Case Studies
Overview
With early meaningful cash upfront, wraparound services to increase capacity, and institutional knowledge, RareBreed aims to accelerate a company’s growth at the earliest stages.
Overview
McKeever “Mac” Conwell II, is the founder and managing partner of RareBreed Ventures (RareBreed), a pre-seed stage venture fund based in Baltimore, Maryland. Previously, he was a seed-stage fund manager at the Maryland Technology Development Corporation (TEDCO), software engineer, and two-time founder. RareBreed invests early in founders outside of the large tech ecosystem of Silicon Valley, New York, and Boston.
In September 2020, Mac left TEDCO to launch his first venture capital fund and structured it as a 506(c) fund. He primarily built his LP network from scratch by publicly marketing RareBreed on Twitter. In Q1 2022, he closed $10M for Fund I with the support of Alpaca VC, Carta, Insight Partners, Plexco Capital, and a number of individual LPs. He plans to launch his second fund at $75M+ later in 2022.
Why a 506(c) fund?
The 506(c) fund enabled Mac to more quickly launch and accelerate fundraising for his $10M pilot fund than he would have with the more traditional and expensive 506(b) fund. He leveraged his Twitter community — 20K followers at launch and 75K in June 2022 — as a catalyst to raise his fund with 80% of LP capital coming from Twitter connections. The 506(b) approach would have restricted his ability to publicly market his fund and deals and required larger upfront costs to pay for institutional fund service providers.
However, it was not an easy fundraising journey at all for Mac. During the first year, he had 1K+ meetings and upward of 25 meetings per day.
Investment Strategy
RareBreed is a pre-seed fund that invests in underrepresented founders outside of large tech ecosystems, earlier than everyone else. RareBreed takes a concentrated portfolio approach by writing checks from $50K to $250K as the first or one of the first investors.
Track Record
RareBreed Ventures Fund I (2021, $10M) – RareBreed has invested in 28 portfolio companies and generated a 1.64x MOIC and 1.57 TVPI as of December 31, 2021.
Fund I diversity metrics:
- 64% — have an underrepresented founder
- 75% — are located outside major tech hubs
- 43% — have a POC executive
- 32% — have a female executive.
Portfolio companies include:
- Faubion (Boston) creates premium custom-made engagement rings.
- Jefa (Mexico City) is a fintech startup offering digital accounts designed for women living in Latin America.
- Juno Medical (NYC) is a primary care company.
Minority Business Pre-Seed Fund at TEDCO (2016-20): Mac was the fund manager of the Minority Business Pre-Seed Fund (MPBF), which is a VC fund created through a partnership between TEDCO and Harbor Bank Community Development Corporation to address the capital needs of minority entrepreneurs in Maryland. The MBPF program makes investments of up to $40K to help minority entrepreneurs take a technology-based idea or concept that represents a viable business opportunity and develop it into a product that can be tested with potential users.
Fund Structure & Fund Terms
- Fund: RareBreed Ventures LP (Delaware LLC)
- GP: Mac Conwell
- Fund Size: $10M
- Minimum LP Commitment: $10K
- Investment Period: 5 years
- Fund Life: 10 years
- Management Fee: 2% of committed capital
- Carried Interest: 20%
- Preferred Return: None
- Key Person: Mac Conwell