It’s not too hard to connect the dots between the funds backing successful startups, but the funds behind the funds? They’re a bit harder to trace.
Sara Zulkosky is a DC-based renewable energy engineer turned investor, whose previous accolades include a stint at capital firms CNF Investments and Greenspring Associates and work as a scout for DC startups at Foundation Capital’s Young Entrepreneurs Program. Now, she’s the cofounder and managing partner of Recast Capital, a new venture platform trying to make a change in the VC world by following the money an extra step back.
Zulkosky and cofounder Courtney McCrea created Recast to invest in and support “emerging” managers in venture, with a focus on “diverse partnerships.” So, yes, it’s a fund that invests in other funds — but also, an education program, both targeting new fund managers.
By supporting these managers, Zulkosky said, she believes Recast can not only drive outsized returns, but also more diversity within the field itself. (The VC industry overall is, um, not very diverse.) The hope is that this can, in turn, increase overall access to funding for founders who lack a proven track record or connections that large VC funds often require, a practice that leaves many behind.
“Diversity matters — and interestingly, diversity within the emerging manager space, that field is large and is growing and you are in no way constraining your opportunity set by focusing on more diverse partnerships,” Zulkosky told Technical.ly.
The goal is to support new venture managers raising under $75 million. These managers’ firms are located in the US raising funds I, II and III. Recast so far isn’t targeting any specific sector or niche within the startup ecosystem, and has made its first three fund commitments (although they’re not public yet).
I saw this really unique opportunity that by focusing on emerging managers in venture, you could enable this path to greater diversity in venture.
Alongside its funding efforts, Recast also hosts a 12-week cohort for venture managers who meet with Recast and other prominent figures in the community to hear advice and suss out hot issues. Zulkosky said Recast has hosted three cohorts since its founding, and just closed applications for its fourth in the fall. The programming is free to participants, thanks to funding support from partners (including, in 2021, Melinda French Gates’ Pivotal Ventures), which is intentional to help make the program as accessible as possible. To date, Recast has worked with 40 funds, according to Zulkosky. Of that number, she said, 80% of those fund managers have included at least one woman general partner and over 50% have included at least one general partner of color.
Alongside its funding efforts, Recast also hosts a 12-week cohort for managers — the Enablement Program, which in 2021 was sponsored by Melinda French Gates’ Pivotal Ventures. Approximately 12 to 15 managers meet with Recast and other prominent figures in the community to hear advice and suss out hot issues. Zulkosky said Recast has hosted three cohorts since its founding, and just closed applications for its fourth in the fall. The programming is free to participants, thanks to sponsorships from partners, which is intentional to help make the program as accessible as possible.
“I saw this really unique opportunity that by focusing on emerging managers in venture, you could enable this path to greater diversity in venture or broadly,” Zulkosky said. “So that’s really what gave me the original idea of focus here, and then creating this educational platform alongside it was a really powerful tool as well to support more of the market.”
For now, Recast focused on the US, with Zulkosky and McCrea stationed on opposite coasts. But it has a strong market in Zulkosky’s DC home — ICYMI, the region just closed a $5 billion VC year in 2021. The fund management circuit has also seen huge growth, with an “explosion” of new investment funds targeting local and national founders opening across the country, the managing partner said.
Although she does expect the boom to slow down eventually, and anticipates some consolidation among smaller funds going forward, she has high hopes for early-stage ventures overall.
“The early stage still remains a very exciting place to be playing,” Zulkosky said. “There’s a tsunami of capital coming in with later stages and I think the early stage is certainly generating the attractive returns based on that.”
Knowledge is power!
Subscribe for free today and stay up to date with news and tips you need to grow your career and connect with our vibrant tech community.