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To invest in “unsexy businesses,” solo GP Nichole Wischoff raises $20 million for a fund backed by Peter Thiel

Although venture capital funding for businesses is expected to decrease in 2022, investors are still raising cash of all proportions. However, only a small fraction of companies are headed by sole general partners (GPs), a number that is on the increase but still much lower for women and those with no prior experience in venture capital.

This sets Nichole Wischoff apart from the norm: After raising just $5 million with her first fund, Wischoff Ventures has now completed a second fund of $20 million. Her goal is to put money into twenty-five to thirty pre-seed and seed stage U.S. businesses.

Wischoff limited her prior fund on purpose since, as she said, she was still working full-time as a startup operator up until March. She hopes to increase the size of her donations from $300,000 to $1,000,000 now that she can devote her whole attention to her fund.

Wischoff emphasised that “pushing in strongly on B2B” will be a focus of the new fund. A common line of mine is, “I invest in boring firms!”

Companies that apply AI/ML to huge legacy industries or incorporate fintech into their core offerings are of special interest to her. However, industrial automation has a special place in my heart. Everything that contributes significantly to the U.S. economy fascinates me.

When looking outside the realm of financial technology

Wischoff has a strong fintech bias in his current portfolio, which includes firms including Coast Pay, Loop, Nuvo, Trustlayer, and Vesta. The second, however, will expand upon this. She remarked, “I don’t want to be pigeonholed inside fintech, but I know fintech well.”

Wischooff was a founder member of One Finance, a neobank bought by Walmart this year, and an early employee at lending platform Blend Labs, which went public in 2021, before he struck out on his own as a general partner.

Wischoff’s “great financial consequence” from One’s purchase prompted her to start investing as an angel when she was working at construction fintech Built, and later to start her own fund with external LPs.

Peter Thiel, Lee Fixel, Jerry Chen (Yahoo co-founder), Bain Capital, Byers Capital, Cendana Capital, Crossover, Insight Partners, and others are among the investors in this new fund.

A number of these angels and funds had previously invested in Wischoff’s initial fund, although her current limited partners (LPs) look different than they did before.

Wischoff’s data suggests that family offices have grown to make up over half of her second fund, up from a third in the first. For instance, the family office of the late American entrepreneur and philanthropist Henry Crown, Four More Capital, is a backer of her most recent fund.

Wischoff expressed a need for more transparency from VCs on the make-up of their limited partnerships (LPs) in an email exchange. Following suit with her commitment to openness, she disclosed that it took seven months, rather than two, to raise her second money.

Stell, an engineering-focused startup founded by two women with backgrounds in aerospace and defence, was the first recipient of an investment from her second fund, with the stated goal of assisting in the “reduction of defects and the acquisition of parts more rapidly by hardware engineers and purchasers.”

Wischoff’s portfolio may be on pace to promote what she calls “American dynamism… the genuine one” if her future investments are anything like Stell, a subject we hope to discuss with her soon in a separate conversation.