Inspired Capital recently raised $330 million for its third fund—here’s what worked

In 2022, Meghan Joyce was Oscar Health’s COO. Though she’d been mulling over plans for a startup of her own, it was a tough sell to move on from a stable, prestigious job into the unknown, alone.

That all changed when Joyce realized she wasn’t alone. One day, she received a letter of intent from her college friends Alexa von Tobel and Lucy Deland, by then at Inspired Capital. That LOI helped her take the leap and start working full-time on what’s become Duckbill, an AI-powered personal assistant startup that has now raised $33 million.

“I like to think I would have gone and done it at some point, but venture and AI is a game of bold leaps and speed…and I don’t know what would have happened if they hadn’t taken that step,” Joyce told Term Sheet.

And that’s the crux of what makes early-stage investing—seed stage especially—unique. That early, one LOI can change the course of someone’s life, and one check can bring a company into existence that otherwise may have never seen the light of day.

"I truly get out of bed every day energized because this is like one of the most exciting and rewarding places to focus,” said von Tobel. “It's willing something into existence.”

It’s high-risk and high-reward. Surprisingly perhaps, it's this segment of the market (seed stage in particular) that has been most resilient in terms of fundraising and valuations amid a VC downturn. And Inspired Capital, which in von Tobel’s words focuses on “napkin to Series A,” has done something that, in a tough fundraising environment, made me do a double-take—the firm raised a third fund at $330 million without knocking on new doors. Though the round included new investors, they were LPs that Inspired has built long-standing relationships with for some time.

The data suggests that Inspired has beaten the odds, according to Crunchbase News senior data editor Gené Teare.

“In 2023, funds $300 million and below in the U.S. were down by around 35% by amount raised, whereas funds above $300 million were down by 64% year-over-year,” she told Term Sheet via email.

Here’s what we know for sure about early-stage investing right now: Though funding at every stage was down last year, seed was down comparatively less, after growing by nearly 10% in terms of dollars invested in 2022, according to Crunchbase data. Series A, in contrast, has been dicey.

“For many startups that has meant staying in the seed pool for longer and raising multiple seed rounds in advance of a potential Series A funding,” said Teare.

What this all amounts to seems to be that, despite early-stage investing’s fortitude, as Olivia Rodrigo would say, it’s brutal out there. This begs the question: What went right here for Inspired? Teamshares cofounder and CEO Michael Brown, who’s both an Inspired LP and has been backed by the firm, says it comes down in part to von Tobel and Deland’s experience as founders themselves—von Tobel founded LearnVest, while Deland cofounded Paperless Post.

“This is something Vinod Khosla talks about, that unless you’ve built a venture-scaled business, you don’t have the right to give someone advice,” said Brown.

Von Tobel and Inspired have also started articulating a perspective they call “An Inspired Future,” the idea that ”when there are huge societal issues, that’s the perfect place for entrepreneurs to show up,” von Tobel told Term Sheet. One institutional LP has found this clear vision compelling, along with von Tobel and Deland’s “founder DNA” and discipline in terms of fund size.

Von Tobel is engaged with massive problems, and is planning to invest in areas like the crossroads of AI and healthcare and the industrial economy—but she’s fundamentally an optimist. She sees venture capital, at its best, as a powerful tool for driving innovation and positive societal change. And if you’re "irrationally ambitious," she’s very possibly looking for you.

"We are looking for the biggest-swinging entrepreneurs going after the hardest, most complex problems, and then we’re steady hands behind them so that they can actually go and make a big dent in those problems,” said von Tobel.

See you tomorrow,

Allie Garfinkle
Twitter: @agarfinks
Email: alexandra.garfinkle@fortune.com
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This story was originally featured on Fortune.com