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Koch-backed Trust Ventures Nears $70M First Close Of Targeted $100M Fund

Trust Ventures, an Austin-based venture firm backed by Charles Koch, in the next week will have raised $70 million in the first close of a targeted $100 million fund.

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Founded in January 2018, Trust Ventures is vocal about only investing in startups that it believes offer services that “will greatly improve society but face significant public policy barriers that stifle growth.”

In particular, the firm works to break down regulations that it views as outdated or that “protect established corporate interests.”

Trust Ventures co-founder Salen Churi believes that society’s greatest challenges are not just technological, “but also require addressing a complex system of public policy barriers that too often serve established companies rather than innovators and consumers.”

For example, the firm operates under the premise that entrepreneurs can drive social impact in areas like affordable housing, healthcare, and zero-emission energy, but struggle to do so because “these are often the areas with the highest barriers.”

“We look for companies that have tremendous potential for societal impact, and are in a position to get products and services to people who need them the most, but need help navigating through a complex maze of policy challenges,” Churi told Crunchbase News. “We are not looking for ‘nice to haves,’ but ‘need to haves,’ or companies that can touch hundreds of millions, or billions, of lives.”

How It Operates

Trust Ventures closed its first fund, in which it raised $35 million, in June 2018. So far it has written about 70 percent of its “first checks” out of that fund with 30 percent expected to be deployed by year’s end, according to Churi. The firm allocated 50 percent of its first fund for follow-on investments in its portfolio companies. Trust plans to implement the same strategy with its second fund, reserving half for “first check” and half for follow-on investing with an average first check investment of between $3 and $4 million into about 12-15 companies.

“We want to make sure we have dry powder to double down on our winners,” Churi told me. “So that’s why we reserve a healthy follow-on.”

So far, the group has made investments across a range of industries, including energy, food, insurance, and healthcare. Portfolio companies include: Sunnyvale, Calif.-based Oklo, which has developed  next generation fission reactor technologies that it says can supply inexpensive zero-emission energy and run on fuel recycled from existing reactors; ICON, an Austin-based construction tech company that makes “durable, dignified and affordable housing” by using proprietary 3D printing robotics, advanced materials and software (which we covered here), and Emergy Food, a Boulder-based startup offering a plant-based meat alternative produced “using a sustainable, environmentally-friendly production method.”

Trust Ventures was founded in January 2018 by Churi and Brian Tochman, who was also the co-founder, president and COO of Austin-based Kasita, which makes modular homes and apartments.

Churi, a former law professor at the University of Chicago and founder of its Innovation Clinic, also previously advised low-income entrepreneurs on overcoming public policy challenges at the Institute for Justice. This included helping successfully advocate to allow street vendors to operate in Chicago. Tochman also once served as vice president of mergers and acquisitions for Platinum Equity, a Beverly Hills, Calif.-based private equity fund.

Blog Roll Illustration: Li-Anne Dias

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