Inspired Capital recently raised $330 million for its third fund—here’s what worked

That all changed when Joyce realized she wasn’t alone. One day, she received a letter of intent from her college friends Alexa von Tobel and Lucy Deland, by then at Inspired Capital. That LOI helped her take the leap and start working full-time on what’s become Duckbill, an AI-powered personal assistant startup that has now raised $33 million. 

“I like to think I would have gone and done it at some point, but venture and AI is a game of bold leaps and speed…and I don’t know what would have happened if they hadn’t taken that step,” Joyce told Term Sheet. 

And that’s the crux of what makes early-stage investing—seed stage especially—unique. That early, one LOI can change the course of someone’s life, and one check can bring a company into existence that otherwise may have never seen the light of day. 

“I truly get out of bed every day energized because this is like one of the most exciting and rewarding places to focus,” said von Tobel. “It’s willing something into existence.”

It’s high-risk and high-reward. Surprisingly perhaps, it’s this segment of the market (seed stage in particular) that has been most resilient in terms of fundraising and valuations amid a VC downturn. And Inspired Capital, which in von Tobel’s words focuses on “napkin to Series A,” has done something that, in a tough fundraising environment, made me do a double-take—the firm raised a third fund at $330 million without knocking on new doors. Though the round included new investors, they were LPs that Inspired has built long-standing relationships with for some time.

The data suggests that Inspired has beaten the odds, according to Crunchbase News senior data editor Gené Teare. 

“In 2023, funds $300 million and below in the U.S. were down by around 35% by amount raised, whereas funds above $300 million were down by 64% year-over-year,” she told Term Sheet via email.

Here’s what we know for sure about early-stage investing right now: Though funding at every stage was down last year, seed was down comparatively less, after growing by nearly 10% in terms of dollars invested in 2022, according to Crunchbase data. Series A, in contrast, has been dicey. 

“For many startups that has meant staying in the seed pool for longer and raising multiple seed rounds in advance of a potential Series A funding,” said Teare. 

What this all amounts to seems to be that, despite early-stage investing’s fortitude, as Olivia Rodrigo would say, it’s brutal out there. This begs the question: What went right here for Inspired? Teamshares cofounder and CEO Michael Brown, who’s both an Inspired LP and has been backed by the firm, says it comes down in part to von Tobel and Deland’s experience as founders themselves—von Tobel founded LearnVest, while Deland cofounded Paperless Post. 

“This is something Vinod Khosla talks about, that unless you’ve built a venture-scaled business, you don’t have the right to give someone advice,” said Brown. 

Von Tobel and Inspired have also started articulating a perspective they call “An Inspired Future,” the idea that ”when there are huge societal issues, that’s the perfect place for entrepreneurs to show up,” von Tobel told Term Sheet. One institutional LP has found this clear vision compelling, along with von Tobel and Deland’s “founder DNA” and discipline in terms of fund size. 

Von Tobel is engaged with massive problems, and is planning to invest in areas like the crossroads of AI and healthcare and the industrial economy—but she’s fundamentally an optimist. She sees venture capital, at its best, as a powerful tool for driving innovation and positive societal change. And if you’re “irrationally ambitious,” she’s very possibly looking for you. 

“We are looking for the biggest-swinging entrepreneurs going after the hardest, most complex problems, and then we’re steady hands behind them so that they can actually go and make a big dent in those problems,” said von Tobel. 

See you tomorrow,

Allie Garfinkle
Twitter:@agarfinks
Email: alexandra.garfinkle@fortune.com
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Joe Abrams curated the deals section of today’s newsletter.

VENTURE DEALS

- Monzo, a London, U.K.-based digital bank, raised $430 million in funding. CapitalG led the round and were joined by GV (Google Ventures), HSG (HongShan Capital), and existing investors PassionCapital and Tencent.

- Sunfire, a Dresden, Germany-based producers of electrolyzers designed to produce renewable energy to replace fossil energy, raised €215 million ($233 million) in Series E funding from LGT PrivateBanking, GIC, Ahren Innovation Capital, Carbon Equity, Lightrock, Planet First Partners, and others. 

- Overjet, a Boston, Mass.-based developer of AI technology for dentists, raised $53.2 million in Series C funding. MarchCapital led the round and was joined by General Catalyst, Insight Partners, E14Fund, Crosslink Capital, and others.

- Sweet Security, a Tel Aviv, Israel-based cloud security platform, raised $33 million in Series A funding. Evolution Equity Partners led the round and was joined by Munich Re Ventures and Glilot Capital Partners.

- Multiverse Computing, a San Sebastián, Spain-based provider of quantum and quantum-inspired computing solutions, raised €25 million ($27.1 million) in funding. ColumbusVenture Partners led the round and was joined by QuantonationVentures and others. 

- Topsort, a San Francisco-based advertising platform that uses AI and machine learning instead of third-party cookies, raised $20 million in Series A funding from Upload Ventures, QuietCapital, and Pear Ventures.

- Limbic, a London, U.K.-based clinical mental health AI technology company, raised $14 million. Khosla Ventures led the round and was joined by others.

- Haiper, a London, U.K.-based video-generative AI platform, raised $13.8 million in seed funding. Octopus Ventures led the round and was joined by others.

- Metaplane, a Boston, Mass.-based data observability platform, raised $13.8 million in Series A funding. Felicis led the round and was joined by Khosla Ventures, Flybridge, Y Combinator, Stage 2 Capital, B37, and SNR.

- Utila, a Tel Aviv, Israel-based crypto operations platform, raised $11.5 million in seed funding from NFX, Wing VC, Framework Ventures, and angel investors. 

- HData, a Birmingham, Ala.-based developer of AI technology designed to help the U.S. energy industry file, explore, analyze, and leverage regulatory data, raised $10 million in Series A funding. BuoyantVentures led the round and was joined by Victorum Capital, Hyde Park Venture Partners, Firebrand Ventures, and others.   

- BRKZ, a Riyadh, Saudi Arabia-based material procurement company for construction projects, raised $8 million in Series A funding. 9900 and BECO Capital led the round and was joined by Wa’ed Ventures, Knollwood Investment Advisory, RZM Investment, and MISYVentures.

- TollBit, a Boston, Mass.-based marketplace designed for AI bots and data scapers to compensate websites for licensing their content, raised $7 million in funding. Sunflower Capital led the round and was joined by AIX, Lerer Hippeau, Operator Collective, and Liquid 2 Ventures.

- appCD, a San Francisco-based developer of technology designed to generate infrastructure from Code software automatically, raised $6 million in seed funding from Thomvest Ventures, Westwave Capital, FireBolt, and Secure Octane.

- Lettuce, a San Francisco-based automated tax and accounting system designed for solopreneurs, raised $6 million in seed funding. Zeev Ventures led the round and was joined by others. 

- Sahara, a Los Angeles, Calif.-based decentralized AI network, raised $6 million in seed funding. Polychain Capital led the round and was joined by SamsungNext, Matrix Partners, Motherson Group, dao5, Geekcartel, Canonical Crypto, Nomad Capital, and others.

- Louisa AI, a New York City-based AI-powered sales enablement and deal prompt platform, raised $5 million in seed funding from Palm Drive VC, Evolution VC, Nucleus VC, Gaingels, and others. 

PRIVATE EQUITY

- DataClean, a portfolio company of Angeles Equity Partners, acquired DP Guardian, a Littleton, Colo.-based provider of cleaning services for critical environments and installer of airflow containment systems for data centers. Financial terms were not disclosed.

- Leste Group acquired a minority stake in Prestige Cosmetics, a Rio de Janeiro, Brazil-based distributor of luxury perfumes and cosmetics. Financial terms were not disclosed.

- Mercer Global Advisors, backed by Oak Hill Capital,GenstarCapital, and AltasPartners, acquired MDK Private Wealth Management, a Seattle, Wash.-based wealth management firm. Financial terms were not disclosed. 

- Stengel Hill Architecture, backed by Godspeed Capital Partners, acquired Smith Consulting Architects, a San Diego, Calif.-based master planning, architecture design, and interior design firm. Financial terms were not disclosed. 

- TA Associates acquired a majority stake in AGA Benefit Solutions, a Québec, Canada-based developer and administrator of group insurance and retirement plans. Financial terms were not disclosed.

- TruArc Partners acquired MeyerLaboratory, a Kansas City, Mo.-based manufacturer and distributor of industrial and institutional cleaning chemicals and applications systems. Financial terms were not disclosed. 

EXITS

- Charlesbank Capital Partners acquired EverDriven, a Greenwood Village, Colo.-based provider of school transportation for students that are homeless, disabled, in foster care, or live too far from school, from Palladium Equity Partners. Financial terms were not disclosed. 

FUNDS + FUNDS OF FUNDS

- EQT, a Stockholm, Sweden.-based private equity firm, raised €3 billion ($3.3 billion) for its Future Fund focused on climate, nature, health, and wellbeing companies. 

- Spark Capital, a San Francisco, New York City, and Boston, Mass.-based venture capital firm, raised $2.3 billion across one early-stage and one venture-growth fund. 

- Team8, a New York City and Tel Aviv, Israel-based venture capital fund, raised $500 million across three funds focused on companies in cybersecurity, data & AI, fintech, and digital health.

- Silas Capital, a New York City-based growth equity and venture capital firm, raised $150 million for its second fund focused on consumer brands. 

PEOPLE

- HarbourVest Partners, a Boston, Mass.-based private equity firm, promoted Matthew Cheng, Lee Incandela, Eric Senay, Eric Simas, and Amy Unckless to managing directors. The firm also promoted Natasha Buckley. Brendan Butler, David Butts, Holland Davis, Michael Guiness, Yassin Knocke, Nick K. Winch, Sophia Maizel, Stephen Mullin, and Emily Ren to principals. The firm also promoted Jeff Brewer, James Miller, and Lyndy Stanway Marsh to senior vice presidents.

- Khosla Ventures, a Menlo Park, Calif.-based venture capital firm, hired Ethan Choi, Jai Sajnani, and AlexBentley as partners. Formerly, Choi was with Accel, Sajnani was with Flight Deck Capital, and Bentley was with Block.