A pair of VCs who invested in Nest and The Honest Company explain why they raised a $262 million fund to invest in young startups


Defy Ventures announced today its second fund, with $262 million committed to invest in early stage companies.

As larger, late rounds become more common in the world of tech investing — especially with the advent of the mega-sized SoftBank Vision Fund — Defy Ventures aims to retain larger stakes in early-stage startups, investing between $3 million and $10 million in each startup it works with.

Firm cofounders and industry veterans Neil Sequeira and Trae Vassallo are looking to capitalize on their successful first fund, which also focused on early stage investments, with the new influx of capital from new and existing limited partners.

“When we first got together, we saw that there was, at the time, a proliferation of seed capital. For multifaceted reasons, it was easier for companies to raise seed or later stage capital,” said Sequeira. “We saw there was an opening to go for where the returns have always been great, and that’s in early Series A growth companies.”

The reason for focusing on Series A companies, the partners say: It’s less risky than investing in seed-stage startups, because they’ve at least started rolling out an actual product or service, even if all the particulars aren’t quite