Nov 28, 2022

As Dealflow Gets Competitive, Fintech-Focused Dash Fund Gets Collaborative

In April 2020, Ryan Sells and Tom Seo were wondering if their first fund, a $3.3 million proof of concept, was going to be okay. “The world was melting. It was awful,” Ryan says, “but I think it actually ended up being a tailwind for us.” 

They not only raised the fund—featuring LPs like Bain Capital Ventures, Anthemis, Tribe Capital, Ben Sun from Primary, and many other investors and operators —they also got a more competitive edge on rounds. 

“A year ago, a lot of VCs were taking a step back. As a small and nimble fund making quick decisions, we had an advantage,” Ryan says. They got in on teams that are now already building great traction, from Finary to Laika to Pave

As the venture community is becoming more competitive than ever, Dash Fund has quietly raised a $22 million second fund just a year after Fund I. “The rise of fintech continues to accelerate and Ryan and Tom have demonstrated that they are accessing high-quality opportunities to a strong network of downstream investors as LPs,” says Primary cofounder Ben Sun. “Given their momentum and growing pipeline, I am excited to continue to be an LP in Fund II.”

Dash’s strategy for Fund II remains the same, which is to be fintech founders’ go-to, high-signal, and collaborative money at the pre-seed and seed stage.

Dash Fund’s origin story

Ryan and Tom met a little over three years ago. Ryan was overseeing go-to-market and strategic business development as an early employee at Y Combinator-backed Second Measure, which Bloomberg has since acquired.

Tom was at Citi Ventures and participated in Second Measure’s Series A alongside Goldman Sachs, Bessemer, and YC. Ryan was doing angel investments himself, partly because of his access to interesting entrepreneur friends and partly because, from his time as a JP Morgan trader, he came to see that “in the world of public market securities competing with Citadel, Point72, and Renaissance, who have built extremely powerful algorithms and tools to trade in and out of positions faster than most humans can compete with,” it’s hard to get an edge. In private markets, especially at early stages, “it’s more of a game of access and networks.” 

It didn’t take Ryan and Tom long to see they could increase their edge by working together. Casual collaborations on deal flow eventually became Dash.

Dash’s fintech focus

When Tom and Ryan started investing in friends’ startups, the strategy was more ad hoc. Ryan invested in a tech-enabled fitness company; the pair teamed up to back Legacy, a male fertility company. 

“Through Fund I, a big learning that we've had is that we truly are best within our lane and our lane is fintech,” Ryan says. “And so we've just stopped investing outside of the category more recently.”

“Over the last year, we've certainly learned that we see fintech deals sooner. We're able to diligence them quicker and more thoroughly. And so we've just decided to double down in the category.”

Providing fintech value, de-risking future rounds

Tom and Ryan don’t lead rounds, but having them on the cap table directly injects lots of expertise in both fintech and investing. Tom, with a more institutional VC background, digs into unit economics and market opportunity. Ryan has spent more time as an operator: as Head of BD and employee number 7 at Second Measure and employee Number 9 and VP of Revenue at Pipe.

They’re also hungry. “We’re thinking about how to take something from zero to one in as quickly a way as possible, without going so fast you miss on product,” Tom says. “We view ourselves more as operators than investors, and we are comfortable talking to founders before they have a cofounder or the idea is on slides, we have no issue having productive early conversations with the founders.”

And the networks they’ve built over their careers—and in many cases invited right into the LP pool—help Ryan and Tom connect the portfolio with early hires, customers, and larger investors for the next raise. 

“We like to flex our fintech domain expertise,” Tom says, “but we also like to flex our networks. We have perspective, but we’ll put you in front of someone with even better perspective. So we'll say, ‘Folks like Ben at Primary are investors in my fund, and I guarantee you, he will want to look at the seed round.’” It’s a great sell for founders, and LPs include funds like Bain Capital, Kleiner Perkins, and Anthemis, over 100 as well as individuals from funds like Andreesen Horowitz, Primary, Coatue, IVP, and QED. 

An example of how Ryan and Tom bring their networks to the portfolio is the team’s collaboration with Matt Schulman and the team at Pave. Ryan and Tom spent a lot of time with him before and during his time at YC, and quickly realized Pave’s tools for planning, communicating, and benchmarking compensation could be widely distributed through the venture community and through their portfolio companies.

“So we helped make some introductions within our network,” Ryan says. “He ended up absolutely nailing the strategy, spending time with a lot of the larger platform venture funds, and ended up coming out of YC and raising, I believe, $16 million. So skipping the seed round, going straight to Series A. Andreessen and Bessemer were both involved in that round, as well as Dash. And I'd say that momentum has continued.”

Keeping a competitive edge

That momentum really, really matters right now. As venture funding becomes more crowded than ever, Dash Fund has found footing as a collaborative connector. 

“Traditional Series A or Series B funds are now coming earlier. They're coming down to the seed round, or even in some occasions into the pre-seed,” Ryan says. “And so that's a big shift that we're cognizant of. At Dash, one of our strategies is to be very collaborative with the community and work with downstream funds, and help source and co-invest on deals together. And it's interesting to see these bigger funds and how they play at the earlier stage. One of the learnings for us is that Dash is becoming more than a data feed or a signal to our friends in the community and more of a co-investor at the early stage.” 

With a new fund, they’re eager to meet the next class of great fintech founders in both NYC and the Bay Area, particularly those focusing credit, APIs, consumer fintech, and under-penetrated market categories. If that sounds like you, get in touch with Ryan and Tom.

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