Cove Fund, a seed-stage venture capital firm that invests in the rapidly growing Southern California startup economy, announced the launch of its third fund, Cove Fund III. The fund has completed its initial closing and will make its first investments in the coming months. It is expected to exceed $30M in capital, more than twice the size of Cove Fund II.
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Cove Fund is led by a team of three experienced investors and technology executives. Fund Managers Mike Benvenuti and Paul Voois have been with Cove Fund since its inception, and J.C. Ruffalo recently joined as Venture Partner. The Fund uses a unique member engagement model in which the fund’s members (investors), most of whom are businesspeople and entrepreneurs themselves, play an active role in deal flow sourcing, due diligence, mentoring and governance of portfolio companies. This model provides the fund with a strong and diverse mix of expertise and network connections, enabling the fund to invest and engage with its portfolio companies across a broad range of industry sectors.
Cove Fund launched in 2015 with its $6M Fund I, followed in 2018 by its $14M Fund II. Cove Fund has invested in more than 40 Southern California startups including notables such as Carlsmed, maker of custom spinal implants that improve surgical outcomes, who recently raised a $10M Series A round led by US Venture Partners; Giga IO, creator of next-generation data center rack-scale architecture for artificial intelligence and high-performance computing solutions, who recently raised a $15M Series B round; and GoSite, developer of cloud-based software designed to help small businesses engage with customers online, who recently raised a $40M Series B round.
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Cove Fund invests in early-stage technology and life science companies that demonstrate the potential to address large markets with highly differentiated products and services. The fund typically leads financing rounds in the $1-5M range and has a strong syndication network consisting of angel investors, family offices and venture capital funds that co-invest in its deals, leading to a strong “multiplier effect” on the Fund’s capital. For example, Cove Fund II has syndicated over $150M of investments into its portfolio companies to date.
“On behalf of Cove Fund and our partners, we are thrilled to launch Cove Fund III,” said Mike Benvenuti, fund co-manager. “The support that we’ve received from the local community has exceeded all our expectations, and we are excited to start investing in the next generation of great technology companies throughout Southern California.”