Former GV Investors Launch Character, a New $30 Million Venture Fund
- Former GV product design-focused partners launch a new early-stage venture fund called Character.
- The fund plans to use an investment strategy based on the “design sprint” process.
- Character has raised $30 million from LPs to back 15 to 25 startups over the next three years.
Former GV investors have raised $30 million for a new venture fund named Character, to invest in startups using a design-centric VC strategy.
Product designers turned investors John Zeratsky, Jake Knapp and VC Eli Blee-Goldman will co-lead the fund and plan to write checks between $500,000 and $1 million to startup founders, mostly at the seed stage, with 50% of the fund reserved for follow-on investments at later stages. Although the firm is based in Milwaukee, Wisconsin, it will invest in companies anywhere in the US.
Venture capital has become especially crowded at the early stage, with many firms like Greylock and Khosla Ventures launching supersized seed funds. Character hopes to stand out by using a design sprint concept the cofounders developed at GV and later divulged in a book.
“For me, it’s really about helping companies design new products, develop new products and create their go-to-market strategies, but in a truly customer-centric way where they’re not crafting some beautiful vision and working heads down in the garage for six months before they launch,” Zeratsky told Insider.
Character is most interested in working with startups betting on “big shifts in customer behavior,” in areas like healthcare, blockchain, fintech, and the creator economy, with an initial goal to back 15 to 25 startups over the next three years, Zeratsky said.
Phaidra
At GV, Zeratsky and Knapp used their product design skills to help companies like
Slack
, Blue Bottle, and Flatiron Health through hundreds of 5-day design sprints to work on core challenges, like how to launch an online store. Prior to GV, Zeratsky worked as a product designer at Google and YouTube. Knapp was also a designer at Google, in addition to Microsoft.
The cofounders’ unconventional path to the world of venture capital has led the team to think of design tools, like sketching and rapid prototyping, as a competitive advantage in early-stage investing.
“‘Value add can easily become ‘value destroy’ when you’re not working hand-in-hand with the team,” said Blee-Goldman, who was previously an investor at Capital Midwest Fund, a VC firm based in Mequon, Wisconsin.
So far, Character has made six core investments to date across different sectors ranging from an audio collaboration tool to Phaidra, an AI-powered industrial control system.
Katie Hoffman, a Phaidra cofounder, tells Insider the design sprint helped to accelerate three or four months of product progress into just five days and ultimately helped her startup de-risk their product by testing a prototype with real customers.
Character’s limited partners include founders and executives from Uber and Slack, as well as Wisconsin-based institutional LPs like Inception Health, the technology innovation fund backed by Froedtert & the Medical College of Wisconsin.
For Zeratsky, who spent 7 years in San Francisco, relocating back to his home state of Wisconsin and starting the fund in Milwaukee is an important milestone for the startup ecosystem in the Midwest.
“Venture capital is no longer a geocentric business and so I think that that’s actually created opportunities for startup founders here in Wisconsin to basically play on that national stage instead of having to be really locally focused,” he said.
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