Announcing Threshold’s New Funds
Building a venture capital firm that’s focused by design
By Emily Melton and Josh Stein
We’re proud to share that Threshold has raised two new funds: Threshold IV and Threshold Select. Together these funds have committed capital of more than $450 million, which we intend to invest using the same proven strategy we’ve followed since Threshold’s inception: aligning our interests with exceptional founders who are building high-growth companies that transform our world with innovative new solutions.
The two of us have significant experience in venture capital. But what makes us somewhat unique is that we’ve been investing together, as a team, for 18 years. We learned the business together and over time we developed a shared set of principles about what really makes a superior early-stage venture capital firm. When we had the opportunity to build a new firm where we could put those principles into practice, we seized it and co-founded Threshold.
One of our core principles is a deep conviction that our job is ultimately all about enabling founders, the true heroes in the story of every startup. We celebrate their companies, their products, their growth — and most importantly, the transformative impact they have on their industries. As investors, we aspire to be coaches, not players: providing crucial support and advice, but also recognizing that it’s the players on the court who actually win the games.
We began deploying our first fund in 2014, and since then we’ve raised and deployed two additional funds. As we invested in those three funds, we were incredibly fortunate to partner with exceptional companies like BetterUp, Doximity, Front, LaunchDarkly, Livongo, Rippling, Remitly, and Talkdesk, just to name a few.
In 2019, we renamed our firm as Threshold. The word is a nod to another of our shared core investment principles: that we are looking to invest at “threshold moments,” those magical moments when changes in markets, technology, and other factors come together to set the stage for disruptive change and non-linear growth.
Venture has changed dramatically since we started in the business. The amount of capital raised in recent years has been a tremendous enabler for innovation. It has also made venture capital an increasingly competitive and challenging market. We’ve seen both a wide range of new entrants and dramatic increases in the size of many long-standing firms.
We believe that as many of these firms have scaled up, building large teams and jumping into new markets and sectors, they’ve also materially changed their strategies and changed the way they partner with founders.
At Threshold, we have not. This decision gets to a third core principle: we believe we can best help our companies grow by remaining disciplined with our own growth and scale. By staying small, we believe we will help our companies grow bigger. This may sound paradoxical, but we’ve learned from experience that we make our best decisions and are able to best support our entrepreneurs when we maintain our own focus. We want to invest with conviction to build our funds with concentrated portfolios, and we are unwilling to compromise on the level of engagement we can offer to our companies.
Eight years into Threshold, we’ve been fortunate to share this adventure with an incredible group of people. Our investment team for these new funds includes Chirag Chotalia, Katie Evans, Mohammad Islam, Megan Kelly and Heidi Roizen, and we have other partners like Andreas Stavropoulos and Bill Bryant who remain active with our earlier funds. We have an additional nearly twenty Threshold colleagues who support us and our efforts, working in our portfolio services, finance, and support teams, with each playing a critical role in executing on our mission.
Threshold IV and Threshold Select
While our core mission is to support and partner with entrepreneurs, we also manage our business to generate exceptional risk-adjusted returns for the limited partners who entrust us with their capital. With these new funds, we were honored to welcome back LPs who have been with us since the beginning, as well as new LPs who are partnering with us for the first time. We greatly appreciate the confidence our investors place in Threshold and how they have embraced our differentiated approach.
Our new funds will allow us to continue to deliver the exceptional results that we’ve demonstrated with our previous funds. While Threshold has only been investing since 2014, we have already been able to generate more than $2 billion in gains for the investors in our funds and, while we invest at the early stage, in Threshold I we were able to return a multiple of our investors’ capital commitments in less than 8 years.
As we announce our new funds, we’re cognizant of the tremendous volatility around the globe, both economic and political. Yet innovation has always been enabled by the need for change, and in prior cycles we’ve seen that many of the most enduring companies rise up during difficult times. We see the opportunity, and also the responsibility, to support the companies and founders whose ideas and efforts will help transform industries, create better solutions for customers, and change our world for the better.
We invest a lot of ourselves into the companies we fund. We invest our time, our capital, our expertise, our experience, and our networks. We believe in relationship-driven investing. Our mission is to seek out and support the true agents of change, bold thinkers who are driven to build new businesses with purpose. These new funds give us a new platform to do our work: to help founders do theirs.