First Round Capital to stick with seed-stage after $175m Fund IV final close


seedsUS early-stage investment firm First Round Capital plans to keep its “laser focus” on seed-stage deals after holding a $175m final close for its fifth fund.

The close seals a rapid return to fundraising, with First Round only closing its fourth fund in 2012.

That vehicle picked up $135m, the same as Fund III, indicating First Round plans to up the stake with the latest fund.

But managing director Josh Kopelman wrote on the Redeye VC blog the firm would continue to stick to its strategy of backing seed-stage deals rather than expanding upwards into Series A and B rounds.

He said, “In 2008, when we closed First Round II, I wrote, ‘We prefer to see and fund companies early – after all, we’re not Second Round Capital. We are comfortable with Powerpoint Risk and are used to funding incomplete technologies, teams and business models.’

“I could say the same thing today. Back then, we were flooded with requests from later-stage companies who saw that we had raised a larger fund and were looking for Series A and Series B capital.

“We passed on those opportunities to stick to our seed-stage roots.

“And now, with First Round V, we’ll continue to serve the seed market with the same strategy and initial investment sizes.

“We believe in the power and purity of being specialists.”

Earlier this year First Round reinvested in language translation software business Smartling through a $25m Series D financing round.

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