Some years after a shakeup at enterprise capital fund Kleiner Perkins, one among its star B2B buyers, Ted Schlein, form of left to start out his personal agency. Two years in the past, he launched Ballistic Ventures with an inaugural $300 million fund, a laser deal with cybersecurity, an attention-grabbing enterprise mannequin, and a who’s-who of co-founders as basic companions.
Now Ballistic has already closed a second fund, even greater than the primary.
“We got down to increase a second $300 million fund and stopped at $360 million,” Schlein instructed information.killnetswitch.
The previous couple of months concerned many calls with potential restricted companions (LPs) who requested them about every little thing starting from their backgrounds to “if you happen to have been a cat, what sort of cat wouldn’t it be?” However they hit their aim surprisingly quick given the present VC bear market. Ballistic formally registered its plans for a second fund simply 4 months in the past, in November, TC was first to report.
Arms-on with their startups
In an age the place some VCs say that being “founder-friendly” means retaining their VC claws out of operations, Ballistic has the polar reverse philosophy.
For example, Founders Fund accomplice and Anduril cofounder Trae Stephens instructed the group at TC’s Strictly VC LA occasion in February: “The extra {that a} VC says, ‘I’m going so as to add worth,’ the extra it is best to hear them say, ‘I’m going to bother the ever dwelling crap out of you for the remainder of the time that I’m on the cap desk.’”
The Ballistic crew scoff on the thought. They all the time take board seats. They speak to their founders “many instances per week,” Schlein says. As a result of all of them have run cybersecurity companies – and so they solely spend money on security – their secret sauce is their involvement coupled with their large community of contacts, they are saying.
“I’ve been at this for nearly 30 years, and I nearly all the time helped ship the primary 10 prospects to each firm that I’ve ever been on the board of,” Schlein stated.
Common accomplice Jake Seid says that every one of Ballistic’s crew works with all of their portfolio firms, routinely bringing within the first three to 4 million {dollars} of annual recurring income or serving to rent their first engineers.
Schlein solely makes new investments from Ballistic’s fund however stays a accomplice at Kleiner, overseeing his earlier investments/board seats and retaining his “carry” – the p.c of income – if these startups do nicely.
Early success
Two years in, Ballistic’s strategies look like working to date. Though they haven’t even totally deployed their first fund, They’ve already had one profitable exit of portfolio firm Talon Cyber Safety, purchased by Palo Alto Networks in a deal valued at at $625 million, information.killnetswitch reported.
It’s unimaginable to know what number of extra successes they are going to have. However as a result of Ballistic solely invests in early startups the place it may be the primary institutional cash on the cap desk and takes a board seat, they’ve extra management than different VCs have.
This helps them, for example, defend their investments from phrases from later buyers that would damage them, reminiscent of “liquidation preferences” that may give one other investor precedence to the money from an acquisition.
And Ballistic incubates startup concepts internally, discovering individuals to construct and run their concepts. There are two such startups in stealth from Fund 1 in the meanwhile, the companions say.
Ballistic expects to wrap up investing out of Fund 1 after, maybe, two extra startups, bringing its whole Fund 1 portfolio to round 20 firms, and to start investing out of the second fund in one other two months, Seid stated.
