The General Partnership, a VC firm focused on “sweat equity,” raises $300 million for second fund

• TheGP is an exception to that rule, and was rewarded by LPs in a brutal fundraising environment for emerging managers.

Catch up quick: TheGP’s predecessor firm was formed in 2018 by Dan Portillo, who had previously launched a group at Greylock that focused on non-exec hiring for portfolio companies. It was fairly unusual at the time, although has since been copied by many of Silicon Valley’s top firms.

• Phin Barnes, a former partner at First Round Capital, joined in 2021. The firm was renamed and raised $240 million for its debut fund.

How it works: TheGP’s sweat equity agreements include specific statements of work, which can include everything from hiring to engineering to go-to-market services.

• For earlier-stage companies, such contracts are usually married to traditional fundraising rounds. For later-stage companies, or “breakout” companies in TheGP parlance, the services deal usually comes first (usually at the most recent VC valuation) and traditional capital sometimes comes later.
• Barnes says that 70% of TheGP’s portfolio companies have both types of arrangements, while the firm currently has around 30 employees.

The bottom line: “The goal has been to unbundle venture services from venture capital, because you’re very limited in what you can do from fund fees,” Portillo explains. “We took what was a cost center for every other VC fund and turned it into a profit center.”