Asymmetric Capital Partners raises $137 million second fund, beating ZIRP-era odds | Fortune

In an era of billion-dollar AI funding rounds and venture capital excess, Asymmetric Capital Partners has successfully closed its second fund at $137 million—surpassing its $125 million target and defying statistical odds that see only 8% of 2021-vintage VC funds raise larger second vehicles. The achievement stands as a testament to the firm’s contrarian approach to startup investing, which prioritizes capital efficiency and founder outcomes over asset accumulation.

Managing Partner Brian Biederman, who previously co-founded and led Catalant, brings an operator’s perspective to venture investing that challenges conventional VC wisdom. “Excess capital covers up intellectual laziness,” Biederman told Fortune. “The best companies never burned any capital because they were rigorous about finding ways to make people pay for their product.” This philosophy aligns with emerging trends in infrastructure investment that emphasize sustainable growth over rapid scaling.

The firm’s success comes amid a challenging environment for emerging managers, particularly those who launched during the 2021 funding boom. According to PitchBook data, the transition from first to second fund represents the most difficult hurdle for new venture firms, with the 2021 cohort facing particularly steep challenges given subsequent market corrections.

Founder-First Philosophy

Biederman’s investment thesis extends beyond financial metrics to encompass emotional and psychological factors. “The emotional reason is that we want our founders to have tremendously good personal outcomes,” he explained. “VCs win when founders burn a lot of capital. Founders win when they don’t. So it’s important to me that when our founders have successes, they go home with a life-changing result.”

This founder-centric approach manifests in Asymmetric’s deliberate capital strategy. Despite receiving offers for $50-75 million checks during the fundraise, Biederman maintained discipline, telling potential investors: “I don’t think you understand, I can take, max, 20 or 25 of new capital.” The firm maintains that having “the correct amount of money” rather than the largest possible fund is essential for generating optimal returns.

Investment Strategy and Portfolio

Asymmetric focuses on pre-seed through Series A investments in vertical software and healthcare IT, with check sizes ranging from $2 million to $10 million. The firm’s portfolio includes companies like Torc, Counsel Health, and Eagle Electronics, and extends to industry consolidation plays such as Cabana, which aggregates pool services businesses in San Diego.

The first fund has already generated three successful exits—Torc, EvolutionIQ, and Zorus—all through acquisitions. This track record has helped the firm grow its assets under management to $240 million despite maintaining a lean team of just five professionals based in New York.

This disciplined approach to portfolio construction reflects broader shifts in industrial technology investment strategies that prioritize sustainable business models over speculative growth.

Relationship-Driven Deal Flow

Asymmetric’s distinctive approach extends to its sourcing methodology. According to LP Jim Millar, Yale lecturer and former managing director of Princeton University Investment Company, “Asymmetric cultivates founder relationships one to two years before an initial investment, and 80-90% of their deal flow comes from referrals.”

This patient, relationship-focused strategy contrasts sharply with the transactional nature of much venture capital investing. The firm maintains a small LP base that includes nine family offices with decade-long relationships with Biederman, reinforcing the alignment between capital sources and investment philosophy.

The Founder Experience

Biederman’s operational background informs his empathetic approach to founder challenges. “Being a founder is being in a dark room or being blindfolded in a room,” he analogized. “You know that there’s a fire in the room. You only have one bucket of water, and you have to throw the water onto the fire, not knowing where the fire is. You also know that if that bucket of water doesn’t put out the fire, you might not get another one.”

This understanding of the founder experience informs Asymmetric’s hands-on partnership approach, which emphasizes strategic guidance over pure capital injection. The firm’s methodology demonstrates how strategic partnerships in technology infrastructure can create sustainable value beyond financial transactions.

Industry Implications

Asymmetric’s success with its second fund raises questions about prevailing venture capital orthodoxy. Biederman argues that the industry has “lost the plot in some respects,” with too many VCs prioritizing asset gathering over returns and writing off struggling startups too quickly.

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“People who haven’t sold for a tech company sometimes get like ‘Oh, this entrepreneur is fantastic’ or ‘The ideas are smart,’” Biederman observed. “No, people buy things that improve their lives.” This focus on genuine customer value rather than theoretical cleverness represents a back-to-basics approach that appears to be resonating with limited partners.

The firm’s performance suggests that AI-driven productivity enhancements in venture capital operations may be less important than fundamental investment discipline and founder alignment.

As Asymmetric deploys its second fund, the venture industry will be watching to see whether its capital-efficient, founder-focused approach can continue to deliver outlier returns in an investment landscape increasingly dominated by mega-funds and massive funding rounds.