Financial Venture Studio Raises $40M for Early-Stage Startups

Venture capital fund Financial Venture Studio (FVS) has closed its second fund, a $40 million pool designed to help early-stage startups.

“Since launching in early 2018, we’ve strived to position ourselves as the first stop a founder makes in their entrepreneurial journey,” Co-Founder and Managing Partner Ryan Falvey wrote in a Tuesday (Aug. 9) blog post. “The barriers to entry in FinTech are high, and launching a new company is incredibly complex.”

Falvey said in the post that his firm’s goal is to accelerate the process by bringing together partners from throughout the financial services sector to engage with FVS’s founders, while also providing operational support and early capital.

“We’ve seen that this approach consistently allows our founders to move faster, make better-informed decisions, and, over time, build category defining businesses,” he said in the post.

Since its launch, FVS has invested in 50 firms, seeing 94% of its companies raise follow-on capital or get acquired.

FVS’s milestone comes amid one of the leanest times for startups looking for seed or Series A financing to come along in years.

Read more: Metrics Drive Early-Stage Funding Amid VC Funding Drought

“The toughest I’ve ever seen in my career managing a fund,” is how Jeff Morris Jr., who manages a crypto-focused early-stage fund called Chapter One, described the landscape last month. “It will be painful in the short term.”

And as PYMNTS also noted last month, lenders and investors haven’t necessarily disappeared, although the economic picture has shifted. As the world emerged from the pandemic last year, there was a surge in investor activity, causing overinflated valuations and a stampede to back the most hyped-up technology spaces.

See more: To Survive Funding Drought, Startups Must Think Like Camels, Not Unicorns

A year later, and some of those sectors have seen some stark devaluations. For venture capital firms hoping for a quick initial public offering (IPO) and easy profit, the reality is sobering.