Alpha’s Co-Founder, Brian Smiga was recently featured Forbes Midas Touch Newsletter. The below is a snippet from the newsletter:
An influx of specialist seed firms joining the ecosystem means that on seemingly every tech unicorn’s cap table, you’ll find at least one. But though micro VCs are plentiful, their dollars remain small. Funds of less than $100 million represented 53% of the firms to raise over the 2017 to 2020 period, but just 10% of the overall capital, according to data from PitchBook. Over the same period a decade previously, micro VCs were the same portion of funds — 53% — but made up 11% of capital raised.
Whether it’s Pear VC’s seed check into DoorDash or Initialized Capital’s into Coinbase, such early bets can still return funds and produce huge multiples — but also leave theoretical money on the table as firm’s stop exercising their pro rata rights as prices hike and fund reserves dwindle.
New York-based growth equity firm Alpha Partners looks to profit there, partnering with early-stage investors to help them keep doubling down on pro rata investments in their companies as they grow. Brian Smiga, a co-founder and managing partner at the firm, argues that early-stage investors have unique skill sets that can stay beneficial to founders later on but can be lost if they don’t maintain their stakes and board seats. “We think it’s a dance between operator type early-stage investors and the operating excellence of late-stage VCs,” Smiga says. “You need a certain kind of investor to take it to a halfway point, but you should keep that early-stage talent around as well.”