Frumtak Ventures currently has two funds, Frumtak and Frumtak II. They were one of the three funds announced in early 2015. They were very active for two to three years, with their last fresh investment in 2017.
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Questions in bold, answers unformatted.
You’ve been a part of Frumtak for a long time, with Eggert. What is the reason for this change of roles?
Eggert and I founded Frumtak Ventures as equal partners, but decided for the continuity from the first fund into the second fund that he would continue to be Managing Director and that I would take over at a fitting time. That time has now come.
Why at this point in time?
We formally announced on May 9th that we will be raising a new fund, Frumtak III in 2020 which will operate up until 2030. Potential investors want to know who will be leading the fund the whole time. As Eggert had indicated that he wants the option to retire in 2025 we decided that now would be a good time to make the change we had originally decided, and that I will lead the new fund.
Frumtak II hasn’t done fresh investments since 2017 (Sidekick Health). Will your first undertaking be to raise a third fund?
The experience from the first fund was clear in terms of the number of companies and amounts to invest in that were sensible and as there was ample supply of investment opportunities when Frumtak II was founded, it took only 2 years to select the investments that we deemed appropriate for the size of the fund. We also left enough in the fund to be able to support our companies going forwards. I am deeply involved with both funds and will simultaneously head the fundraising for Frumtak III.
How do you think the current landscape for raising a venture fund in Iceland is?
I think the landscape is good for raising a venture fund in Iceland as the LP’s that have invested in venture funds in the startup asset class realize the importance of creating and building new companies and they understand that it takes time to create value and deliver financial returns.
I believe that the work we have been doing for the last 10 years is an important part of growing the venture industry and ecosystem in Iceland and it is important to preserve the experience and knowledge that we have built. It is important to grow that further by having a new fund which gives us the means to grow our team and continue to build a strong venture partner.
What could be better? What has changed since last time you raised a fund?
What our industry needs is more success stories. If we had more good/ great exits, it would be easier to raise a fund.
When we raised Frumtak II, we were in the forefront of setting the traditional venture terms and activity of the funds with the LP’s in Iceland. The co-operation with our LP’s has been very good and they have shown us lot of trust.
Back in 2015 it was big news when three venture funds were announced in the same month. There has not been much fund activity lately beside new investment of Crowberry Capital and hopefully we can participate in new investments with our third fund next year.
General knowledge, paperwork and terms have become much clearer since 2015 which we hope will make our task easier when it comes to raising a new fund.
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