At a time when most limited partners continue to confine their venture allocations to the most well-established fund managers with proven track records, VCs raising their first, second or third funds have gotten more strategic about the LPs they pitch.
The pool of available capital from LPs is also shrinking amid rising pressure on US college endowments, as colleges scramble to offset cuts in federal grants and anticipate an endowment tax that Congress is currently weighing. There are also competing demands on family office funding as more of those investors hire investment officers and raise their own venture funds, wanting greater control over how their capital is deployed.
From narrowing their pursuit to investors more closely aligned with the GP’s mission to seeking anchor investors and shrewder exit strategies, emerging managers are looking for an edge.
Mendoza Ventures, located in Boston, invests mainly in early-stage Al, cybersecurity and fintech. It began raising its third fund in 2023, targeting $100 million, and has closed on roughly $40 million to date. The fundraising process for Fund III (the firm’s first institutional fund) differs from that of Fund II, partly due to market instability, says general partner Senofer Mendoza, who founded the firm with her husband Adrian Mendoza in 2016.
