Managing Partners Bradley Tusk and Jordan Nof

We Started a New Kind of Venture Capital Firm.

We’re Four Years and Two Funds In. What Does it All Mean?

Tusk Ventures
Tusk Venture Partners
4 min readDec 18, 2019

By Bradley Tusk and Jordan Nof

When we decided to start Tusk Venture Partners four years ago, most tech companies didn’t really care what government thought about them. To us, it was clear they should. Given our respective backgrounds and the number of new companies challenging traditional industries, it seemed obvious that someone should start a venture fund focused on investing in regulated markets.

We knew Uber wouldn’t be the last company to clash with city governments and regulators. Having a platform capable of providing portfolio companies with support navigating the world of government and politics seemed quite compelling.

Now fast forward. This week, we held the final close of our second fund, TVP II LP, with a fund size of $70 million, more than 2x the size of our first fund. This is a big milestone for us and we wanted to mark it by looking at what it took to get here, what we’ve learned and where we’re going.

It’s not always easy. Raising our first fund was extremely difficult. Difficult things always are. We believed in ourselves and our thesis — but it wasn’t easy to get others to understand it. We spent months meeting with a countless number of potential investors. We heard “no” for every reason you could imagine. The response wasn’t exactly unexpected, but it was humbling to say the least.

In late 2016, someone finally got it and we found our Anchor LP. Then, a few others did too, and in late 2017, eighteen months after we started the process, we held the final close of the first and only venture fund dedicated to investing in startups in regulated markets with an LP base excited to back our vision.

In other words, differentiation is imperative. Despite the fact that neither of us had raised a new VC fund before — and yes, we didn’t know a lot of things — one thing we did know was that being truly differentiated was imperative — we needed a “superpower” that would set us apart.

The thesis of Tusk Venture Partners is simple, but unique: regulated markets are starved for innovation. The most ambitious, transformative companies are tackling complex problems and often creating new markets altogether, where no regulatory framework likely exists (yet). We invest in early stage startups operating in highly regulated sectors. We understand regulatory risk in a way that no other venture firm does, and we help our portfolio companies execute against it like no other venture firm can. That’s our superpower.

That means investing in Bird and helping launch scooters in cities across the U.S. It means investing in Lemonade and helping them get insurance carrier licenses in each major state. It means investing in Roman and helping ensure telemedicine regulations allow them to create the novel healthcare model they envision.

We also believe that to find long term success in this industry, you need to make a mark, and you need to make it early. We knew that we needed to find conviction in our portfolio companies, follow our instincts, and take big swings.

In that same spirit of being bold, we want to share the early results of our first fund. We hope that they speak for themselves. In Fund I, we invested in 18 startups and have already seen some grow into transformational companies. A few of them include: Lemonade, Bird, Ro, Care/Of, Lyric, and Kodiak. This is where the net performance of our 2016 Fund stands as of Q3 2019(1):

  • Net IRR: 64.6%
  • TVPI: 2.3x
  • DPI: 0.2x
  • RVPI: 2.1x

To us, these are encouraging signs that our thesis is working, but we also know we have a long way to go.

If the fight to get here wasn’t so difficult, perhaps we wouldn’t appreciate where we are now, or have the same confidence about where we are going. With our latest fund, TVP II, we’ve started to lead rounds and take board seats at companies like Sunday, Boulder Care, and Alma. We’re especially proud of the fact we’ve invested in female led companies at more than 10x the industry rate. And we continue to reinvest heavily in our talented and growing team.

As we develop a longer track record, will raising capital become easier? We hope so. But the foundation of our fund is fundamentally different from many traditional VCs and from what LPs are used to evaluating.

Maybe the risk of a “new model” will always outweigh the reward to some investors. Or maybe new venture models will become the new normal. We’ll see. But no matter what, this is the only approach that makes any sense to us. And so far, that just might be exactly why it’s worked.

You can read more about our new fund in Fortune.

(1) The performance information above is presented “net” of management fees, organizational expenses, partnership expenses, and hypothetical carried interest. The performance information herein may not be indicative of Tusk Venture Partners future results.



Tusk Ventures
Tusk Venture Partners

Helping the next generation of great startups navigate the political, regulatory and media hurdles that come with challenging an entrenched industry.