Solo GP Nichole Wischoff raises $20M fund backed by Peter Thiel to invest in ‘unsexy businesses’

Despite shrinking investment into startups in 2022, venture capital funds of all sizes are still being raised. However, not many of these are led by solo general partners (GPs), and although that trend is on the rise, even fewer are led by women or people who don’t come from venture capital.

The above makes Nichole Wischoff something of an exception: Her solo venture capital firm Wischoff Ventures closed a second fund of $20 million, a sizable increase from her first $5 million fund. Her target is to invest in 25 to 30 U.S. startups at the pre-seed or seed stage.

Wischoff purposely capped her previous fund because she was still working full-time until March as a startup operator, she told TechCrunch. Now that she is solely dedicated to her fund, she plans to write larger checks of up to $1 million, up from a previous $300,000 cap.

This new fund will also be “leaning in heavily on B2B,” Wischoff said. “I tell people I invest in unsexy businesses!”

She’s particularly interested in companies that apply an AI/ML or embedded fintech component to large legacy industries. “However, I have a very big soft spot for industrial automation. Everything that makes up the majority of the GDP in the U.S., I am very interested in.”

Beyond fintech

Wischoff’s existing portfolio includes companies such as Coast Pay, Loop, Nuvo, Trustlayer and Vesta — a heavy fintech leaning owing to Wischoff’s background. However, the second is set to broaden this scope. “I know fintech well, but I don’t want to be pigeonholed into fintech,” she said.

Before becoming a solo GP, Wischooff was an early employee at lending platform Blend Labs, which went public in 2021, and part of the founding team at One Finance, a neobank acquired by Walmart earlier this year.

One’s acquisition resulted in a “huge financial outcome” for Wischoff, which led her first into angel investing while working at construction fintech Built before launching her own fund with external LPs.

Backers of this new fund include Peter Thiel, Lee Fixel, Yahoo co-founder Jerry Chen, Bain Capital, Byers Capital, Cendana Capital, Crossover, Insight Partners and others.

Several of these angels and funds had also backed Wischoff’s first fund, but the profile of her limited partners (LPs) has evolved over time.

According to a summary of an analysis that Wischoff conducted, family offices now account for more than half of her second fund, compared to about a third of her first fund. For instance, her most recent fund is backed by Four More Capital, the family office of late American industrialist and philanthropist Henry Crown.

“I wish VCs were more open about their LP construction,” Wischoff said in an email. In the same transparency spirit, she added that it took her seven months to raise her second fund, compared to two months for the first one.

The first investment out of her second fund went to Stell, a engineering-focused startup founded by two women with a background in aerospace and defense, whose goal is to help hardware engineers and buyers “reduce defects and get parts faster.”

If Wischoff’s next investments are anything like Stell, her portfolio might be on track to support what she describes as “American dynamism … the real one” — a topic we plan to explore with her shortly in a separate interview.