Foundry Group is shutting down and won't raise another fund

Foundry Group, an 18-year-old venture firm with nearly $3.5 billion in assets under management, has quietly decided to shut down and not raise any more funds. The move was unexpected considering that the firm announced a $500 million fund last year.

Boulder, Colorado-based Foundry first announced that its current fund would be its last on January 19. The venture firm had been investing since 2007, according to Crunchbase, and had announced the $500 million fund, Foundry 2022 — its eighth — in May of 2023.

Over the years, Foundry has invested in more than 200 companies and nearly 50 venture firms, according to co-founder and partner Seth Levine. It had backed the likes of Fitbit, Zynga and AvidXchange, among others.

The firm maintains the decision was the plan all along. When TechCrunch reached out to Levine, he declined to directly comment on the firm’s decision to shutter, and instead pointed to blogs he’d written. 

In one blog, he acknowledged that the firm’s decision to completely shut down was an unusual one.

He wrote: “While VC firms rarely make decisions like this, it’s precisely what we planned to do when we started Foundry in 2006. From our founding, we intentionally decided not to build a legacy or generational firm — one meant to live beyond the tenure of the founding partners. Instead, we intended to focus on the work of investing, re-evaluating each potential new fund as our fundraising cadence required…We’ve had several moments over the last decade where we thought the fund we were raising might be our last. Each of those times, after reflection and discussion, we decided to raise another fund. But not this time. Foundry 2022 will be our last fund.”

In a personal blog, Levine noted that he began sharing publicly in January of 2023 his plan for the 2022 Foundry fund to be his “last as a partner at Foundry.”

He added: “I didn’t make a big announcement about it – just started mentioning it in situations where it seemed natural to do so…At the time, I wasn’t sure if we would make the same decision for Foundry as a whole, but since I knew my intentions, I thought it would be appropriate to be open about it. After more discussions internally and careful consideration, we decided that the 2022 fund would be Foundry’s final fund as well.”

Levine continued: “Choosing not to be a legacy firm is one way we’ve challenged norms in the venture industry and just one of many things we take pride in as we reflect back upon our time building Foundry. We’ve loved experimenting with the venture model, whether that was building the first VC AngelList syndicate, investing in markets across the country where venture capital was less prevalent, being among the first GPs to institutionalize a fund investment practice, and attempting to bring transparency, openness (and hopefully some humor) to the venture industry.”

What’s next

Foundry still has 33% to 40% left out of that fund to invest, Levine told the Denver Business Journal. In his blog, Levine said specifically the firm plans to “continue to lead Series A and B financings” out of the fund.

The move raises questions for its portfolio companies. Foundry says it will continue to invest out of its newest fund, but for founders, accepting capital from a firm that is winding down is a risk and could make securing follow-on funding that much harder. 

Meanwhile, Levine maintained to the Denver Business Journal that he expects all the funds to be deployed by around 2026 and that the firm will then “still work with businesses in which it has investments.”

In his personal blog, Levine wrote: “We raised our last Foundry fund at a fortuitous time, just as the markets cooled off (it’s a great time to be investing), and we have another two years or so of new investments to look forward to. Not to mention a decade or longer of work with the portfolio after that.”

The investor also told the Denver Business Journal that he would “be with Foundry until its work is completely done,” adding that co-founder Brad Feld and partner Chris Moody “plan to do the same.” He could not say what the other partners would “get up to in the next few years.”

In her own blog post Foundry partner Jaclyn Hester wrote that she was “focused on supporting our portfolio and leading new early-stage rounds as we deploy the remainder of the 2022 fund over the next few years.”

Foundry is not the only venture firm to recently unexpectedly announce it was winding down. In December, Boston-based OpenView abruptly announced it would stop investing in new companies less than a year after raising $570 million for its seventh fund.

Update: This article was updated post-publication to reflect there no departures at the firm as a result of the decision – voluntary or otherwise, according to Levine. It also was updated to include further details behind the firm’s decision not to raise any more funds.