Announcing Preface Fund II
Today, I’m thrilled to announce the launch of Preface Fund II, a $23M inaugural institutional fund that will help start and grow enduring companies that build enterprise infrastructure technology that no one else can — and that everyone needs.
Over the past year, the pandemic has turned the world upside down, and fundraising was no exception. 90% of Fund II was raised over Zoom, and I’m grateful to the endowments, institutions, and individual investors who placed their faith and funds in Preface to empower founders during this unprecedented time. History shows that it’s during these times of challenge that some of the best companies were incubated, and it’s also times like these when it is hardest for an entrepreneur to make that first leap.
At Preface, we want to be that first investment that helps a founder get started — literally, the funding before they write their stories. With the launch of Fund II, I am excited to continue backing pioneers in software and security infrastructure, healthcare, and fintech.
I’m a first-generation Indian immigrant, so the idea of creating something within a new context is woven into my personal history. I understand intuitively what a big leap going from 0–1 can be — and the conviction it takes to leave a steady job, never mind during the economic uncertainty resulting from COVID-19.
I’m also personally committed to increasing diversity and improving inclusion within the VC space by supporting early-stage founders who come from underrepresented backgrounds. So often, the companies that I back aren’t started by the Stanford or Harvard drop-outs of the world; in my experience, that’s not the signal we need to look for. Instead, Preface founders are often immigrants, people with 10–20 years of industry experience, and a hunger to build something beyond themselves. 56% of Preface’s portfolio companies have been founded by immigrants, and 59% of founders are age 35 and older. 70% are repeat founders who want to go even bigger this time. This isn’t just the right thing to do, though — our proprietary sourcing algorithms show time and again that this is the smart thing to do: Klarman, our proprietary tool, has roughy 45 features that are predictive of future entrepreneurial success and timeliness, indicating not only whether the company will be successful but also when it is the right time to build for themselves.
What’s more, our founders are typically repeat founders or ex-vice presidents of product or engineering who had a critical enterprise problem internally at their motherships. They couldn’t find a fitting solution, so they built the product themselves internally. Their new companies are based on their learnings.
With the launch of Fund II, I’m committed to continuing to build a diverse ecosystem, where founders have the experience to back up their vision but don’t have to fit the startup stereotype.
What’s next?
Preface’s work is just beginning right now, and I’m going to continue looking for more amazing founders to partner with while continuing to support the teams Preface is already invested in. We’re the capital before your story.
And if you’re building something, it’s never too early to reach out. Get in touch at farooq@prefaceventures.com.
