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Exclusive: Former Venmo COO raises $20M for Vera Equity

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Illustration: Eniola Odetunde/Axios

Vera Equity, a venture capital firm co-founded by former Venmo COO Michael Vaughan and executives from True Search, raised $20 million for its first fund, the firm tells Axios exclusively.

Why it matters: The fintech-focused, early-stage investor is spinning up at a time when first-time funds are struggling to raise. Debut fundraising plunged 52.3% last year to $10.6 billion, per Pitchbook data.

Details: Vaughan founded the firm alongside True Search’s Co-Head of Financial Services, Jonathan Pomeranz; and True Search co-CEOs Joe Riggione and Brad Stadler.

  • The fund, which writes checks of around $500,000 to pre-seed to seed stage companies, has already invested in 20 businesses, including StellarFi and Tandym. It has roughly half of the fund left to deploy.
  • True Search, an executive talent firm, is the fund’s anchor investor.
  • The team has a preference for more experienced entrepreneurs and tends toward B2B businesses.

The big picture: Vera believes it has an edge spotting winning potential founders due to its executive network ties from True Search.

  • “It’s our job to know who's thinking about what they want to do next,” says Pomeranz, pointing to the firm’s investment in Tandym as an example. Founder Jennifer Glaspie-Lundstrom was weighing leaving Capital One to found her business. True was the first check.
  • True then pitches founders on its ability to help build young businesses: The True Search side of the partnership helps with recruitment. Vaughan’s experience at Venmo would bring operational know-how.

Zoom in: This all comes as early-stage fintech dealmaking has begun to show signs of slowing. The median deal size fell 17% to $2.5 million in the first four months of 2023, per CB Insights.

  • “Founders can't raise as much capital as they used to be able to,” says True Search's Pomeranz. “The bar is a lot higher. The result of that is founders with much higher conviction and commitment to doing it.”
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