A pair of VCs who invested in Nest and The Honest Company explain why they raised a $262 million fund to invest in young startups

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Defy Ventures new Fund II will focus on high-ownership opportunities with early stage companies in consumer and enterprise industries.

Defy Ventures closed its $262 million Fund II to invest in early-stage startups.

As larger late rounds become more common, Defy Ventures aims to invest between $3 million and $10 million each in earlier-stage companies, taking a sizable chunk of ownership.Defy Ventures announced today its second fund, with $262 million committed to invest in early stage companies. Firm cofounders and industry veterans Neil Sequeira and Trae Vassallo are looking to capitalize on their successful first fund, which also focused on early stage investments, with the new influx of capital from new and existing limited partners.

The reason for focusing on Series A companies, the partners say: It's less risky than investing in seed-stage startups, because they've at least started rolling out an actual product or service, even if all the particulars aren't quite in place yet. At the same time, the company is young enough that even with a relatively modest investment, the firm stands to make a tidy profit if and when a startup goes really big.

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