VC firm Accomplice raises its last-ever fund

Venture capital firm Accomplice has quietly raised $405 million for what it says will be its “last fund, best fund.”

Why it matters: VC shops sometimes ride off into the sunset, usually due to fundraising troubles or partnership acrimony. This, however, is the first time I can recall LPs being asked to commit to a final act.

Backstory: Boston-based Accomplice traces its history to Atlas Ventures, a firm founded in 1980 that at one point had offices in multiple cities and multiples countries. It later downsized, in part thanks to younger partners succeeding in something of a management coup, and eventually its tech and life sciences investing teams split up. The latter retained the Atlas moniker, while the tech group in 2015 rebranded as Accomplice after a crowdsourced contest.

• Accomplice became known around Boston for its philanthropic and tech community building efforts, plus for raising three funds and early investments in companies like AngelList, Carbon Black, DraftKings, PillPack and Veracode. It also shed some partners along the way.
• In 2018 the firm launched a blockchain investing effort and created Spearhead, in partnership with AngelList co-founder Naval Ravikant, to help entrepreneurs become angel investors and form their own funds.

Fast forward: Accomplice co-founder Jeff Fagnan realized he had become more interested in Spearhead than in traditional direct investing, so last year began plotting out what he hopes will become a sort of modern family office.

• That included raising this last fund, of which around half whose deals are expected to be sourced via Spearhead leads.
• Accomplice also quietly hired Chris Yang, who previously spent more than 20 years as a managing partner with Accomplice limited partner Grove Street. Firm co-founder Ryan Moore is expected to work with Yang on the family office, once the new fund is deployed.

The argument against investing in a “last fund” would be that it removes the incentive of working hard to ensure the next fundraise, although Accomplice LPs believe that’s mitigated in this case by the partners’ past success (i.e., they’re already rich).

The argument for investing in a “last fund” is that there is no next fund incentive, thus the partners are less likely to do unnatural things to boost IRR (particularly in an increasingly fraught market).

The bottom line: This is the industry’s first last, but may not be its last last.