Sarah Smith, founder and managing partner of the eponymous Sarah Smith Fund, announced Thursday the final closing of a $16 million Fund I.
Smith launched her fund in 2022 after spending seven years as an investor with Bain Capital Ventures and is a solo GP. She said she’s “stunned” by what AI can unlock for firms like hers, solo and next generation. “I can’t imagine doing venture any other way now,” she said. “While I believe company building still requires a team effort, I believe early-stage investing is best done solo.”
She appreciates how she can make fast decisions that don’t require committee approval. She’s also taken to using AI to help her throughout this journey.
“Every day I’m dreaming of more ways to support my founders, combining my experience and network with AI,” she said.
“For example, just last week, I led a values articulation project for one of my founders,” Smith continued. “It took me two to three hours of time when it previously would have taken 20. When you have an AI-native firm that can deliver 10x value in 1/10 of the time, you can scale up a large portfolio with just one person.”
She said she previously had a $3 million rolling fund and spent a year raising this Fund I. Fund I hopes to invest in 50 companies and has already backed 17, with the average check size standing at $250,000. Limited partners include Pear VC, Ulu Ventures, and Verdis Investment Management.
Fund I focuses mainly on startups in the Stanford ecosystem (Smith is an alumnus of the university). She has research there, too, to back up her focus. “It has produced more unicorns and exit value than any other university in the world,” she said, citing the research done by Ilya Strebulaev that shows that 11% of unicorn founders have an association with Stanford. “While much of the legacy Sand Hill firms spend most of their time up in SF, 45 minutes north, I’m doubling down on Stanford campus.”