treated as a fifth partner in the fund.
- Since the initial £80 million fund, Kindred has raised subsequent funds, including an £81 million Fund II and a $130 million Fund III, with British Patient Capital being a recurring limited partner.
- The collaborative approach has influenced deal flow, with portfolio founders sourcing nearly 60% of the firm's investments.
What happens next
- The firm will give the founders it backs a share of the fund's profits.
Quick answers
What happened in London VC Kindred Capital to share fund profits with founders?
London-based seed venture capital firm Kindred Capital is closing its first £80 million fund with a unique "equitable venture" model. The firm will give the founders it backs a share of the fund's profits. This approach is designed to better align incentives between investors and the entrepreneurs in the firm's portfolio.
Why does London VC Kindred Capital to share fund profits with founders matter?
Under Kindred's "equitable venture" model, 20% of the fund's carry (the profits) is shared among the founders of their portfolio companies, who are collectively treated as a fifth partner in the fund. Since the initial £80 million fund, Kindred has raised subsequent funds, including an £81 million Fund II and a $130 million Fund III, with British Patient Capital being a recurring limited partner. The model was pioneered by the firm's partners, including co-founder Leila Zegna, who have prior experience as founders and operators, with the goal of creating the venture firm they would have wanted to work with. The collaborative approach has influenced deal flow, with portfolio founders sourcing nearly 60% of the firm's investments. For its first fund, Kindred projected that approximately £5 million would be returned to founders, and 54% of its portfolio companies went on to raise Series A funding within three years, compared to an industry average of 19%. This founder-friendly model operates within a thriving London tech ecosystem that ranks third globally, after San Francisco and New York, and has become Europe's leading hub for AI investment.
