Tim Chen, solo VC at his firm Essence VC, just closed his fourth fund, a fresh $41 million, without even trying. Limited partner investors (LPs) were so eager to invest, they pre-empted it, he told TechCrunch. He hadn’t even time to generate a pitch deck.
True, $41 million might not sound like much in this age of multi-billion venture firms and solo VCs like Jack Altman (who just raised his second giant fund, at $275 million). But that’s mainly because Chen didn’t want to take on more. It’s an upsize from Chen’s 2022 third fund of $27 million (which was up from his $5 million second and $1 million first funds).
Chen hadn’t begun new fundraising activity because, until last month, he was still investing out of his third fund, which has now wrapped. But limited partner investors had begun whispering about him amongst themselves after one of his portfolio companies from his second round, Tabular, was acquired by Databricks for about $2.2 billion in 2024.
“That basically, pretty much returned our whole fund,” Chen told TechCrunch, and put him “on the map,” as he described. Suddenly, LPs were hearing his name everywhere: on cap tables, mentioned by other VCs, founders quoting his advice. They wanted in.
In part, that’s because Chen specializes in developer-tool and infrastructure startups at the earliest stages, a segment growing in popularity in this age of AI.
Chen cut his teeth as a software engineer, earning street cred from his time as one of the earliest employees at Mesophere, a one-time hot open source cloud infrastructure startup backed by Hewlett Packard Enterprise and Microsoft; then he co-founded an “AIops” startup called Hyperpilot and sold it in an aqui-hire to Cloudera in 2018.
In 2019, Chen began angel investing and discovered he had a knack for it, backing other deeply technical startups like Jasper, FlatFile and MotherDuck. “I really enjoyed it. Founders kept loving me, kept telling all their friends.”
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Looking for a new career, he thought venture was it, so he interviewed at several of the big Sand Hill Road firms, only to be rejected by them all.
“No one wanted to hire me,” he said. “I’m an engineer and small-exit founder. I don’t think that’s a typical profile.”
Jake Zeller, a friend of his who worked at Angel List (and is now out at his own fund) told Chen not to give up and talked him into launching his own fund on that platform.
“He told me, Tim, I think you could go raise a $1 million Fund 1 and try it out. I said, ‘Wow. I didn’t know that was possible.’ So he gave me a pitch deck template,” Chen recalled, and through introductions, Chen landed LPs like Bain Capital.
Famed infrastructure and AI investor Martin Casado of Andreessen Horowitz came in as an LP in later funds. And then long-time fund-to-fund investor Michael Kim of Cendana Capital invested. After Tabular sold, Kim told him that Cendana had already reserved $15 million for his fourth fund. Chen was shocked.
He was also getting calls from others, some who were previous investors like Sapphire, General Catalyst and new individuals. “I wasn’t fundraising. I didn’t know how much to raise at all. I was just like deploying and vibing,” he said.
When StepStone pushed him to send LP documents so they could wire the money – and wanted to bring others in – he opted to get his act together and do the fund immediately. AngelList basically did his fundraising documents for him. ane he settled on a reasonable bump from his last fund, moving cautiously because he still considers himself a beginner at venture.
Fund IV backers wound up including names like Tomasz Tunguz (former Redpoint, now of Theory Ventures ) and Ethan Kurzweil (formerly Bessemer, now of Chemistry VC).
He credits his growing reputation to his background as an infrastructure engineer. “There’s so few VCs that look like me,” referring to his deeply technical background with software infrastructure.
While that wasn’t appealing for the big firms, it’s been a boon for his solo investing. Rather than a typical VC focus on traction and sales funnel, Chen helps early founders figure out how to build their products.
For instance, he invested in a company called ComfyUI which was, at the time, working on a consumer visual AI product based on the open source Stable Diffusion model. After investing, Chen advised the founders to become a developer platform of the models they were fine-tuning.
Comfy-org just raised a $17 million Series A to compete with the big closed source model makers. And their blog post publicly thanks Chen for helping them craft their strategy.
