Zal Bilimoria has been a solo complementist since 2018 and has no plans to stop. And he attributes this decision to former colleague David Lee, who co-founded Refactor Capital with him in 2016.
He said he would not have been able to start the Burlingame-based company if it weren’t for Lee, a former Google executive who led Ron Conway’s seed-stage enterprise capital fund, SV Angel, for several years. Together, they raised a seed fund of $50 million. When Lee decided to retire in 2018, he wanted Bilimoria to stay Refactoring as an independent family doctor.
Being an independent GP means having full authority to make your personal investment decisions, while also having full responsibility for things comparable to fundraising. And while this level of freedom may sound great, it also means there are no vesting partners to push and force VCs to analyze investment decisions in ways that won’t have occurred to them. Even though business angels do this, they spend their very own money. The sole investor invests on behalf of the limited partners, who trust that this person will make their money grow.
“He convinced me to stay on my own, and this was at a time when stand-alone primary care physicians were not in vogue,” Bilimoria told TechCrunch. “He told me that since I loved my independence and power and loved spending time with the founders, I should stay alone. I was very nervous, but the more I thought about it and talked to other people, I realized this was what I wanted to do and I haven’t looked back. If I can help it, I will be an independent GP for the rest of my career.”
Bilimoria is not without its own unique lineage. Prior to joining Refactor, Bilimoria spent almost three years as a partner at Andreessen Horowitz, where he helped launch the $200 million Bio Fund. Before a16z, Bilimoria spent ten years building technology products for tech giants including Google, Netflix, LinkedIn and Microsoft. He was also the founder of the consumer mobile startup Sniply.
With Refactor, it invests in corporations “solving the biggest challenges facing society,” he said. In fact, the term “refactor” comes from computer science and refers to making code more efficient.
Being an independent GP hasn’t slowed down Bilimoria one bit. It has subsequently raised three additional funds and has now closed a fourth fund price $50 million in capital commitments to invest in the biotech, climate and hard tech startup spaces.
Since its launch in 2016, Refactor has invested in greater than 100 corporations, 4 of which have turn into unicorns, including Solugen, which uses synthetic biology to remove hydrocarbons from the chemical industry, and Astranis, which produces microsatellites.
Last week, Solugen received approx $214 million loan from the Department of Energy’s Office of Loan Programs to build one other Solugen Bioforge in Minnesota, which can produce chemicals from corn sugar fairly than crude oil. DOE award given to a small number of startups made a similar loan to Tesla in 2010.
He added that Bilimoria was able to raise the latest fund in lower than 90 days. Ninety percent of the fund was raised by existing limited partners, including firms comparable to Knollwood Investment Advisory. The majority of LPs are institutional investors, and the entire group of LPs are U.S. investors.
“I feel very lucky to have this group of LPs,” he said. “I’ve been chasing one institutional investor for the last four funds and I finally got them into this fund, so they’re part of my new 10%.”
Bilimoria is ending investments from the third fund, but has already committed part of the capital from the fourth fund.
This latest fund will proceed to lead pre-seed and seed investments in startups operating in areas comparable to novel battery technologies, cancer therapies, in vitro fertilization advances and chemicals. The checks are typically price between $1 million and $2 million and shall be distributed among 20 to 25 corporations over the next three years, Bilimoria said.