The Trail Continues…
Vermilion raises $25M for our second fund
TL;DR What three years and raising two funds taught me. And the news that Vermilion Cliffs Ventures just closed a $25M Fund II to back technical founders building across AI infra, security, and developer tooling. Via TechCrunch
A lot of my intro calls with founders, VCs, and LPs start the same way. “I read your post about your first fund.” And I always apologize for the length. If you have a spare four hours, go start from the beginning and learn too many details about me and my story. But it saves me a good 5-10 minutes of giving my background and more time to focus on the person or team I’m meeting with so that was an unintentional win.
Something I think marks great founders is resilience. The ability to keep moving when you hit what feels like a dead end. And as I wrote about in the launch of Vermilion Fund I, when you get to the end of the trail, keep going.
It’s amazing what you can learn in a few years. I started raising Fund I in 2023 and announced it just over a year ago. I’ve learned more in the last three years than in the previous ten combined and not just about being a fund manager but about myself. There’s a beauty to going into something with little experience, the way I did with Fund I. Raising and deploying Fund II has been different in ways I didn’t expect. And has authentically been some of the most rewarding work of my life.
So, the news.
Vermilion Cliffs Ventures has closed its second fund. $25M, up from $13M in Fund I. Same focus just bigger checks. We back technical founders building for technical users in AI infrastructure, security, and developer tooling.
The proof that this works isn’t mine. It’s theirs. Keycard came out of stealth to secure AI agents. CopilotKit raised its Series A for app-native agents. Sequin found its home at Notion. Those are the public ones but there are so many that have made incredible progress behind the scenes. Everything moves so fast even when you think no one is looking.
The part I’m most grateful for: 95% of Fund I investors, by dollars, are coming back for Fund II. You backed me with little data. Then you backed me again and it feels good to have a community of LPs that believe in me.
Raising a second fund is hard. Most people who raise a first one don’t raise a second right now, because either the work stops being appealing or the fundraise is too punishing. My Fund I LPs came back for Fund II and I added a few more great partners around the table to round out 15 total LPs including 3 incredible anchors with LGT Capital, Screendoor, and GEM. I’m thankful for my earliest supporters and proud that the group is small, supportive, and believes in me and my vision for the fund.
Some lessons.
Working with others is more fun than going it alone. Fund I, I built solo, and I loved the independence but felt the loneliness of being a solo GP that many had warned me about. Fund II, I wanted a teammate so I brought on Meghan Murphy, a former colleague and one of the sharpest technical GTM minds I know, to join me on this ride. The work is even more fun with a partner and having her on the team means the founders in the portfolio get more access to GTM experience and I’m not the bottleneck.
Meghan Murphy and I finally getting a great photo at a recent Vermilion event in SF. She is the reason the funds runs smoothly. The founders love her, I love her, and she is my people. We’ve worked together for almost 16 years and I hope for 16 more.
Fund I, you sell a narrative. Fund II, you sell a make-believe scoreboard. With fund I you’re selling the vision especially if you aren’t coming in as a career VC with a proven pipeline and returns. With fund II, LPs can look at fund I and try to estimate what investments they think will return dollars. With only limited data, a lot of this is make believe metrics.
Not all capital is created equal. A check is a check, but the people behind it aren’t interchangeable. Partner with the ones who bring value and community, not just dollars. I tell my founders to build a cap table of different strengths. I’ve been spending more time thinking about who I want to work with long term with the founders I back and those relationships with other VCs have been so rewarding personally and professionally.
Make time for life. It's possible to be obsessed with the job every waking hour. I spend a lot of my time and energy thinking about the fund. I love it. But you have to build in the downtime, and the room for friends, family, and the people and things you love. The work will take everything you give it, so decide in advance what it doesn't get. For me that looks like calendar blocks for walks, long weekends, and leaving my laptop behind to sit in the park with a book. One of my anchor LPs gave me a great piece of casual advice when I sat with her recently. I told her I'd stopped doing some of the things that are core to my existence, even though I had the time. She told me to make time for life. She's right.
You have to fail to succeed. Venture isn’t a straight line, and it isn’t supposed to be. The failure rate is higher than almost any normal career, and at the earliest stage it’s the highest of all. For a part-time perfectionist like me, it’s been a hard adjustment period. The misses are the cost of the swings that return the fund. That’s the entire job.
Conviction is cheap when you have no track record. Fund I, I had a vision, a story, and the need to tell it. That was enough to start. Fund II, the hard muscle is discipline. Passing on a genuinely good company because it isn’t my company. Saying no to a founder I like. That’s harder than any yes.
Pattern recognition is a gift and a burden. You can know more and feel less certain. The thing that makes you fast is the same thing that makes you miss the founder who doesn’t fit the shape you’re expecting. Keep an open mind and always be ready to change your opinion or have your first impression challenged. That’s good advice in life and in work.
I used to think experience would make me more sure of my decision making. Instead it has made me cautious which I don’t necessarily like.
Choose how you spend your time. The people I get to work with, whether by investing in their ideas, taking their investment into my fund, or sitting beside them as co-investors, are people I'll work with for decades or more. None of these are short-term relationships. So be considerate about who you work with, and in turn how you spend your time. And choosing how to spend your time means spending time working on things you like with people you like.
Community is bigger than your network. This is the most important realization I’ve had building Vermilion, and it carries over into getting older and choosing the people around you. When you’re building anything important to you, community is everything. I tell founders daily to start by finding the people who are excited about what you’re building and who give you support, and to grow that base.
One of my first LPs, in since day one, has told me the same thing for years. That I don’t understand how broad my network is and how many people I have in my corner.
She’s right that I underestimate it. But beyond network, it’s my community.
And community is everything. It’s most of the job, if I’m honest about it. Every time we throw an event, or I need a favor, or someone else needs one, it’s the community I’ve spent two decades building that comes through. It’s the people from Twilio who volunteer to help set up an event oversubscribed three times over. It’s an old CEO of mine running diligence on a deal with me. It’s another CEO of mine deep in a fundraise, the two of us locked in together like we were decades ago. And it’s the people I used to ship with every day as a bright-eyed 24-year-old, coming back together to build and reminiscing about how much fun we used to have.
Last week I got to spend time with all three CEOs from my first three startups, where I cut my teeth and made mistakes. Three different contexts for the time spent with them and all of them still in my life and now back in my work. I got to build with each of them again. It reminded me of their greatness and why I still look for founders who share their qualities. Two decades in, and the people I started with are still the people I’m scheming with.
People talk a lot about not burning bridges when you leave a job. In a community as small as SF tech, that’s one of my biggest life lessons. Leave elegantly and be kind. You’ll be working with these friends and former colleagues for the rest of your life if you’re lucky.
I’ve grown up alongside these people. Careers and companies and marriages and kids and moves and life’s surprises. Good years and hard ones. Wins and the losses in between. We’re all still growing. That’s the part I didn’t quite get. You never really grow up. You don’t arrive. You just keep going, together.
And as a fund manager your LPs become the people you call when you’re stressed and need help with a problem. My anchor LPs are my friends. They are a big part of my community. I understand it’s a business relationship, and the expectation is that I make them hefty amounts of money, and I will. But it’s more than that. They are my people. And I’m very lucky to have them in my corner.
Laura Thompson from LGT and I pictured in SF where she consistently shows up to our silly tiki parties and hacker events. She has been a friend, a source of endless wisdom, and one of the biggest supporters of me and Vermilion. She sees around corners and knows more about what it takes to build a fund than I do. She gives advice that always comes true and I’m like “Oh right,Laura said this would happen”. We clicked instantly and I’m so thankful for her friendship and mentorship. We will be in each other’s lives long after Vermilion.
Lisa Cawley from Screendoor and I when we met in SF and she told me she was expecting her second beautiful baby almost a year ago. Lisa has been a day 1 believer and I am lucky to have her. She is the person I vented to during Fund I when fundraising was hard and I was going through hard things in life. She was there for me. We’ll be friends for life.
Caroline Dallas from GEM and I meeting in NYC yesterday catching up over a casual lunch. Equal parts business and life gossip. She’s been an incredible partner and as our newest anchor LP, I’m just lucky to have someone that in a different world we would have been fast friends and stayed that way for life. Caroline is a force of nature. She is impressive in ways that are hard to explain and I watch her set her mind to a task, get it done, and blow everyone else out of the water. We have a lot in common.
It wasn't only the old relationships that carried forward. It wasn't just the new LPs who believed in me and my vision. It was the new relationships I've been so lucky to build. Founders who became friends. Co-investors who became a group chat that's only about 30% work. Other people in the industry who are just a delight and have become a core part of my day. People I met at the tail end of a raise who I now can't imagine working without. Almost twenty years in to my career in tech and so much of what drives the work today runs on relationships I didn't have a few years ago. With the new friendships and the people I've known for more than half my time on earth, I'm just so lucky to spend my life with you all. You are my people. You are my community. And you are everything to me.
It’s really hard to put the joy of my life into words. So instead I’m just going to do a millennial style mid-2000s Facebook album unedited and lacking context. But I love all of these people and it’s impossible to capture everyone so this random assortment hopefully shows that I have a beautiful group of humans in my community and I’m thankful for all of them.
So if I could tell anyone building anything one thing, it’s this. Surround yourself with people you enjoy and love. Make time for them. The work is long. The trail is long. Do it with your people. Find your community.
The point
I started Fund I in the middle of grief and life’s curveballs. Losing my grandfather, then a fast-follow cancer diagnosis for my dad that meant eighteen months of about the most severe treatment anyone could survive. But he did. He’s been on the tractor all weekend and is healthy, happy, and sassy.
Fund II I built on steadier ground, and what surprised me is that the work felt the same either way. Work and my community was always my grounding force. I think that’s the gift of loving what you do.
Fund I, the lesson was to ask for help. People like to help. Fund II, more often I’m the one being asked. The shift from the person looking for a door to the person who can open one sneaks up on you.
With Vermilion Fund II, I’ve built the team, learned from the experiences of Vermilion Fund I, and feel so lucky to work with the founders and community I’m surrounded with.
Thankful to still be on the trail.
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amazing read.... love the photos
🧡