Two of Silicon Valley's best-connected investors have closed their first fund as their own venture firm, SherpaVentures. They met because of Uber, and Shervin Pishevar and and Scott Stanford now have $154 million to find the
SherpaVentures began raising early last year when Pishevar left Menlo Ventures and Stanford stepped down from Goldman Sachs, and announced it had raised $87 million of its fund back in February. Now with its full fund raised, Stanford says he and Pishevar are ready to back companies in the "on-demand economy," services and commerce solutions that are quicker and adapted to the mobile consumer.
"Buying decisions will move mobile," Stanford says. "I was sitting at a conference today, and a woman on the panel leaned over and told me she bought her Tesla car in 3 minutes on her mobile phone. That was a thought-out purchase, but it was so convenient. We believe the research for shopping will move over more to that."
Sherpa's made four public investments so far, including a just-announced Series A round in Shyp, a company that works with shipping carriers to offer a consumer the cheapest route for their item. Sherpa will have an early-stage focus also including Series B rounds, like the $28 million one it led recently with food startup Munchery. It's other two investments are back office software company BackOps and visual storytelling app Storehouse.
The fund will also look at seed investments, though those won't be the focus. As round sizes grow, investors must look earlier, Stanford says, pointing to multi-million seed rounds like the one Shyp earlier got as fundraises that might have been Series A rounds in past years.
The size of the fund is the amount of money the two and their total team of 12 can invest on their model over three years, Stanford says. But one area where Sherpa will be different from some venture firms is that it's going to allow some limited partners to join in on individual investments. "They can work with us in larger transactions, participating. We don't believe in massive funds with big fee structures."
That model's already been put to work with Munchery, with some of its Series B funding coming direct from Sherpa LPs.
Pishevar and Stanford don't plan to hire marketing experts or a large group of support staff, instead planning to use their own virtual rolodexes of Silicon Valley experts for their companies. Pishevar's a veteran of Menlo Ventures, where he led an early investment in Uber. Because of that investment he eventually met Stanford, who led Goldman Sachs' investment in Uber, as well as in Facebook and Square.
The two will also leverage the expertise of Tina Sharkey, a former
Stanford says that the founders have already looked at over 500 startups, all sourced to them from their networks. Sherpa won't do cold calls or expect to find many companies that aren't referred by people they trust. And it's unlikely to back an Uber rival anytime soon.
The other way Sherpa will try to set itself apart--and a message as timely as ever given the stir over Airbnb's just unveiled new logo--will be that Sherpa focuses on the brand success of its companies, particularly in commerce. "The technology is rarely a major barrier for entry there," Stanford says. "What ultimately these companies need to do is build brands, global ones that consumers will love."
SherpaVentures has to build out its own portfolio and brand into something its investors will love, too, one successful exit at a time. "We will look for the very big opportunities, the billion-plus outcomes."
