Skip to main content

Venture capital firm Transform Capital is raising $100 million for a growth fund that seeks to inspire more venture capital philanthropy by committing a portion of the returns to nonprofits chosen by its LPs.

Why is this important: Many investors claim to “do well by doing good,” but few have incorporated philanthropic giving into the very structure of their fund.

How it works: Many impact funds seek to make a difference by investing exclusively in mission-driven companies. Transform Capital takes a different approach.

  • Unlike the usual 80-20 split with LPs, the general partners – former BlueRun Ventures GP Jonathan Ebinger and serial entrepreneur Aihui Ong – drop half of their carry and dedicate 10% of any return to causes close to their limited partners’ hearts whenever there are any. is a liquidity event.
  • “For [LPs]it feels like a 90-10 fund,” Ebinger told Axios. the entire fund is refunded.”

Between the lines: With $100 million expected when the fund closes, its general partners plan to invest in 30 companies and are aiming for a 3x return.

  • But you won’t see Transform Capital directing investments or taking big early bets on unproven companies. Instead, it plans to invest exclusively in late-stage companies with a high probability of exit.
  • “This fund writes smaller checks to bigger unions,” he says. “We’re not looking for ownership – we’re looking to invest in the best late-stage companies, which have oversubscribed funding rounds that we can participate in through the mandate we have around philanthropy.”

To learn more about this and other deals in this industry, subscribe to the Axios Pro Fintech Deals newsletter here.