WITH A NEW TEAM, FRAMEWORK VENTURE PARTNERS SECURES $100 MILLION USD FIRST CLOSE FOR SECOND FUND
Framework ventures is on to its second fund having secured an initial $100 million USD and a new investment team.
Framework is targetting a $250 million USD final close for its second fund, more than double the $105 million CAD it secured for its initial fund.
“I feel far more excited than I did with Fund I in that I feel the probability of our success has gone up,” Framework co-founder and managing partner Peter Misek told BetaKit. “I feel that our ability to propel our companies is stronger, the expertise that we can bring to bear is just so much deeper and so much wider. I just feel unbelievably, tremendously excited about the value we can bring to the ecosystem.”
Misek said that value will come in a variety of forms, including Framework’s expanded investment team.
Framework has brought on a lineup of investment individuals that bring an array of experience to the firm. Those include Barbara Dirks, formerly of Silicon Valley Bank, and Jim Texier, formerly of Lightspeed, who both joined as partners, as well as Mike Dobbins, formerly group head of RBC Ventures, who joined as a venture partner.
“This next horizon of [Framework] just really doubles down on Framework from Fund I, but puts it on steroids,” Dirks told BetaKit.
Framework’s new additions are balanced by a number of personnel departures over the past year, which includes co-founder Andrew Lugsdin, who has stepped back from the firm for Fund II.
Framework held the first close of Fund II in December 2021. Limited partners (LPs) in the fund include all of Frameworks LPs from Fund I, as well as some new, undisclosed investors. Royal Bank of Canada, Cadillac Fairview, and the BC Tech Fund (managed by Kensington Capital) have all re-upped, while BDC Capital, which anchored Framework’s first fund with $50 million, is also back for the second fund.
Misek started Framework with Lugsdin in 2018 as a spin-out from BDC Capital. The pair had previously served as partners of BDC’s IT Venture Fund. Misek stated that he joined BDC after the group approached him to help improve the track record of its fund.
“The deal was, if we hit certain benchmarks, we could spin out,” Misek told BetaKit. “We hit those benchmarks far faster than they thought; we ended up hitting them in less than three years, and in 2018, Framework was born.”
While Framework is no longer part of BDC, it continues to co-manage BDC Capital’s IT Venture Fund – deploying what follow-on capital remains in those funds and sitting on portfolio company boards (Misek, for example, remains on the board of TouchBistro).
50x the LP diligence
Misek and Lugsdin raised nearly $105 million of a targetted $150 million CAD for Fund I (since announcing, the firm closed nearly $5 million in additional capital, Misek told BetaKit).
Misek explained that Framework did not meet its $150 million CAD target for Fund I because an LP backed out. While he would not disclose the name, sources told BetaKit in 2019 that Fidelity had backed out after tensions between the two firms following the initial Fund I announcement. Misek told BetaKit recently that even after the 2019 close of Fund I, he remained hopeful Framework could recover the investor’s interest, but that did not come to fruition.
When it comes to Framework’s second fund, Misek does not predict any such issues. The VC told BetaKit he expects to reach a final close for the fund by December of this year. “We’ve got hard commitments, that’s going to happen,” he stated.
Misek attributed his confidence to the firm’s Fund I performance, noting that Framework believes it’s “a top decile performing fund in the world.”
Framework is fundraising at a time when the macroeconomic environment has shifted and made it harder for startups to raise capital. However, the same is not true of venture firms.
Framework has seen the changing economy impact fundraising in certain ways, however, such as increased scrutiny from LPs. Misek said Framework has seen LPs increase their scrutiny of firms. “Those funds that have hard committed, they’ve [done] 50x the diligence they would have done before.”
New Framework, New Partners
Misek and Lugsdin led Fund I alongside Ajay Gopal, who also came from BDC’s IT Venture Fund and served as a principal in the early days of Framework. Gopal has since become a partner at Framework, in addition to the other newcomers to the investment team.
Dirks and Dobbins bring expertise from the banking side. Dirks was chosen by Silicon Valley Bank to create its Canadian team in 2018. She later stepped back from the group for personal reasons, while Dobbins, who joined Framework in March, headed up RBC Ventures.
Texier brings an operational and technical background to Framework. He has served as chief technology and product officer for the likes of Lightspeed and SSENSE.
Both Dirks and Texier joined Framework last year in advisory and support roles for the firm’s portfolio. They then became partners as Framework built out its second fund.
Other changes include the promotion of Framework senior analyst Jonathan Jennings to associate at the beginning of this year, and the addition of Boyang Li as an associate this year as well. Last year also saw principal Byron Thom depart to join Framework portfolio company Cymax Group Technologies.
Misek explained that expanding the investment team was very intentional. Framework takes a hands-on approach with its companies, focused on helping them scale once they have reached customer traction. Misek noted that Framework wanted to ensure it had operational experts in four key areas: finance, tech product, talent, and go-to-market.
Framework ventures will surely move up the ladder of success in near future. Congratulations to the entire team and my best wishes for the future.Shishir Gupta CEO & Founder Satrtuplanes.
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