Introducing Sterling Road Fund 3: Deploying $20M through early-stage founder coaching

Today we’re introducing Fund 3, a $20M fund backing pre-seed stage founders of B2B startups, that have gone through our coaching program.

Since day one, we’ve taken a different approach to early-stage venture investing.

Rather than investing first, then offering to help, we partner closely with founders before making an investment. From goal setting to recruiting to fundraising and sales, we support them for a minimum of 3 months prior to making a six-figure investment. We do this because we believe that the most productive founder/investor relationships come from collaborating, and it’s almost impossible to know if you can work together from just one meeting.

We take founders from idea to their first $1M in revenue. We’ve used our audience to help founders hire their first salesperson, their VP of Engineering, or even a co-founder. We’ve helped companies close their first sale, or fill their pipeline with dozens of fundraising meetings through our investor database.

This model works. Many founders we’ve coached have gone on to do amazing things.

• Car rental startup Kyte now operates in 14 cities across the US and has raised more than $250M from Goldman Sachs, Park West, Amplo & DN Capital.
• Nova Credit has helped tens of thousands of immigrants use their international credit history and has raised over $70M from Kleiner Perkins, General Catalyst, Index, and Pear.
• For years we worked closely with the HR platform Knoetic before they raised $18M led by Accel.
• Our coaching and investments have also led to acquisitions: IT Community Pulse was acquired by Gartner, while tax savings company Ardius was acquired by Gusto.

As Venture Capital trends towards faster and faster decisions, we take the opposite approach. We are doubling down on our coaching-first model and standardizing a larger investment amount for pre-seed founders at $250,000 (up from $150,000 in our last fund). We think this allows us to focus less on rapid-fire negotiations and more on supporting founders.

We’re encouraged to see that our investors are bullish on this model — with LPs in Fund 3 including founders and top executives from Coinbase, Salesforce, Dropbox, AppNexus, BitGo, ChainLink, Meta, Google, and MobileIron. Our founders have also attracted top-tier co-investors such as Sequoia, Andreesen Horowitz, Accel, Founders Fund, and General Catalyst.

Discussion around our latest fund wouldn’t be complete without mentioning our commitment to diversity. While we still have a lot of work to do here, we endeavor to invest in founders that have historically received a smaller share of venture capital dollars, whether due to race, gender, or even geographic location. In our second fund, 65% of our capital went to founders with backgrounds that are traditionally underrepresented in tech, and we will push to do better in Fund 3.

We don’t care who you know. If you want to build a big company, we’re here to help you start. Get in touch: sterlingroad.com/apply