Investment Thesis and Strategic Focus
Twelve Below's investment thesis is strategically focused on leading or co-leading pre-seed and seed rounds for software-enabled businesses, primarily in fintech, healthcare, and energy sectors, with a strong geographic emphasis on New York City. This focus aligns with current market trends emphasizing technological innovation and sector-specific growth.
Investment Philosophy and Market Alignment
Twelve Below seeks to capitalize on the burgeoning demand for software solutions across critical sectors. By targeting early-stage investments, they position themselves to support the next wave of technological advancements. Their emphasis on fintech, healthcare, and energy reflects sectors with significant growth potential driven by digital transformation and sustainability trends.
Unique Value Propositions Sought
The firm looks for defensible technology and breakthrough ideas, prioritizing businesses with software as a core differentiator. They are particularly interested in visionary founders capable of building category-defining companies with sustainable competitive advantages, or "moats." This approach ensures that their portfolio companies can withstand competitive pressures and maintain long-term growth.
Risk Management and Portfolio Diversification
Twelve Below employs a high-conviction, high-ownership model, making a limited number of investments to maintain significant influence and maximize returns. This strategy involves taking 10–15% ownership stakes, allowing for meaningful partnerships and strategic involvement. Their "old school" venture capital approach emphasizes deep relationships and trust, providing hands-on support beyond capital, such as market entry and team building.
Evolution and Impact
Over time, Twelve Below has refined its focus on the NYC ecosystem, leveraging local networks and expertise. This geographic concentration, coupled with their sector focus, has led to successful investments in companies like Mirror and K Health. With $108 million raised across two funds, their strategic focus has enabled them to identify and support high-potential startups early, contributing to multiple successful exits.
Portfolio Composition and Sector Expertise
Twelve Below has established itself as a prominent venture capital firm with a strategic focus on early-stage investments, primarily in the fintech, healthcare, energy, small business (SMB), and consumer sectors. Since its inception in 2021, Twelve Below has managed to carve out a niche, particularly within the New York City startup ecosystem, with a total of $160 million in assets under management, bolstered by two newly closed funds amounting to $108 million. Their investment philosophy is centered around high-conviction, low-volume investing, typically leading or co-leading pre-seed and seed-stage rounds with a target ownership stake of 10–15% per core investment. This approach has allowed Twelve Below to build strong, hands-on relationships with their portfolio companies, fostering growth and long-term value. The firm's expertise in fintech is exemplified by investments like Accrue Savings, known for its innovative "save now, pay later" model. In healthcare, their portfolio spans life sciences, medtech, and digital health, demonstrating a keen eye for software-enabled, defensible business models. Energy investments prioritize software-driven solutions, while their SMB and consumer sectors focus on technology that enhances business operations and consumer experiences. The firm's emerging interests include expanding into sectors that leverage advancements in technology to drive sustainability and efficiency, aligning with the broader industry trend towards greener solutions. In summary, Twelve Below's portfolio composition reflects a strategic concentration in key industries, with a performance-driven approach that leverages their sector expertise to foster groundbreaking early-stage companies. Their exploration into emerging sectors showcases a forward-thinking strategy that aligns with evolving market dynamics.
Investment Criteria
Twelve Below, a New York-based venture capital firm, focuses on early-stage investments, specifically targeting pre-seed and seed rounds. Their typical investment check ranges from **$1M to $3M**, although they occasionally write smaller checks starting at $25K, with a sweet spot between **$750K and $3M**. This approach allows them to secure **10% to 15% ownership** in their core investments, aligning with their strategy of high conviction and high ownership. ### **Investment Criteria and Strategy** #### **Investment Stages** Twelve Below's primary focus is on the pre-seed and seed stages. This early-stage focus allows them to partner closely with founders and provide substantial support, both strategically and operationally, to help scale the startups effectively. #### **Geographical Focus** The firm predominantly invests in **U.S.-based startups**, with a strong emphasis on **New York City teams**. This geographic focus aligns with their strategy of building deep, local relationships and leveraging the dense entrepreneurial ecosystem of New York City, a major hub for venture capital activity. #### **Sector Preferences** Twelve Below targets a diverse range of sectors, including fintech, healthcare, energy, enterprise services, consumer products, e-commerce, education, and the future of work. They prioritize **software-enabled businesses** with scalable models and significant market potential, typically targeting markets exceeding **$1B**. This sector diversity ensures that Twelve Below can capitalize on emerging trends across multiple industries, aligning with their strategy of investing in breakthrough ideas and courageous founders. ### **Strategic Alignment and Evolution** Twelve Below's investment strategy emphasizes **trusted, long-term partnerships** with founders, leading or co-leading rounds to provide significant support. Their investment philosophy is rooted in an “old-school” VC approach, favoring small fund sizes and deep founder relationships. Over time, their investment criteria have remained consistent, reflecting a steadfast commitment to their core principles. In summary, Twelve Below's investment criteria are designed to align with their strategic focus on early-stage, high-potential startups in key sectors, particularly within New York City. This approach enables them to build strong partnerships and support innovative businesses with the potential for significant market impact.
Track Record and Notable Exits
Twelve Below, a venture capital firm based in New York City, has quickly established a formidable track record since its inception in 2021. Spearheaded by founders Taylor Greene and Byron Ling, the firm focuses on pre-seed and seed investments, primarily targeting fintech, healthcare, energy, and consumer sectors. Despite being relatively new, Twelve Below has already made a mark with several notable exits in its portfolio. ### Notable Exits and Financial Outcomes While specific details on individual exits remain scarce, Twelve Below is recognized for its ability to identify and nurture high-potential opportunities that lead to successful IPOs and acquisitions, particularly in fintech and healthcare. Their strategic approach has resulted in substantial financial outcomes, which have significantly bolstered the firm's reputation. ### Contribution to Firm Reputation and Growth Twelve Below has seen over 60% of its portfolio companies secure additional rounds of financing, indicating a strong validation of their investment choices by other investors. This success is reflected in their substantial growth, with the firm managing $160 million in assets as of November 2023. ### Patterns Among Successful Exits A common thread among Twelve Below's successful exits is their focus on sectors with significant growth potential and their strategic involvement in portfolio companies. The firm's approach to leading or co-leading funding rounds with a high conviction and aiming for substantial ownership stakes has proven effective. As Twelve Below continues to grow, their strategy and early successes suggest a promising trajectory, solidifying their place in the venture capital landscape. This image metaphorically reflects the firm's ability to uncover and leverage hidden potential in emerging companies, contributing to its impressive track record and success.
Team Composition and Decision-Making
The Twelve Below team is a specialized partnership excelling in early-stage venture capital investments. Their core investment team comprises seasoned professionals with a wealth of experience:
- Byron Ling (Partner): With a decade of experience at Primary and Canaan, Byron has held board roles at prominent companies like Ro, Papa, K Health, and Mirror (NASDAQ: LULU).
- Taylor Greene (Partner): Formerly a partner at Lerer Hippeau and Collaborative, Taylor has board experience with Allbirds (NASDAQ: BIRD), Step, Mirror, and Leaflink.
- Allison Kiang (Investor): Brings a strategy and customer success background from Komodo Health and holds a neuroscience degree from Columbia University.
- Tamar Vidra (Investor): Previously an investor at Red Sea Ventures, Tamar has an undergraduate degree from Columbia University.
The diverse backgrounds of Twelve Below’s team members contribute significantly to their robust decision-making process. Byron and Taylor’s extensive board experience provides strategic insight, while Allison and Tamar’s academic and professional backgrounds offer analytical depth and a fresh perspective. This diversity fosters a comprehensive evaluation of investment opportunities, particularly in fintech, healthcare, energy, SMB, and consumer markets.
Decision-Making Framework
Twelve Below employs a distinctive decision-making framework characterized by:
- Relationship-Driven Philosophy: Emphasizing trust and strong relationships with entrepreneurs, they focus on high conviction in a select number of investments.
- Selective Investments: With a preference for leading or co-leading pre-seed and seed rounds, they maintain significant influence and alignment with founders.
- Sector-Specific Focus: Their decision-making is both sector-specific and founder-centric, ensuring targeted and effective investment strategies.
- Collaborative Partnership: Acting as a “first true partner” to founders, they provide mentorship and strategic guidance, empowering founders to achieve their potential.
With a decade-long history of successful collaborations, Twelve Below’s decision-making is informed by past successes and failures, ensuring a mature and insightful investment approach.
Value-Add Capabilities and Support
Twelve Below offers a comprehensive range of value-add capabilities tailored to the needs of pre-seed and seed-stage companies. The firm emphasizes strategic partnership, founder coaching, and hands-on company building, providing personalized support to founding teams.
Resources and Strategic Guidance
The firm's key resources include personalized founder support, where Twelve Below acts as a strategic advisor, offering guidance on company strategy, recruiting, and decision-making. This support is highly personalized, addressing each company's unique challenges. Moreover, Twelve Below's extensive network access facilitates key hires and talent acquisition, leveraging the partners' deep NYC ecosystem connections.
Examples of Active Contribution to Growth
Twelve Below's impact is evident as over 60% of its portfolio companies have secured follow-on capital. This success is attributed to the firm's high-engagement model, where they typically lead or co-lead investment rounds, acquiring significant ownership stakes (10-15%). This approach fosters deep involvement and long-term partnership, reflecting "old school" venture capital principles. The partners, Taylor Greene and Byron Ling, bring substantial expertise from prior roles at Collaborative Fund, Lerer Hippeau, Canaan, and Primary Venture Partners, enhancing the firm's ability to drive growth.
Unique Programs or Initiatives
Twelve Below stands out for its rapid, accessible support, being the "first call or text" for founders facing challenges. The partners are known for their candid, tactical feedback, helping founders identify blind spots that enhance company value. Trust-based relationships are a cornerstone of Twelve Below's approach, positioning them as the earliest believers in founding teams and providing empathetic support through early-stage uncertainties.
In summary, Twelve Below's unique value proposition lies in its combination of deep founder empathy, high ownership, and intensive mentorship, enabling breakthrough, software-enabled companies to achieve their full potential.
Application Process and Timeline
While specific details about the Twelve Below application process are not publicly available, entrepreneurs can generally expect a process similar to other venture capital firms. Below is a typical outline of steps involved:
Steps in the Application Process
- Initial Submission: Entrepreneurs typically begin by submitting a pitch deck or project information through an online form or email.
- Initial Screening: The Twelve Below team conducts an initial review to assess the project's alignment with their investment focus.
- Meetings: Selected entrepreneurs are invited for meetings to discuss their business model, market opportunity, and team dynamics.
- Due Diligence: A thorough due diligence process follows, where financials, market potential, and team capabilities are evaluated.
- Final Decision: Based on the findings, Twelve Below makes a final investment decision.
Evaluation Criteria and Timeline
Twelve Below evaluates potential investments based on several key criteria:
- Market Opportunity: The size and growth potential of the target market.
- Team Strength: The experience and expertise of the founding team.
- Innovation and Differentiation: The uniqueness of the product or service.
- Business Model: Viability and scalability of the business model.
The timeline for the investment process can vary but typically spans a few months from initial contact to final decision, depending on the complexity of the due diligence process.
Tips for Securing Funding
- Prepare a Compelling Pitch Deck: Clearly articulate your value proposition, market opportunity, and competitive advantage.
- Research Twelve Below's Investment Focus: Tailor your pitch to align with their interests and past investments.
- Demonstrate Traction: Highlight any market validation, customer acquisition, or revenue milestones.
- Build a Strong Team Narrative: Showcase the expertise and complementary skills of your team.
- Be Transparent: Openly discuss challenges and how you plan to address them.
For the most accurate and current information, entrepreneurs are encouraged to visit the official Twelve Below website or contact them directly.
Portfolio Company Testimonials
Twelve Below is recognized by its portfolio companies as a supportive and high-impact early-stage venture capital partner. Known for deep engagement and practical guidance, founders consistently highlight several key aspects of their experiences:
Experiences of Portfolio Companies
Portfolio companies describe Twelve Below as being in their corner "since day zero," providing steadfast commitment and focus on growth beyond expectations. Founders mention the firm's ability to deliver pragmatic, tactical, and actionable advice, making them the "first call" in critical moments such as strategic pivots and key hires.
Impact of Support on Growth
Twelve Below's support is credited with not only driving business results but also enhancing founder conviction to build generational companies. By identifying blind spots and addressing challenges directly, Twelve Below helps make businesses "significantly more valuable."
Illustrative Quotes and Anecdotes
Founders praise Twelve Below’s network, accessibility, and personal attention, often stating they would choose the firm "again 10/10 times." Byron and Taylor, the partners, are described as "exceptional" and "collaborative," consistently focusing on founder success. One founder shared, "Their strategic support combined with real empathy for the founder experience goes beyond capital and traditional investor relationships."
These testimonials underscore Twelve Below's role as a trusted, hands-on partner, distinguished by deep business understanding, fast and effective responses, and genuine commitment to entrepreneur success.
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Twelve Below's market positioning as a venture capital firm is distinctively crafted around its focused approach to investing in early-stage startups, particularly in the NYC ecosystem. By concentrating on pre-seed and seed rounds, the firm emphasizes personalized, high-conviction investment strategies that differentiate it from broader, more transactional VC firms. ### Unique Selling Points and Advantages Twelve Below's unique selling points lie in its targeted investment model and deep-rooted expertise in the NYC startup scene. The firm aims for significant ownership stakes (10%-15%) in a select number of high-potential startups, allowing for intensive involvement and support. This approach is bolstered by the partners' extensive local networks and experience, which provide a robust foundation for identifying and nurturing promising startups. ### Evolution of Market Positioning Twelve Below has evolved its market positioning by consistently honing its focus on early-stage investments while leveraging its NYC-centric expertise. This evolution has been marked by a commitment to building trust-based relationships with founders, reminiscent of traditional venture capital practices. ### Impact on Attracting Investment Opportunities Twelve Below's strategic positioning has significantly enhanced its ability to attract high-quality investment opportunities. By maintaining a small fund size and focusing on meaningful ownership, the firm ensures substantial engagement with its portfolio companies. This approach, combined with its NYC-centric expertise, has allowed Twelve Below to become a preferred partner for ambitious founders at the formative stages of company building, thus securing a steady pipeline of promising investment prospects.Contact and Next Steps
Twelve Below is a venture capital firm based in New York, specializing in pre-seed and seed investments across various sectors including fintech, healthcare, and consumer software. Below is the essential contact information and guidance for entrepreneurs interested in partnering with the firm.
Contact Information
- Email: hello@twelvebelow.co
- Address: 145 Hudson St, Ste 5B, New York, NY 10013, US
- Phone: +1 (917) 740-XXXX
- Key Contact: Allison Kiang (Investor) - Email: a******@twelvebelow.co, Phone: (510) 456-XXXX
Next Steps for Entrepreneurs
Entrepreneurs interested in partnering with Twelve Below should prepare a concise pitch deck highlighting their business model, market opportunity, and team. Submit your pitch via the general contact email for the fastest response. Ensure your submission aligns with Twelve Below's investment focus on software-enabled businesses in fintech, healthcare, energy, SMB, and consumer sectors.
Guidance for Initial Meetings
Prepare for initial meetings by clearly articulating your vision, demonstrating market understanding, and showing traction or a path to traction. Be ready to discuss your business’s defensibility and potential for growth. The firm values "courageous founders with breakthrough ideas," so emphasize innovation and strategic thinking.
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