Interstate Fusion Ventures (Fund II) Year End 2023

May 12, 2024 | Newsletter

Our View of the Markets

2023 was a challenging year with startup shutdowns continuing and down rounds on the rise. Capital raised by US startups fell sharply, and there is now a significant shift of time and attention to bridge rounds. 

However, there are several positive indicators, and seed rounds (the focus of our fund) were the least impacted. While early-stage investing is down from 2021, it’s back above 2019 levels, valuations have not fallen alongside, and secondary investment activity began picking up, in the later part of the year.

So, what does that mean for IFV?

There are already 5 investments with a 6th on the way and several in the pipeline.  All are on good trajectories, and we anticipate additional portfolio mark ups soon. We are currently looking to close our 2nd round and will make additional investments, based on our success. Certain sectors fared better than others, and our portfolio had no exposure to the hardest hit, such as blockchain/crypto and security. Also, the coasts are still the home of startup activity, with 6 of the 7 top cities and Ohio was one state who saw a significant rise in fundraising. This further validates our investment model and is a positive sign supporting further success.  

We are extremely confident in the prospects for Fund II.  In addition, to having a strong existing portfolio, there seems to be tailwinds developing in support of funds like ours. Historically period following global crisis can be good times for investing  and smaller funds tend to outperform large ones in challenging economic conditions. — what is this supposed to say here. In addition, many early stage companies are actually stronger than before with a shift to focusing on achieving profitability as opposed to simply targeting the next fundraising round. Having access to very investor friendly bridge rounds and other developments, such as lower valuations make it even more attractive to invest in Fund II now. Here are some highlights.

Fund 2 Investments

Top Fund Updates

We are beyond excited and extremely honored to be part of the latest Coolwater Cohort. This is a massive opportunity to improve our processes and expand our network. The six-week program concludes with a Bay area conference for us to pitch their institutional and family office investor base. This helps launch us to another level and will benefit all involved. 

Coolwater is an investor in VC funds and runs an accelerator for emerging VC fund managers. They have built an investment community of 300+ founder VCs with over 5,000 technology companies and collectively raised over $2B. Coolwater Capital is the “Y Combinator for emerging VCs”. They are recognized as the highest-rated accelerator for fund managers and are backed by over two dozen early-stage VC investors, active VC LPs, and tech industry executives. 

Team Update

We are excited to announce the addition of Elad Granot to our advisory team. Elad is an experienced venture capitalist and an integral part of the NE Ohio startup ecosystem. His resume speaks for itself. He’s also pioneering a 3-course venture capital program through the Boler School of Business at John Carroll that will not only include “hands-on” learning but a student-allocated investment fund. Welcome aboard, Elad!

Welcome our new Intern Andi Sun

Andi Sun is a Sophomore at Case Western Reserve University studying Finance & Computer Science. He’s passionate about startups and hopes to be more deeply involved in venture capital. At Case, he’s involved the Student Venture Fund and Alpha Kappa Psi. Outside of school, he enjoys making music and playing soccer, and his favorite team is Manchester United.

Speaking of Interns…

We are proud to announce our Lead Due Diligence Interns, Will Brune and Regina Sosa Valdovinos, have both accepted amazing full time positions.

Will accepted a position as a Venture Analyst with Mutual Capital Partners!

Regina has taken her talents to Kansas City where she is a Capital Access Manager for the Economic Development Corporation of Kansas City!

We have loved having them as part of the IFV team and appreciate everything they’ve done for us over the last two years. We are glad to keep Will in Cleveland and are sure you will still see him around as he transitions to his new role.

Marketing Updates

We have been working diligently on expanding our marketing and social media usage. We would love it if you would like and share our posts when you see them.

In Closing

Hopefully, you found this informative, and we cannot thank you enough for being investors! As always, feel free to contact us with any questions or comments.

Share This