As Juniper Square’s Top VC Fundraiser in 2023, we wanted to sit down with Katie Riester, Managing Director and General Partner of Fund of Funds Investing at Felicis, to learn about the firm’s investing philosophy, how she builds rapport with LPs, and how they achieved fundraising success in a volatile market.
Q: Tell us more about Felicis and your role at the firm.
A: Felicis is a venture capital firm that invests in companies reinventing core markets or creating frontier technologies. We focus on early-stage investments and manage over $3B in capital across nine funds. Over 100 of our portfolio companies, including Shopify, Adyen, Credit Karma, Cruise, and Recursion, have been acquired or gone public. We’ve also invested in Canva, Notion, Runway, and Weights & Biases.
I started my career as an LP at Cambridge Associates in 2002, helping institutional clients build and evaluate their private equity programs. In 2005, I joined SVB Capital, the investment arm of Silicon Valley Bank, and while I was there, I was one of Felicis' first investors. After being an LP of Felicis for seven years, I joined Felicis in 2017.
I've always loved working with people in the LP world who are doing really interesting things and making our world a better place. At Felicis, I lead the investor relations team and am responsible for fundraising and ongoing relationships with existing investors. I have a unique perspective on what’s out there and what kind of fundraising experiences are offered to investors. I’ve seen the good, the bad, and the ugly. And I know what questions LPs have because I’ve spent most of my career as an LP.
Q: What is Felicis’ investing philosophy?
A: We want to invest in the world's best companies and become founders’ most trusted partners by investing directly in their growth. We believe iconic companies transcend boundaries: they can be built anywhere, by anyone, and in any corner of the economy. We partner with founders worldwide across sectors, including AI, Global Resilience, Infrastructure, Security, Health and Bio, and Vertical SaaS at various stages. We have a targeted approach, and we invest in sectors that are critical for everyone.
We measure our success not merely by exceptional returns but by the impact we create through our mission-driven LPs. We aspire to achieve "success with empathy"—empathy for our founders, their employees, our LPs, and the people our companies serve worldwide.
Something unique we do at Felicis is our Founder Development pledge. We offer up to 1% of the first check that we write to every founder for them to use for professional development. We believe you need to invest in yourself to grow as a leader so you can grow your company year after year at over a hundred percent. That's a unique differentiator of Felicis, and it helps us win deals.
Q: What were Felicis’ fundraising efforts in 2023?
A: We closed on $825 million in February 2023. This close came just after some significant drops in the stock market, when interest rates were rising, and it was a very stressful time for our LPs.
I had been previewing this fundraise for more than a year. We like to keep the process of actually fundraising to as short a time period as possible so that the team can focus on the job of investing.
It was an extremely efficient fundraise. We launched it the week before Thanksgiving and had one close in February, so the fundraising period only lasted three months. Doing one close is very important to Felicis because we want everyone to feel like they're in the same boat and treated fairly.
Q: How did Juniper Square’s fundraising solution help with this fundraise?
A: Before, we had an outdated tech platform that just had a document repository and didn’t have a portal with modern functionality. LPs complained about not being able to access their documents on demand, and onboarding new LPs was a burdensome process for our finance team because it was done manually.
The Juniper Square platform made it much easier for our team to track LP progress as they worked through subscription documents. It also helped ease the administrative work on the backend as information like contact lists and wire instructions would be pulled into their portal once fundraising was completed.
Juniper Square’s user interface is easy to navigate on both the GP and LP sides. We also like its clean formatting: the portal is crisp and modern, which matches our aesthetic. Logging in and seeing all your investments with Felicis on one screen is much easier than navigating ten folders.
Q: How did you maintain strong relationships with your existing LPs during a challenging market environment?
A: Our LPs are diverse: university endowments, foundations, hospital systems, and family offices. We always strive to be transparent with our LPs so that when it comes time to fundraise, there aren’t any surprises. Over the last few years, we have increased the communication rate—we write formal updates to them approximately every 45 days, and in between that, I communicate and visit them frequently—and are increasing the founder-to-LP connection loop as well. We want to make sure everyone is on the same page.
We also want to help our LPs build confidence with their stakeholders around the long-term value of an investment with Felicis. To do that, we write more frequent and shorter updates rather than longer quarterly letters. Our goal is that someone can read it in a few minutes and get the most important information. You have to be very selective about what makes it to the final cut, so I think, “If I am an LP and I haven’t talked to Katie in a month, what are the 1-2 things I need to know in the fewest words possible?”
Q: Do you expect it will be easier or harder to raise capital in 2024? Why?
A: Easier. Public markets are going up, people are more relaxed, and investment committees have been able to reassess capital needs and rebalance as needed.
Felicis was featured as one of Juniper Square's 2023 Top Fundraisers, based on our analysis of the capital raised by our clients using digital subscriptions. Digital subscriptions is one of Juniper Square's digital fundraising tools, helping GPs deliver a better investor experience and raise more capital.