After unintentionally founding a venture capital firm four years ago, Max Altschuler, the founder and general partner of GTMfund, has successfully raised a second fund amounting to $54 million, surpassing his initial goal of $50 million.
GTMfund is among the emerging wave of “operator-led” funds, where the limited partner investors consist of individuals who have experience at successful tech companies, often referred to as “operators” within the VC community.
“Most of them are either currently active at their companies or have recently left a position where their company grew rapidly, reaching a few hundred million in revenue,” Altschuler shared with TechCrunch. Limited partners (LPs) come from firms like AWS, OpenAI, Procore, Rippling, and Snowflake, according to him.
These LPs predominantly specialize in marketing and sales, often called “go to market” experts in Silicon Valley, hence the name GTMfund.
In addition to their financial contributions, LPs also provide mentorship to the fund’s portfolio companies in sales strategies—an area where many startups face challenges—and assist in recruiting sales talent. They also play a crucial role in identifying and evaluating promising early-stage startups for investment.
The initial fund, which launched in 2021, comprised around 250 operators and only a handful of institutional investors. It invested in companies like AI composer Writer (valued at $1.9 billion in its latest funding round in November), AI data center technology company Atlan (which recently raised $105 million at a $750 million valuation), and security compliance firm Vanta (which secured $150 million at a valuation of $2.45 billion), among others.
Building upon that success, Fund II was able to attract 300 operator LPs alongside six institutional investors, including Bain Capital Ventures, HarbourVest, Inovia Capital, and Franklin Park.
As a result, Altschuler is now at the helm of a burgeoning emerging fund.
This trajectory, however, wasn’t part of Altschuler’s original plan. He began his career as the eighth employee at Udemy, heading sales during its formative years. He contributed to the startup community SaaStr and provided advisory services to several startups. Subsequently, he founded a blog named Sales Hacker, which he sold to Outreach in 2018 but later reacquired. He began angel investing, making early investments in companies like Gong and Carbon Health.
Members of Altschuler’s expansive network frequently sought his guidance on angel investing. In response, he decided to explore this avenue.
He reached out to a network of GTM professionals with a proposal: “What if we gathered a million dollars from 20 to 50 of us, distributed it among 10 startups, and provided them substantial support?” His concept gained significant traction, leading to a remarkable $22 million fundraising for Fund I.
LPs participating in the fund have the flexibility to engage as much or as little as they prefer, from silent investment to taking an active role in portfolio companies. GTMfund has also developed community features, including a deal flow channel for LP discussions and hosting six annual dinners along with a yearly retreat.
“For me, this has evolved into a true labor of love. It’s incredibly enjoyable,” he remarked. “I’m deriving the same satisfaction from it as our LPs do. I find great joy in collaborating with diverse founders and companies on the specialized topic of go-to-market strategies.”
While the structure of GTMfund as an operator-led fund is relatively uncommon, it’s not entirely unique. For example, Mallun Yen established Operator Collective in 2019, which launched with $45 million and subsequently raised an additional $92 million in 2022, boasting an impressive portfolio. Another recent entry is Ashley Mayer’s Coalition, which began in 2022 with $12.5 million.
Regarding GTMfund’s second fund, Altschuler indicates that the aim is to support approximately 40 early-stage startups at pre-seed, seed, and occasionally Series A stages, with investment amounts ranging from half a million to $1.5 million.
Compiled by Techarena.au.
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