In 2023, founders searching for venture capital found fewer investors and less money. Pitchbook reports that the number of U.S. deals in the first three quarters of 2023 was just slightly higher than the number made during the same period in 2018.
In North Texas, it was a similar story. But even as investment markets have tightened, Dallas-based Beyond Capital is working to reverse that trend by investing in more startups. In the first quarter of 2024, it’s opening its third fund to new investors.
Beyond Capital looks for startups in need of Seed to Series A investment. What piques their interest remains the same: “We look for disruptive innovation, with a potential 10x return, and we want to exit in three to five years,” said firm Co-Founder and Managing Partner Scott Wilson. They also look for products or services with great IP protection, and a strong team.
Wilson and Managing Partner Sarah Jennings launched Beyond Capital’s first fund at the end of 2020 and started investing in 2021. They didn’t plan on another capital raise in the near term, the partners say. But investor feedback revealed an opportunity.
“We sort of said, ‘Okay we’ll launch one, and see how it goes,’” said Jennings, who co-founded the firm with Wilson.
Though the initial plan was to launch a new fund every three to four years, they found that their deal flow had investors coming to them saying: we want in. So, after launching their second fund at the end of 2022, they changed their strategy. Now Beyond Capital Funds has vintage or annual opportunities; each investment period is about 12- to 18 months.
Market conditions and focus areas have an impact on fund raises, and vintage funds offer more flexibility because of their shorter cycle.
“We can focus on what makes the most sense and what are the most advantageous opportunities right now, as opposed to trying to look three or four years into the future,” said Jennings.
With the first two funds, part of the calculus for investment was a faith-based founder. While they’ll continue to support such startups, faith won’t be used as a criterion to rule founders out.
“We really want to support people that are aligned with us in terms of using technology in an innovative way to put more good into the world,” and that shows up in different ways.
DFW is represented in the portfolio through both SALT, which aims to digitally transform the insurance industry, and Predictive Fitness, which turns data into insights to improve health and fitness.
In August, Predictive Fitness announced that athlete Meb Keflezighi partnered with its AI training app RunDot.
Other ideas the firm has invested in include using patented technology to make lithium batteries safer (Soteria) and improving language translation and accessibility with artificial intelligence (Avodah).
Startups in Austin and Houston, as well as cities on the East and West Coasts, are also in the Beyond Capital portfolio, and for the right fit, Jennings and Wilson would add internationally headquartered companies, too.
Voices contributor Nicole Ward is a data journalist for the Dallas Regional Chamber.
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