Xfund is an American venture capital firm with offices in Palo Alto, California and Cambridge, Massachusetts.[3] It provides early-stage venture capital to entrepreneurs across multiple disciplines.[4][5] Xfund was founded as the Experiment Fund in 2012 as a partnership between the venture capital companies New Enterprise Associates, Accel Partners, Breyer Capital, and Polaris Partners.[6][5][7] Anchored at Harvard University’s School of Engineering and Applied Sciences (SEAS), it was established to make seed-stage investments in startups developed at Harvard and MIT,[6][5][7] although the fund has been open to all founders regardless of university affiliation from the start.[8] In 2014 the fund formally renamed itself Xfund (an abbreviation of "Experiment Fund"), and raised $100 million in a second fund, Xfund 2.[6][5][7] A third fund in 2020 raised $120 million.[9][10] The first investor in most of its portfolio companies,[10] Xfund's partners have invested companies such as 23andMe, Kensho,[4][5] Gusto, Plaid, Robinhood, Patreon, Andela,[11][12] and Philo.[13]
 | |
| Formation | January 27, 2012 in Cambridge, Massachusetts as The Experiment Fund |
|---|---|
| Founders | Patrick Chung, Hugo Van Vuuren[1][2] |
| Type | Private |
| Headquarters | Cambridge, Massachusetts and Palo Alto, California, United States |
| Services | Early stage venture capital |
| Fields | Consumer technology Enterprise technology Healthcare |
Key people | Patrick Chung Brandon Farwell |
| Website | xfund |
History
editFounding (2012-2014)
editThe Experiment Fund was launched in January 2012 as a $10 million seed fund and incubator designed specifically to support student start-ups and develop technologies and platforms created in Cambridge, Massachusetts.[6] Although anchored at Harvard's School of Engineering and Applied Sciences,[6][5][7] the fund was made open to all founders regardless of university affiliation from the start.[8] It was initially run with Patrick Chung representing New Enterprise Associates (NEA)'s interests and Hugo Van Vuuren as the fund's "on the ground" person in Cambridge.[7][13] Early advisors included Harvard faculty members David Edwards,[14] Harry Lewis, Cherry Murray,[15] and John Palfrey, in addition to Facebook co-founder Andrew McCollum,[16] Jim Breyer, and NEA's Harry Weller.[15] To avoid potential conflicts of interest, Harvard had no financial stake in the Experiment Fund.[6][8]
In June 2012, Accel Partners, Breyer Capital, and Polaris Venture Partners joined NEA as investors.[16] Experiment Fund identified around 3500 investment opportunities in its first two years.[17] Of that number, it evaluated 900 companies and invested in five,[18] including Philo, Zumper,[13] Kensho, and Ravel Law.[1] The average markup of the portfolio from seed valuation to valuation in May 2014 was over 10x.[18] Approximately 40% of the deal-flow in the original fund came from companies launched by Harvard students, faculty and staff,[19] while 25% came from MIT-affiliated entrepreneurs and 9% from Stanford University.[17][13][16] In May 2014, Patrick Chung joined The Experiment Fund full-time.[20]
Recent history (2014-2021)
editIn December 2014, the fund raised $100 million in capital commitments for a second fund, which was officially renamed Xfund.[20][21][22] Among Xfund's limited partners were Goldman Sachs, Saudi Aramco, Jasper Ridge and Breyer Capital.[5] Still based at Harvard,[22] by 2015, the company had considered 3,500 investments[17] and made 10.[4] In January 2016, Van Vuuren contacted Xfund's Limited Partners Advisory Committee (LPAC) and accused Chung of mismanagement in the firing of an employee. Separately, Chung contacted the LPAC requesting intervention and raised questions about Van Vuuren's stability. In March 2016, the LPAC voted to keep Chung in charge as managing partner and remove Van Vuuren entirely from the fund's affairs.[7] Van Vuuren sued Xfund and Chung in May 2016,[23] alleging fraud, breach of fiduciary duty, defamation, and a violation of California's two-party consent law.[7][24][25] The case was privately settled in February 2017.[7][2] Brandon Farwell, formerly of DFJ and RV, subsequently joined Xfund as a partner in 2017.[2] With all original investors remaining involved,[7] Chung and Farwell invested in companies such as Zumper,[13] 23andMe, and Landit, among others.[4][5]
In 2020, Xfund announced its third fund, Xfund 3.[9][10] Originally intending to raise $100 million,[10] it was oversubscribed and accepted $120 million in commitments, with the fund led by NEA and Breyer Capital.[10][26] At the time, in contrast to venture funding at large where 3% of funding goes to female-led companies, by September 2020, "one-third of Xfund’s capital [was] invested in companies with women founder/CEOs, and 72 percent of the firm’s capital backs companies led by women, minorities, or immigrants."[10] Also, startups from Harvard comprised "about 25 percent of Xfund’s investments, with 20 percent coming from MIT, 10 percent from Stanford and another 7 percent from University of California, Berkeley.[27] As the first investor in most of its portfolio companies, by 2020 the company had also invested in Curebase, Natalist, AeroVect,[10] Segment, Guideline,[11][12] NewtonX,[7] and Lighthouse.[28]
See also
editReferences
edit- ^ a b Shu, Catherine (4 December 2014), Harvard-based Xfund Closes A $100M Second Fund, TechCrunch, retrieved 25 February 2021
- ^ a b c Primack, Dan (October 6, 2017). "The return of Xfund". Axios. Retrieved 3 December 2017.
- ^ "Xfund Contact". Retrieved December 6, 2017.
- ^ a b c d Anders, George (September 28, 2015). "These VCs Bet $100 Million On Ideas With A Liberal Arts Twist". Forbes. Retrieved 3 December 2017.
- ^ a b c d e f g h Benner, Katie (May 6, 2016). "Infighting Threatens to Fell a Venture Capital Firm". New York Times. Retrieved 21 November 2017.
- ^ a b c d e f Farrell, Michael B. (September 9, 2013). "Harvard makes space for venture capitalist". The Boston Globe. Retrieved 20 November 2017.
- ^ a b c d e f g h i j Hempel, Jessi (November 8, 2017). "The Inside Story of Venture Capital's Messiest Breakup". Wired. Retrieved 21 November 2017.
- ^ a b c "Early-stage venture fund launches". Harvard Gazette. January 27, 2012. Retrieved 21 November 2017.
- ^ a b Guo, Elizabeth (4 September 2020), Aiming to Spawn 'the Next Gates or Zuckerberg,' Harvard-Connected Venture Capital Firm Xfund Closes Latest Fund, United States: The Crimson, retrieved 21 February 2021
- ^ a b c d e f g Karoff, Paul (3 September 2020), Xfund celebrates launch of new fund, Harvard SEAS, retrieved 21 February 2021
- ^ a b Portfolio, XFund, retrieved 25 February 2021
- ^ a b Founder Series: Launching a Startup and Raising Capital during the Pandemic with Xfund, XFund, retrieved 25 February 2021
- ^ a b c d e Wu, Victor C. (April 25, 2013). "Partners Reflect on Experiment Fund's First Year". Harvard Crimson. Retrieved 20 November 2017.
- ^ Burstein, David D. (27 March 2012), The Xfund, Harvard, And The Student-Entrepreneur, Fast Company, retrieved 25 February 2021
- ^ a b Xfund Closes $100 Million Second Fund, Xfund, 4 December 2014, retrieved 25 February 2021
- ^ a b c "The Experiment Fund welcomes Accel, Polaris, and new advisers". harvard.edu. Harvard John A. Paulson School of Engineering and Applied Sciences. June 26, 2012. Retrieved 29 November 2017.
- ^ a b c Landry, Lauren (December 4, 2014). "Harvard-Based Xfund Closes $100M Second Fund". American Innovation. Retrieved 21 November 2017.
- ^ a b Boslet, Mark (May 28, 2014). "Experiment Fund looks ahead". PE Hub. Retrieved 29 November 2017.
- ^ Primack, Dan (3 September 2020), Xfund raises $120 million for third fund, Axios, retrieved 25 February 2021
- ^ a b Primack, Dan (May 28, 2014). "Exclusive: NEA's Patrick Chung to join Xfund fulltime". Fortune. Retrieved 30 November 2017.
- ^ Primack, Dan (December 4, 2014). "Harvard-affiliated VC fund raises $100 million". Fortune. Retrieved 21 November 2017.
- ^ a b Chapman, Lizette (December 4, 2014). "Xfund Closes $100 Million Second Fund, Targets Student Entrepreneurs". Wall Street Journal. Retrieved 29 November 2017.
- ^ "Dispute at Xfund", The New York Times, New York City, 17 May 2016, retrieved 25 February 2021
- ^ Geron, Tomio (May 16, 2016). "Lawsuit Escalates Xfund Conflict". Wall Street Journal. Retrieved 1 December 2017.
- ^ "New Lawsuit against Patrick Chung, David York, and hijacking of Harvard". scribd.com. Superior Court of the State of California (via scribd). Retrieved 3 December 2017.
- ^ Tezuka, Maera (3 September 2020), XFund pulls in $120M for 3rd fund, S&P Global, retrieved 21 February 2021
- ^ Steiner, Christopher (5 October 2015), Big Investors on Campus: Why VCs are scouting student startups, Reuters, retrieved 25 February 2021
- ^ Jean Lee, Denise Hui (12 October 2020), Stanford students launch Lighthouse app to kickstart spontaneous connection, Stanford Daily