Notation III & Notation Moonlight

The headlines:

  • We raised Notation III, a $42M fund to back the best product-obsessed teams at the pre-seed stage. We continue to focus on investing in teams based in NYC, but selectively invest in other geos too.
  • Today we’re launching Notation Moonlight— a new program, community, and set of resources for future founders, starting in NYC. You can apply HERE.
Team Notation — Katherine Wu, Alex Lines, Nicholas Chirls

Some background:

A little over six years ago, Alex and I began to moonlight as VCs, trading notes on what would ultimately become Notation. We spent countless hours debating different iterations, strategies, our motivations and values, our hopes and dreams. A year later, we announced Notation I, the first dedicated pre-seed fund in NYC, to back founders that were never “too early.” It’s easy to forget, particularly given the environment today, that a NYC-focused pre-seed fund in 2015 was an unusual proposition. Our thesis then was simple, although not yet proven:

  • NYC would become a sustainable technology ecosystem producing world-class technical talent and startups at scale.
  • NYC needed more capital — particularly, small, focused funds that specialize in partnering with founders at the very beginning as the traditional venture firms were getting larger. We called this “pre-seed,” and were frequently met with confusion and smirks. Perhaps, Notation I was a touch early to market ourselves 🙂

Fast forward a few years —after almost two funds fully invested and performing at the top of their vintages, more than 50 portfolio companies, 100+ founders who inspire us to work for them day in and day out, countless lessons learned, an amazing community powering Notation — we still believe the thesis above to be more relevant than ever, albeit slightly less controversial than it once was.

What’s next?

In 2020, the world irrevocably changed. The combination of a global pandemic, the accelerating and long-overdue support of the BLM movement, failed leadership at multiple levels, among other complicated challenges, has given us new perspective on what it means to run a venture capital fund, allocate capital, and support entrepreneurs. We take this responsibility seriously, and believe now more than ever that our capital needs to be invested in founders who will responsibly remake our society of tomorrow. Towards the beginning of the pandemic, we closed $42M for Notation III to do just that.

We will continue to focus on investing in pre-seed product teams building capital-efficient software companies based in NYC — this has been (and perhaps always will be) our bread and butter. But it’s not representative of everything that we do, and as we’ve grown and learned, we also know it’s important to make exceptions, to know when to break the rules, and so we’ve opportunistically invested in ecosystems outside NYC like Toronto, LA, Boston, and Atlanta, as well as several non-software companies too. Katherine Wu, who joined us as our first full-time member of the team outside of myself and Alex, has been particularly integral in expanding our areas of interest, and we expect these to continue to evolve as we grow our team and firm in the years to come.

Notation Moonlight — Supporting future founders

As we look further into the future, we believe that another part of Notation’s responsibility to the community is in supporting the next generation of founders, who will remake society as we know it but haven’t yet begun. Part of the draw of Silicon Valley lies in its deep entrepreneurial network, culture and resources — those who want to start a company have long followed the proverbial path to Sand Hill Road and moved out west in order to access the network and capital that has allowed them to build a startup from ground zero. In this regard, New York still has a long way to go.

So as part of Notation III, we’re announcing Notation Moonlight, an 8-week program, network, and set of resources for future founders, folks thinking about starting a company one day but haven’t yet begun. In the first program, we’ll focus on founders here in NYC, but may expand to other geographies over time, as we’ve done with Notation itself. If you’re interested in applying to our inagural program, you can apply HERE until August 28th. The ultimate goal for this program is to identify, encourage, and partner with future founders in NYC to help them better prepare for the journey of starting a company. The program is completely free and we don’t take equity — it’s our responsibility to help level the playing field for the next generation of founders.

It feels like just yesterday that Alex and I were moonlighting in our spare hours, dreaming up Notation, and yet five years later, we’re still in the very early days of what we believe it can become. Our hope is that we will make an enduring impact on how companies are created and built, both here in NYC and beyond. There are too many people to thank for putting us in business — from our LPs, small and large, who trust us with their capital; to the many founders who trust us to be their partners, through thick and thin; to our families for supporting all of our entrepreneurial dreams— we’re grateful and privileged to do this work. Now back to it, there’s so much still to do…

Notation III & Notation Moonlight was originally published in Notation on Medium, where people are continuing the conversation by highlighting and responding to this story.