As two venture capitalists spin out from their former firm to go it alone, they are banking on a community of Fortune 500 CEOs to help them stand out.
Sunny Dhillon, who wrote an early check into self-driving electric taxi company Cruise, and Linus Liang, cofounder of infant incubator startup Embrace, have spun out from their former firm to close a $120 million fund from investors including Alphabet Chairman John Hennessy, former Walt Disney Company CEO Michael Eisner, Bain Consulting’s global managing partner Manny Maceda and former president of the DreamWorks Feature Animation Group Chris DeFaria, and others. Airbnb’s Joe Gebbia and Zynga’s Mark Pincus also invested, according to the fund.
“So many VCs are just not helpful,” Dhillon says, noting that he and Liang have found from personal experience that angel investors and advisors who open “up doors to [a] customer contract when you're too small for anyone to take notice of you” is what makes a big difference for a startup. They hope to levy relationships they have built with their limited partners to give their founders an edge.
“Getting a real answer from corporate customers is usually something you can get when you have a relationship inside of your organization—versus just on the periphery,” Dhillon says.
The two venture capitalists are calling their new firm Kyber Knight Capital and approximately 85% of their capital is coming from new limited partners, though there has been some overlap with their former firm, Signia Venture Partners, whose founders, they say, have since retired from making new investments and determined not to raise a new fund.
Dhillon and Liang, who have previously made investments in companies like Tenor Labs, Phoenix Labs, and Skale Networks, fundraised for about a year for their first fund and noted how it was challenging to fundraise during the current private market downturn.
“I think we have some time to go before you start seeing LPs’ appetite come back to anything that it was in the last couple of years,” Dhillon says.
Since they started raising capital for Kyber Knight, the duo has backed approximately 10 companies, including A.I.-based email assistant startup Lavender and Web3 soccer game studio Matchday. The other startups they’ve backed thus far are still operating in stealth, they said, declining to name them. They expect to invest in companies focused on e-commerce, gaming, media, entertainment, and A.I. and have been writing checks ranging between $250,000 to $2.5 million.
