An opportunity encounter with one among enterprise capital’s prime figures helped propel 11.2 Capital founder Shelley Zhuang right into a profession a startup investing profession.
A pc science PhD from the College of California, Berkeley, Zhuang grew up with a father who was a professor in the identical area; academia was a logical profession route. However attending courses on the Haas College of Enterprise, she was moved by a chat given by Midas Checklist billionaire Doug Leone of Sequoia. “I simply went as much as him afterwards and stated, how do I get into this VC factor?” remembers Zhuang. “And he principally stated, ‘apply to as many positions as attainable.’ So yeah, I did that.”
20 years later, Zhuang leads one of many extra attention-grabbing VC companies you’ve doubtless by no means heard about: 11.2 Capital. Named after the escape velocity wanted to go away Earth’s gravity (11.2 kilometers per second), 11.2 Capital focuses on investments in “deep tech,” which means biotech, healthcare, area and different research-intensive areas. Based in 2013, 11.2 Capital closed a previously-unannounced $101,010,101 second fund earlier this yr.
“I needed to start out a fund actually targeted on the expertise, on actually technical founders,” Zhuang says. “On the time, there have been only a few seed funds targeted on deep tech.” Information of 11.2 Capital’s new fund was first reported over the weekend within the Forbes Midas Contact publication.
Right now, 11.2 Capital manages about $150 million in capital, with standouts from a portfolio of 40-plus corporations together with standouts akin to self-driving automobile service Cruise Automation, which was acquired for greater than $1 billion; biotech enterprise Ginkgo Bioworks, which went public and carries a market cap north of $25 billion; and digital clinic Hinge Well being, which reached a $6 billion valuation final week, giving the agency at the very least 5 unicorns.
However rising the agency hasn’t confirmed simple for Zhuang, who landed an analyst function at DFJ (now Threshold Ventures) in 2005 following Leone’s recommendation, then helped arrange its Shanghai workplace earlier than spending about two years as a enterprise growth chief for a DFJ portfolio firm in renewable plastics, Ecoplast. It took Zhuang 5 completely different closes to lift 11.2’s first $50 million fund, which means that its early checks into winners like Cruise and Ginkgo have been comparatively small. And when Zhuang got down to increase a second fund, she came upon that institutional LPs like household places of work and fund-of-funds had completely different expectations. One: they anticipated rising fund managers to play the connection sport over time. “I want speaking to them is one thing I did earlier, however I used to be very targeted on doing investments,” Zhuang says.
Fundraising paused in 2020 throughout the pandemic. However after lidar firm Aeva and fraud detection service Forter raised unicorn rounds, 11.2 Capital picked up extra steam earlier this yr, ending up with gives for extra capital than Zhuang wanted. Her agency has made 11 investments from Fund II to this point, together with hybrid vertical take-off and touchdown automobile maker Craft Aero, battery maker Sepion and cyber asset supervisor JupiterOne.
Whereas numerous traders now invoice themselves as deep tech specialists, 11.2 Capital hopes it might proceed to establish alternatives, and supply technical help, in methods others can’t. Its three principals – Jacob Smith, Pramod Gosavi and David Dorsey – all have technical backgrounds. And the agency conducts its personal thorough diligence, Zhuang says, even when it isn’t main a spherical, regardless of an investing local weather that places strain on such processes as in-demand entrepreneurs can anticipate fast checks.
Zhuang tells the story of an organization at Y Combinator’s Demo Day a number of years in the past that was elevating a spherical. Zhuang wasn’t positive about it, and requested a number of the different dedicated traders how its staff had solutions questions on sure issues. “They have been all like, if you would like extra element, discuss to this different investor who did extra diligence,” says Zhuang. “That’s not one thing I’m snug doing. It’s our job, I imagine, to unravel this stuff independently.”
One space the place 11.2 Capital wants to adapt extra to the occasions: advertising. Having an workplace is now not vital – Zhuang moved to Las Vegas throughout the pandemic out of non-public alternative – however entrepreneurs have to see you on-line, even in deep tech. “It’s in all probability an space we have to rent somebody,” the agency’s founder admits. “I’m a geek. All of us on the staff, we simply aren’t entrepreneurs by nature.”