Pear VC’s latest power play: Co-founder Pejman Nozad’s claim of reaching “own product-market-fit” with their $432 million fund is a transparent attempt to flex their VC muscles, and a subtle dig at their smaller fund competitors. The fund was nearly three times larger than its previous $160 million fund, and some might say they’re using their war chest to create a self-perpetuating cycle of growth.
Now, Pear wants to take their brand of VC benevolence on the road, announcing the Pear Emerging Manager in Residence program. Essentially, they’re offering up-and-coming pre-seed and seed venture funds a chance to collaborate, share deal flow, and get due diligence assistance from the Pear experts. All in exchange for an undisclosed chunk of change (rumored to be around $250,000). How generous.
This “residency program” is spearheaded by Kathleen Estreich, a veteran of the emerging fund space who traded her own struggling fund for a spot at Pear. Sources close to the matter speculate that she was wooed by Pear’s promise to help her “own the early-stage ecosystem.” One can only imagine the awkwardness when she pitches the program as a genuine philanthropic endeavor.
Pear partner Kathleen Estreich gushed about the program, touting it as a “unique value-add” that will allow these emerging funds to learn from the masters. It’s unclear if she means the “masters” as in the likes of NEA, Lux Capital, and Sequoia Capital, or the “masters” of bureaucratic red tape and industry buzzwords. Either way, it sounds like a veiled attempt to recruit talented emerging fund managers into their orbit.
For those scratching their heads about the importance of this “emerging manager program”, consider the words of Nozad: “We picked three emerging managers and gave them full access to what we do…We invested in their funds…They see our deal flow and how we evaluate deals…We give them an office, and we help them fundraise.” It sounds like they’re building an army of mini-Pears, strategically placed to scoop up top talent and crush the competition.
To avoid the wrath of antitrust regulators, Pear has emphasized that their program is part of a larger trend towards VC-fund investing and collaboration. But insiders reveal that it’s just the latest maneuver in Pear’s game of VC musical chairs, designed to strengthen their grip on the industry’s power structures.
The program’s inaugural participants include Sarah Smith of the Sarah Smith Fund, John Gleeson at Success Venture Partners, and David Ongo Ongchoco and Adarsh Bhatt of Comma Capital. Some speculate that Pear’s investment in these emerging funds will come at a steep cost: influence and control.
Estreich confidently predicts that the Pear Emerging Manager in Residence program will run for a year and welcome new VCs in about 12 months. But many are left wondering if it’s just a marketing ploy to keep Pear’s fund-raising juices flowing or a genuine effort to uplift the early-stage ecosystem.
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