Overlooked Ventures LP, a firm focused on investing in diverse founding teams, has raised enough in five months to back its first four startups, with a fifth deal in process.
Founded in May, the fund has commitments of $8.5 million toward a two-year goal of $50 million. Founding partners Janine Sickmeyer and Brandon Brooks started closing deals with startups right after hitting $5 million, instead of the typical practice of waiting for at least one-fifth of the fund to be raised, Sickmeyer said.
"We said, 'No, we’re changing things,;" she said. "We wanted to start deploying capital into these startups immediately."
Sickmeyer, in Columbus, and Brooks, based in South Carolina, have 30 virtual meetings with founders set for next week alone.
A mix of individuals and institutions make up the limited partners, 70% female. Among them are Katelin Holloway, a former Reddit executive and founding partner of VC fund Seven Seven Six; Arlan Hamilton, founder of Backstage Capital, another fund focused on inclusive investing; and Frank Rotman, one of Capital One's first analysts and founding partner of Washington, D.C., VC firm QED Investors.
"Some of the individuals are Columbus-based former founders who have exited, and are excited to be part of the journey – and want to see more money go to women founders and Black founders," Sickmeyer said.
Overlooked is a hands-on investor working alongside founders, she said, and the LPs are pitching in. Rotman, for example, is coaching financial technology companies toward future rounds.
"Brandon and I are both founders and operators first," said Sickmeyer, who bootstrapped a legal services startup to acquisition. She lends her marketing expertise to portfolio companies.
Investments so far are $100,000 to $500,000. Overlooked aims for about 10% ownership with pre-seed and seed rounds, and is reserving a portion of the overall fund for follow-on investments in future rounds, to ensure those LPs see returns.
"We want to be early, be first for a lot of these companies," Sickmeyer said.
"Mainly we’re looking at the team, the product, the market, the growth potential and the execution," she said. "How far did they get with nothing? We can tell from the scrappiness of the founder – just because we had that experience as well."
The latest investment, announced this week, is Moment AI, in a round alongside SoftBank and a Netflix engineer.
Founder Megan Gray, a former Google engineer, started developing the technology after being diagnosed with epilepsy and told she could never drive again. The system of monitors and AI including facial recognition is intended to integrate with autonomous and connected vehicles, as an early warning for not only impending seizure but drowsiness or impaired driving.
And Gray, who is Black, also is improving facial recognition technology that notoriously fails at analyzing people with dark skin.
"As soon as we looked at that deck, we thought, 'Wow, this is going to be big,'" Sickmeyer said. "(Gray's) story is so incredible. ... She doesn’t get as much coverage and attention as she should."
The others so far:
- Lalo, a consumer app for funerary remembrances and family life stories. "This market is an untapped market," Sickmeyer said.
- Govalo, a gifting app for the Shopify ecommerce platform founded by Shopify veterans. "The team is really all-stars," she said.
- College Cash, an app to help pay down student loans through employer benefit programs and payments for the user's promotion of brands over social media. "There’s this circle of wins on all sides of the business model," she said.
Overlooked plans another announcement this month and aims for three more investments by year's end. None so far is based in Central Ohio.
The VC fund is raising publicly from SEC-accredited investors under a provision of the 2012 Jobs Act that allows the practice within guidelines. It will be capped at 99 limited partners under U.S. Securities and Exchange Commission rules. Sickmeyer and Brooks are the only full-time employees, with a virtual team of nearly a dozen part-timers and contractors.
The partners aim for in-person meetings soon with founders. But teleconferencing enables Sickmeyer, who has four children under age 7, to go from throwing her twins' third birthday party to closing a deal the next day.
"The pandemic gave us this opportunity to be on a level playing field," she said. "I don’t have to leave my kids and my family to fly all over the place."
