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VC firm Slauson & Co. has closed a $100 million Fund II, a big step up from its initial $75 million fund.
“We invest in everybody,” Ajay Relan, partner at Slauson & Co., told TechCrunch, adding that the firm wants to make sure all perspectives are included in its products and services. Companies in its first portfolio include the e-commerce platform The Folklore Group and the food logistics company Prado. “We’re investing in a way that’s a bit more representative of the shifting demographics in this country.”
Much has changed since Slauson & Co. partners Relan and Austin Clements launched their venture fund in 2020.
At the time, the duo wanted one thing: to back early-stage founders, focused on SaaS and consumer tech. There was no Ivy League or Silicon Valley resume focus: founders could be anyone. Many came from underrepresented backgrounds. The firm ended up closing a $75 million Fund I (more than its target of $50 million, with investors including Ron Conway) and backed 38 companies, most of which are helmed by people of color and at least half of which are led by women.
Fast-forward to today, Slauson & Co. remains even more committed to the mission of inclusivity in its funding, and it seems limited partners have its back.
Clements and Relan said they spent nearly a year raising the second fund, given venture’s economic dip and the harder sell these days for funds focused on social good (or anything other than AI). They met with hundreds of investors and landed around 40. In fact, Fund II actually has fewer limited partners than Fund I, despite the higher amount. Relan said the biggest shifts have been with corporate initiatives, which accounted for around a third of the firm’s Fund I, but have fallen out of favor in 2024.
“As the tides have shifted, in some ways we anticipated the pendulum might swing back in the other direction,” Clements said, referring to the current climate of less support for backing founders from underrepresented backgrounds.
Obviously, the key was proving the performance of the firm’s thesis, so that limited partners want to back them regardless of the social climate. “What we really wanted was just for people to look at us for the merits of what we can achieve and the opportunity that we’re going after,” Clements continued. “That seemed to resonate with folks.”
Standouts from Slauson & Co.’s portfolio include The Folklore Group, which recently announced the close of a $3.4 million seed round, and Pressed Roots, which announced a $3.1 million seed from investors earlier this year.
On a brighter note, more institutional investors backed Slauson and Co. this round, which the duo is excited about. While corporate initiatives accounted for less than 1% of Fund II, many of the fund’s other original investors returned. Relan said that Fund I hit all the targets they said it would. “We achieved the target ownership we were going after. We invested at the pace of deployment we said that we would,” he continued. “We stuck to our guns and wanted to be very disciplined. And I think that’s paid off with LPs.”
Fund II will write checks between $500,000 and $2 million, hoping to lead most rounds. It will make 30 investments out of this fund throughout the next three years, with capital reserved for follow-up rounds. It has already started investing out of Fund II.
Clements and Relan have always said that they are looking within the ocean of overlooked opportunities for the next founders to reel in. Since founding their VC firm, they’ve launched an accelerator program, hosted summer camps for portfolio companies and built a network of operators and investors to support their founders.
“We like to say there is a Slauson Avenue in every major city across the country and we want to build a brand and firm that represents those types of communities,” Relan said. And, if they do their jobs right, “hopefully folks with way deeper pockets than ours, who may not necessarily care about the same things that we care about, see an economic opportunity and start fishing in the same ocean.”
