How One Venture Capitalist Is Raising a $50M Fund Despite a Brutal Market

Entering the venture capital industry as a new manager has become exceptionally difficult. Data shows that established firms raising their fourth fund or later captured the vast majority of U.S. venture fundraising dollars in the first three quarters of a recent year. Meanwhile, first-time funds secured only a tiny fraction, putting the year on track for the worst performance for new managers in at least a decade.

Building a Firm in the Real Economy

Olaf Sakkers launched his firm, RedBlue Capital, in 2021 and closed its first fund with about $5 million. He has now held a first close on a second fund expected to reach at least $50 million. Sakkers previously co-managed another mobility-focused fund before striking out on his own to invest in the physical world, including robotics, logistics, manufacturing, and energy.

Convincing institutional investors, such as pension funds and endowments, proved challenging because his check sizes are small and these large outfits typically favor established brands to minimize risk. To counter this, RedBlue writes smaller checks ranging from $50,000 to $100,000, usually joining deals led by other investors rather than leading them. The firm aims to provide strong support by introducing startups to major lead investors and potential customers.

Relying on Data and Discipline

To operate efficiently with a small team, Sakkers uses custom technology, including a database built with artificial intelligence tools to log meetings, notes, and relationships. This setup allows the firm to work asynchronously and maintain strict investment discipline. Although physical-world startups often require long timelines to mature, Sakkers believes small funds can still achieve strong results by selling stakes on secondary markets when needed.