If you pay attention to VC Twitter (or X, as it’s now called), you may have witnessed a heated debate recently: Should startup founders talk to VC associates—those lowly greenhorns in a venture firm’s hierarchy—or are those meetings pointless wastes of time?
The discussion was lively, as founders like Figure AI CEO Brett Adcock wrote: “For the record, I’ve been pitching associates for well over a decade. Here’s the number of times i’ve found it helpful: ZERO.” Box CEO Aaron Levie meanwhile defended the value (and honor) of associates: “Every partner we pitched passed, but one associate fought to push the deal through, saving us.” In the post, Levie tagged Kleiner Perkins partner Mamoon Hamid, revealing that he was that heroic associate. Hamid, Marc Andreessen, Jack Altman would all eventually chime in on the debate.
You know that scene in a teen drama after a cafeteria food fight, where someone sits back and says, “Wait, who started it?” In this case, that person may very well be serial entrepreneur Darren Marble, who originally tweeted: “Talking with a VC Associate will almost never convert into actual funding. Just stating the facts.”
When I find Marble, he takes pains to be clear that he’s not hating on VC associates at all, but rather that it’s just not an optimally efficient use of a founder’s time to meet with a junior person.
“I think it’s generally a mistake for founders that are wanting to raise capital, especially from venture, to spend the bulk of their time talking to lower-level people that are just not decision-makers,” Marble told Term Sheet.
Brad Kam, Unstoppable Domains cofounder, agrees: “The associate is never the decision-maker. You don’t be mean, or refuse to speak to them of course, but fundamentally that’s not how you get a deal done.”
And yet, while it’s true that partners write the checks, and the most senior partners often have the most power to get a deal done, many of the folks Term Sheet spoke to pointed out that associates can be something of a secret weapon for a shrewd founder raising capital.
Founders and associates are both in the building phase of their careers, notes IVP general partner Somesh Dash. That creates a mutual understanding that can fuel a powerful relationship. “Founders have to make their companies work, right? There’s no fallback,” Dash said. And for associates trying to break into the VC business, there’s only one path to success: “In school, you can get an A through F but here you’re either an investor in the startup or you’re not—it’s binary.”
Alex Chung, who’s an associate at Chai Ventures, agrees: “Associates and founders, especially first-time founders, have this shared desire to prove themselves.”
Associates can also serve as a sort of backchannel, providing a founder with valuable information about a VC firm’s investment process. “There’s politics within every firm and usually you need buy-in from multiple people—maybe the partner championing your deal is really excited but, like, there’s a lot of hesitation from the partnership about other things,” said Steph Mui, founder and CEO at PIN (and a former NEA associate). Associates can be “great allies,” Mui said, offering a valuable window into those inner workings.
Understanding these subtleties can be a big help to founders running through the harrowing fundraising gauntlet. Ultimately though, founders have to ruthlessly optimize their time and that means being discerning when it comes to associates. Are associates a vital part of the dealmaking process? If they are, great, and if not, that’s what doesn’t optimize founders’ time and can lead to the dreaded “long no,” said Rob Biederman, managing partner at Asymmetric Capital Partners.
No one is just their resume of course, and resumes have a funny way of underselling or overselling a person. Just because someone’s an on-paper-perfect GP doesn’t mean they’ll be an able (or willing) advocate. And just because someone’s an associate doesn’t mean they can’t be a vital, long-term partner for a fundraising founder.
Does that settle the Twitter debate? Probably not. As IVP’s Dash notes though, if nothing else, the debate about associates “is probably a good reminder to treat every interaction respectfully.”
Because you never know who someone’s going to be someday.
Elsewhere…Gecko, a Pittsburgh-based robotics company, recently secured $100 million in Series C funding to expand its defense technology operations. Fortune covered the company’s founding story, from its beginning as a senior project at a small Pennsylvania college. —Rachyl Jones
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
- Rivos, a Santa Clara, Calif.-based developer of chips for large language models and data analytics, raised $250 million in a Series A-3 funding round. Matrix Capital Management led the round and was joined by Intel Capital, MediaTek, Cambium Capital, CIDC, Capital TEN, Hotung Venture Group, and existing investors Walden Catalyst, Dell Technologies Capital, Koch Disruptive Technologies, and VentureTech Alliance.
- Upstage, a Seoul, South Korea-based developer of large language models and AI-powered document processing engines, raised $72 million in Series B funding. SK Networks, KT, Korea Development Bank (KDB), Shinhan Venture Investment, Hana Ventures, Mirae Asset Venture Investment, and IBK Securities led the round and were joined by existing investors SBVA, Primer Sazze, Company K Partners, and Premier Partners.
- GridBeyond, a Dublin, Ireland-based smart energy company, raised €52 million ($55.3 million) in Series C funding. Alantra Partners led the round and was joined by Energy Impact Partners, Mirova, ABB, Constellation, Yokogawa Electric Corporation, and existing investor Act Venture Capital.
- Kontakt.io, a New York City-based platform designed to provide insight into how patients and staff physically move through hospitals, raised $47.5 million in Series C funding from Goldman Sachs.
- finmid, a Berlin, Germany-based developer of financial infrastructure designed to help business-to-business platforms to provide financing support for their customers, raised €35 million ($37.2 million) in funding from Blossom Capital, Earlybird VC, and Max Tayenthal.
- Cynomi, a Tel Aviv, Israel-based virtual CISO platform for small-to-medium-sized businesses and service providers, raised $20 million in funding. Canaan led the round and was joined by Flint Capital, s16vc, and Aloniq.
- Red Rover Interactive, a Newcastle, U.K.-based and Oslo, Norway-based game development studio, raised $15 million in Series A funding. KRAFTON led the round and was joined by Tirta Ventures, Overwolf, and existing investors The Games Fund, Behold Ventures, GEM Capital, Lifelike Capital, and Acequia Capital and others.
- GovDash, a New York City-based AI-powered platform designed to assist with government contracts, raised $10 million in Series A funding. Northzone led the round and was joined by existing investor Y Combinator.
- Toku, a Santiago, Chile-based recurring payments platform, raised $9.3 million in Series A funding. Gradient Ventures led the round and was joined by existing investors F-Prime, Clocktower, Y Combinator, Funders Club, and Wollef.
- Miggo, a Tel Aviv, Israel-based cybersecurity platform designed to prevent application breaches, raised $7.5 million in seed funding. YL Ventures led the round and was joined by CCL (Cyber Club London) and others.
- BreachRX, a San Francisco-based incident response platform, raised $6.5 million in seed funding. SYN Ventures led the round and was joined by Overline.
- HumanX, a New York City-based conference for the AI community, raised $6 million in seed funding. Primary Venture Partners led the round and was joined by Foundation Capital, FPV Ventures, and Andreessen Horowitz.
- NightVision, a Bradenton, Fla.-based API and web app security platform, raised $5.4 million in seed funding from Danu Venture Group, Jim Higgins, Emilio Escobar, and others.
- Draftboard, a New York City-based hiring platform where companies can publicly post their referral bonuses, raised $4.1 million in pre-seed funding. Twelve Below led the round and was joined by Founder Collective, Ground Up, and Amino.
PRIVATE EQUITY
- Bernhard Capital Partners’ Department of Energy Services platform acquired Strategic Management Solutions, an Albuquerque, N.M.-based provider of management and technical consulting services to industrial clients with nuclear programs and projects. Financial terms were not disclosed.
- BeyondTrust, backed by Clearlake Capital Group, NB Private Equity Partners, and Francisco Partners, agreed to acquire Entitle, a New York City and Tel Aviv, Israel-based platform designed to automate requests for temporary access to sensitive data from employers, contractors, and administrators. Financial terms were not disclosed.
- Cumming Group, backed by New Mountain Capital, acquired The Ridgway Group, a Los Angeles, Calif.-based project and cost management professional services firm. Financial terms were not disclosed.
- Firmament acquired a majority stake in Sparkle Express Car Wash Group, a Chicago, Ill.-based membership-based express car wash brand. Financial terms were not disclosed.
- Gen II Fund Services acquired Crestbridge, a St. Helier, U.K.-based provider of private capital fund administration services. Financial terms were not disclosed.
- InvestorFlow, a portfolio company of Ambina Partners, acquired Coyote Software, a London, U.K.-based provider of cloud-based property customer relationship management software used by commercial real estate firms. Financial terms were not disclosed.
EXITS
- Delmas Investissements & Participations agreed to acquire a majority stake in Acces Industrie, a Tonneins, France-based platform for renting and purchasing construction machines and equipment, from Equistone Partners Europe. Financial terms were not disclosed.
OTHER
- The JF Petroleum Group acquired GE Goodson Service Company, a Midland, Texas-based general contractor for the petroleum equipment industry. Financial terms were not disclosed.
IPOS
- Rubrik, a Palo Alto, Calif.-based developer of cybersecurity software, plans to raise up to $713 million in an offering of 23 million shares priced between $28 and $31 on the New York Stock Exchange. The company posted $628 million in sales for the year ending January 31, 2024. Lightspeed Venture Partners, Greylock Partners, Bipul Sinha, Arvind Jain, and Arvind Nithrakashyap back the company.
- Ibotta, a Denver, Colo.-based platform through which consumer goods brands can offer promotions and rebates to customers, plans to raise up to $544.4 million in an offering of 6.6 million shares priced between $76 and $84 on the New York Stock Exchange. The company posted $320 million in revenue for the year ending December 31, 2023. Clark Jermoluk Founders Fund, Koch Industries, and Walmart back the company.
FUNDS + FUNDS OF FUNDS
- Evolution Equity Partners, a New York City-based venture capital firm, raised $1.1 billion for its third fund focused on the cybersecurity sector.
- SOSV, a Princeton, N.J.-based venture capital firm, raised $306 million for its fifth fund focused on deep tech startups with a focus on human and planetary health.
- Maven Ventures, a Palo Alto, Calif.-based venture capital firm, raised $60 million for its fourth fund focused on seed stage investments in companies addressing consumer tech trends like personalized healthcare and climate & sustainability.
PEOPLE
- Next47, a Palo Alto, Calif.-based venture capital firm, hired Vivian Cheng as a partner. Formerly, she was with Charles River Ventures.
- Symbol VC, a Tel Aviv, Israel-based venture capital firm, promoted Racheli Kogan to partner.
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