Today we are excited to announce the next chapter of Underscore VC with fresh capital, new leadership, and a renewed opportunity to deliver our community-driven approach to supporting ambitious early-stage founders.
Underscore was founded on the belief that there’s a better way to build a venture capital firm. We were inspired by the principles of open source software — community, collaboration, transparency — and guided by the conviction that surrounding founders with a thriving expert community can change the trajectory of their business for the better. So, we rewrote the rules (and the economics) of venture capital and built the Underscore Core Community — a curated, expert ecosystem that provides founders with the right expertise, from the right people, at the right time — all on our dime.
What started as a lofty hypothesis has delivered results.
We’ve backed over 75 companies, supported by 112 Core Partners — a group of advisors from the Core Community who get allocated a profit share in our investments. 85% of our pre-Seed and Seed investments have gone on to successfully raise follow-on capital. And over 30 Core Members have jumped in as critical portfolio company hires. With this support around them, these startups are transforming industries like commerce, financial services, insurance, healthcare, supply chain, and more. And, while we’ve backed founders from across the globe, we’re proud that over half of these founders have come from our hometown of Boston, with a third coming from Boston’s unparalleled academic community.
From this strong foundation, we’re moving into our next evolution and we’re excited to share some big news:
- We’ve closed a $58M Fund III to continue investing in pre-Seed and Seed B2B software founders;
- We launched our Core Limited Partners Program, deepening our community model;
- We’ve completed a generational transition of firm leadership;
- And we’ve promoted Brian Devaney to Partner.
Launching Fund III
Amid the backdrop of one of the hardest fundraising environments for founders and VC firms alike, we are proud to announce that we’ve closed our third fund, with $58M in new capital to invest in pre-Seed and Seed-stage founders who are building the next generation of iconic B2B software businesses.
With Fund III, we are sticking to our knitting as early-stage company builders, powered by community. While we now have over $300M in assets under management, we’re a small firm and plan to stay that way. As they say, “Bigger isn’t better. Better is better.” We believe a smaller firm and fund is uniquely suited to providing focused support for founders and better returns for our investors, a blue-chip group of leading hospitals, university endowments, foundations, and family offices that we’re proud to partner with.
Deepening Our Community-First Model
With this new fund, we’ve launched the Core Limited Partners Program. This program allows Core Community Members to invest directly in our fund, deepening our community-first venture model. This group of new investors includes over forty seasoned operators from Boston tech stalwarts like Klayvio, Toast, Hubspot, Flywire, and DataRobot, as well as leading technology institutions like MIT, Anthropic, and Microsoft, among others. This group will lend its expertise and support to us and our founders as we invest in and help build great companies.
A Long-Planned Leadership Transition Comes to Fruition
Leadership transitions are difficult for any type of company, but for a variety of reasons, they are particularly challenging for venture capital firms. In fact, poor succession planning is one of the leading causes of VC firm wind-downs. When Michael Skok, John Pearce, and Richard Dulude founded Underscore VC, they clearly understood this dynamic and explicitly planned for the eventual leadership transition of the firm.
In alignment with their vision to build a multi-generational firm, with this new fund, Lily Lyman, Richard Dulude, Chris Gardner, and James Orsillo are collectively assuming management of the firm’s General Partnership, with Lily Lyman stepping into the role as our firm’s leader.
While this General Partner group of former operators and entrepreneurs has a diverse set of skills, interests, and investment theses, what they share is a belief that venture is a team sport. For six years, this team has been collaboratively investing in and supporting early-stage founders, while evolving the Underscore firm and Core Community along the way.
Michael Skok, now a Founding Partner Emeritus, will continue to serve as a trusted resource to the Underscore team and portfolio. Michael will also continue to share his wisdom in person, on campuses, and online, through his Startup Secrets content and curriculum. We’re deeply grateful for his partnership as he enthusiastically ushers in Underscore’s next chapter.
John Pearce, Founding Partner Emeritus, passed away unexpectedly last November during this leadership transition. John had long looked forward to supporting both our firm and our founders while rightfully enjoying time with his loving wife and two kids in his next phase of life. John was a spiritual leader at Underscore and a trusted advisor to us and our portfolio companies. We miss him every day.
A New Underscore Partner: Brian Devaney
With our continued vision to build a multi-generational team, it’s with great pleasure and excitement that we announce the promotion of Brian Devaney to Partner! Brian moved east and joined Underscore VC from First Round Capital in 2020. He hit the ground running and quickly established himself in the Boston ecosystem as a magnet for both experienced and first-time founders, showing outstanding investing acumen, and becoming an exceptional partner to many of our existing portfolio companies.
Like all of us at Underscore, Brian spent time on the other side of the table as a startup operator. As Strava’s first business hire for Strava Metro, Brian led the marketing and sales function, quickly growing the new line of business to hundreds of cities with tens of millions in activities uploaded to Strava. Brian has walked his talk, and it shows.
As one Underscore-backed founder put it, “Brian’s attention to and understanding of the real needs of founders is extremely rare. He has done everything he has said from the very first interaction and has stayed very open and honest with feedback.”
In his new role as an investing Partner, Brian will be digging deeper into a variety of domains, leading investments in vertical software, digital transformation, supply chain, and enterprise applications that leverage AI. Learn more about Brian here.
Our Focus and Values Remain
While there is a lot that is new in this next chapter for Underscore VC, there are some fundamental beliefs that we will continue to embrace.
- It takes a community. We remain deeply committed to the value of surrounding entrepreneurs with a community of builders that can change the trajectory of their business.
- We are early-stage B2B software investors. Underscore was originally founded as a Seed-to-Series A firm, but since 2020, we have been laser-focused on pre-Seed and Seed investing. This is where our backgrounds and the support of our Core Community can deliver the most impact for founders and the best returns for our investors.
- People first, all the time. We invest in people. Uniquely qualified founders tackling huge, meaningful problems are the engine of innovation. Our job is to find them and help them realize their audacious visions. So, whether you’re an experienced operator who’s lived the problem you’re solving, a repeat founder pursuing your next adventure, or a student or professor spinning out of an academic institution, we want to hear from you!
Thank You
In closing, we want to recognize the founders, Core Members, and Limited Partners that have made Underscore VC possible — a huge thank you. We are deeply grateful for your support and trust along this journey.
Onward!