Brian Singerman’s New Fund Offers a Unique Approach with Strong Backing from Peter Thiel

Brian Singerman, a prior GP at Founders Fund, along with Lee Linden, co-founder and managing partner of Quiet Capital, is seeking to raise over $500 million for a new fund called GPx, as reported by three sources close to the matter who shared insights with TechCrunch. It’s anticipated that a significant portion of GPx’s capital, potentially up to 50%, will be sourced from Peter Thiel, co-founder of Founders Fund.

GPx utilizes a dual investment strategy. About 20% of the capital will be directed towards funds operated by emerging VCs focusing on pre-seed and seed-stage startups, while the remainder will concentrate on partnering with emerging managers for leading later-stage investments, mainly at Series B, in their standout companies.

This methodology starkly contrasts with the conventional practices of most venture firms. Whereas traditional VC firms generally invest all their resources directly into startups, GPx combines elements of a fund-of-funds model. This less common strategy involves allocating some capital into a variety of other funds instead of directly investing in underlying assets such as startups. Although a fund-of-funds allows limited partners to efficiently access less-known or hard-to-reach firms, a notable drawback is the layered fee structure: fees from both the fund-of-funds and the underlying managers.

Even though funding for fund-of-funds firms plummeted to a 16-year low last year, as indicated by PitchBook, Singerman and Linden remain hopeful that their personal reputations, unique networks, and a strategy that is only partially a fund-of-funds will entice limited partners to invest in GPx.

Singerman and Linden may be onto something promising. As venture capital becomes increasingly concentrated among larger funds, many top investors in these firms are losing interest in being part of a large entity. They are moving away from major firms to establish their own investment operations, allowing for increased agility and specialization.

GPx aims to leverage the trend where the upcoming generation of VC investors identifies and supports various promising early-stage companies, enabling Singerman and Linden’s firm to co-lead later-stage investments in the most successful portfolio companies nurtured by emerging managers.

The significance of GPx’s strategy can be found here: early-stage VCs typically strive to utilize pro-rata rights in follow-up funding rounds (Series A, B, etc.), but their fund sizes often limit their ability to maintain ownership stakes in high-performing companies. When faced with such situations, smaller VCs often seek to raise funds through special purpose vehicles (SPVs) from their existing limited partners. However, these efforts are frequently time-consuming, allowing other investors to snatch up coveted equity positions in highly sought-after deals.

With GPx’s support, emerging funds will not only be able to exercise their pro-rata rights but also take on a leading role in later-stage rounds.

The Information previously reported on Singerman and Linden’s establishment of GPx but did not disclose details regarding the fund’s target size and specific strategy.

Singerman and Linden did not respond to a request for comment.