Vancouver’s Version One Ventures has launched their first opportunity fund with $25 million in commitments.
An opportunity fund is a separate pool of capital that allows a VC to continue to invest in its most promising portfolio companies once the core funds have exhausted their follow-on reserves. This puts the VC firm and its investors in a position to continue to exercise their pro-rata rights in later-stage rounds instead of giving them up.
Referencing opportunity fund pioneer Union Square Ventures in the announcement, Version One founding partner Boris Wertz shared his thoughts on the firm’s blog yesterday.
“We at Version One have long been thinking about an Opportunity Fund for our firm, but only recently decided that we should actually pursue this strategy. I am very happy to announce the Version One Ventures Opportunity Fund I with CAD $25m in commitments,” wrote Wertz.
“The mandate of the fund is to invest in the most successful companies from Fund I (2012 vintage) and Fund II (2014 vintage).”
Unlike some opportunity funds that also invest in later-stage companies outside of the existing portfolio, Version One clearly plans on using the funds to double down on those in their existing portfolio that are fast-scaling Series B and Series C companies.
Unfortunately this new opportunity fund is too late for two Version One Fund I portfolio companies that recently raised Series D rounds.
Burnaby’s Clio raised a USD $250 million round in September and Toronto’s Top Hat raised USD $55 million last month.