Illuminate Ventures: Raising a Venture Fund
It was the spring of 2010 and Cindy Padnos had just been named to Fast Company’s list of “The Most Influential Women in Technology in 2010.” Cindy had worked in the venture capital (VC) space for over a decade, launching her own firm, Illuminate Ventures, in 2009 with a focus on early-stage companies in the enterprise cloud computing space. Cindy’s portfolio of personal investments was performing well, and if she could perform as well for Illuminate, the future would be bright. Regardless, before she got to make any investments on behalf of Illuminate Ventures I, she would need to raise capital for her fund in one of the most challenging economic times in recent history. While acknowledgements by media outlets like Fast Company never hurt, such accolades were not enough to secure the $35 million that was her target. As she looked back over her professional experiences in the corporate world and ahead to the hundreds of investor meetings that lay before her, Cindy reflected that this was perhaps one of the most difficult, but most rewarding, challenges she had ever undertaken.
The case puts students in the shoes of Padnos, an experienced entrepreneur and venture capitalist (VC) who is raising her first fund on her own. Padnos’ experience is presented as analogous to the entrepreneur’s, allowing students to gain a deeper understanding of the VC as an entrepreneur, as well as how they can evaluate various characteristics of the VC to choose the right investment partner. In addition to the entrepreneurial similarities, students are provided an overview of VC as an industry, with details around the mechanics of raising a fund, the process, politics, research, and strategies involved.