Ask HN: Are there VC funds that focus on profitability with minimal rounds?

7 points by petrusnonius 2 days ago

I’m exploring venture capital funds that prioritise sustainability and profitability over continuous fundraising. Specifically, I’m interested in funds that provide an initial round of capital, aiming for the business to achieve profitability—an approach sometimes referred to as "seedstrapping". Ideally, these funds would be open to B2C investments in Europe.

I’ve identified a few such funds:

• OpenSky Ventures: An early-stage VC firm investing in category-disrupting companies, led by experienced entrepreneurs with a track record of successful exits.[0]

• D2 Fund: Focuses on funding capital-efficient B2B software businesses in the UK and Europe, emphasizing efficient entrepreneurship and mission-critical products.[1]

• TinySeed: A remote accelerator designed for early-stage SaaS companies, offering funding and mentorship to help founders grow sustainably without the pressure of traditional VC expectations.[2]

• Indie.vc: Known for its unconventional approach, funding startups with a focus on profitability and sustainability.[3]

For context, Anu Atluru’s essay, “One-Round Wonder”[4], explores the concept of startups achieving success with a single funding round.

Are there other funds or investment models that align with this “seedstrapping” philosophy? Insights or experiences with such funds would be greatly appreciated.

[0]opensky.vc

[1]https://www.d2.fund/

[2]tinyseed.com

[3]businessofbusiness.com

[4]https://www.workingtheorys.com/p/one-round-wonder

brudgers 2 days ago

To me, this sounds like ordinary investing based on typical cash on cash returns (e.g. dividends). This is most investment and often local — the sort of thing a town’s entrepreneurs put up money for — or a place for institutional investors (e.g, insurance companies placing reserves).

Venture capital is not that. It seeks returns from increases in the value of equity. The strategy is that all revenue stays in the company and the company uses that money for growth.

That’s why there is not a lot of VC investment relative to investing by doctors and bankers anywhere and particularly in Europe where a larger percentage of capital exists as family/hereditary wealth and consequently is managed more for wealth preservation rather than home runs.