Album VC Announces $200 Million Fund IV
Today Album VC announced its fourth fund, a $200 million seed fund that follows Album's successful seed investment formula. The firm plans to invest half of the fund into new projects and set aside the remaining half for follow-on investments. It's the largest fund Album has ever raised and ten times (not including inflation) the size of the company's first fund, a $20 million fund raised in 2014.
The Lehi-based venture firm has become well known for its small but astute team of partners, John Mayfield, Sid Krommenhoek, and Diogo Myrrha, whose investing careers were "born" in Utah. They have been active participants in Utah's epic rise of tech.
TechBuzz profiled the Album team last November and touched on the firm's unique alchemy of success that blends humility, an immigrant perspective (two thirds of the partner team are first-generation Americans), an indifference to Ivy-league degrees, the inclusion of middle class pension funds partners in their funds, and high-touch investment style in which each of the three partners is heavily involved in investment decisions.
"This is not a commoditization type business yet," says Krommenhoek. "We don't think it ever will be. Founders are humans and humans are flawed and crazy and beautiful; there's something that just goes on between a VC and a founder that we think is especially hard to replicate."
One thing that Album has replicated is its knack for funding unicorns. The team at Album boast a 7/7 hit rate of Utah unicorns "before they have horns," as was recently illustrated in Pitchbook.
"Fundraising has gotten dramatically easier for us," says Mayfield. "For Fund IV we added a high caliber of institutional LPs, pension funds, and other groups that roll up to the middle class."
Album is also recognizing the successes of the founders in its portfolio by including them in Fund IV as Limited Partners. The company experimented with this practice with Fund III and expanded it in this latest fund: 35 founders from Album portfolio companies are participating as investors in Fund IV.
"Symbolically we think it has a lot of power," says Krommenhoek. "There was no pressure, but we put the question out there. 35 founders who have done well in Utah are now reinvesting in the next generation of Utah founders. We think a lot of the next generation great founders will come from referrals directly from these LPs or later on from people related to their companies."
"Looking at where we've come from gives us a deep sense of gratitude for the investors, LPs and founders who have believed in us and have let us be a part of their journey," says Mayfield. "We look forward to putting this fresh 200 million to work in this state."
Myrrha announces the new fund and a bit about Album's eight-year journey to Fund IV on LinkedIn: