NextGen Venture Partners raises $22 million first fund

Continuing its transition from network of angel investors to more traditional VC firm, NextGen Venture Partners has raised a $22 million fund. The fund is being billed as the firm’s “first” — if you don’t count that $1 million it raised for expansion in 2015.

But NextGen isn’t giving up on its network of angels. Rather, the firm hopes to blend the two. As the Washington Business Journal reported, “the venture firm plans to tap its existing angel network to invest in potential deals alongside it. Each time NextGen will create a special-purpose LLC that combines the venture fund money (from 82 limited partners) and the investments from its more than 650 angel network members.”

It’s an interesting model.

“We found something we think no one else has found. To be able to fill those holes in the market where we are giving these investors the chance to invest together and create an opportunity to interact with each other,” Managing Partner Brett Gibson told WBJ.

In an interview with TechCrunch NextGen’s Jon Bassett said “a large number” of the LPs from which that $22 million was raised are also partners (network members) at the firm — generally young founders and executives like Susan Tynan, founder of Framebridge or Ajay Kori, cofounder of UrbanStems.

“We plan to raise larger dedicated funds over time with bigger check writers, but it’s important we maintain what makes our model so unique,” Bassett told TechCrunch. “Our strength in deal flow and portfolio support comes from our venture partners. Also, we [do and will] continue to create SPVs where our venture partners have the opportunity to invest alongside our funds.”