Patron may only be on its its second fund, but its young founders exude a confidence often seen with much more experienced venture capitalists.
The Santa Monica-based firm was founded just three years ago by Jason Yeh and Brian Cho, both former executives at Riot Games, and was later bolstered by the addition of partner Amber Atherton, a former executive at Discord, a chat service for gamers. Yeh tells Venture Capital Journal that his and his colleagues’ background in gaming gives them a distinct competitive advantage.
Their debut fund closed on $90 million, $30 million over its target, while Fund II raised $100 million, $10 million more than originally planned.
“In venture it’s important to understand the founders in the space you’re investing and I think that’s where we can best help companies and underwrite better than other investors,” Yeh explains.
“One of the unique advantages we have compared to other early-stage investors is because we come from Riot and Discord we have a sense for how this younger generation interacts online. Our thesis is a long-term thesis: this generation of consumers growing up online are in college or already working, so it’s inevitable that our worldview comes true.”
The thesis resonated with both existing and new LPs. Fund II is anchored by funds of funds manager Horsley Bridge Partners and includes commitments from at least nine high-profile GPs, including Andreessen Horowitz co-founder Marc Andreessen, Union Square Ventures co-founder Fred Wilson and Benchmark Capital general partner Mitch Lasky.
Patron was also able to secure its first commitment from a university endowment, with the $5.5 billion UCLA endowment signing on for Fund II. The firm declined to name other institutional LPs, but says the majority are single-family offices of founders and operators in the gaming and consumer spaces.
“I think in Fund I we had 135 total LPs,” Yeh tells VCJ. “Fifty percent of the capital came from 100-plus individuals and the other 50 percent came from institutions. The second time around I think we’re at 45 or 50 LPs, so a lot more concentrated, which was by design because we wanted to have a lot more durable, long-term capital.”
Yeh adds that the three largest LPs from Fund I returned for Fund II, and that “in a couple cases they doubled or tripled their commitment,” which helped the fund gain momentum early. He declined to share the terms of the fund but says they are “very traditional.”
Patron primarily looks to lead the seed rounds of gaming and consumer start-ups, typically investing $2 million to $3 million and acquiring at least a 10 percent ownership stake.
Fund I built a portfolio of 21 companies including community-based music learning platform Tonic and AI-powered smart wallet developer Kudos Technology.
Yeh says the firm’s strategy won’t change for Fund II, except for a slightly larger portfolio.
The only significant difference between Fund I and II is the makeup of the LP base, he says.
Patron’s debut fund was raised at the peak of venture fundraising activity with a total of $189.5 billion raised by venture funds in 2021, according to VCJ’s latest fundraising report. Fund II was raised in what Yeh describes as “the most different fundraising environment” possible, with just $49 billion raised worldwide by VCs through the end of H1, according to the VCJ report.
“The thing that helped us a lot was, at the time, three of our earliest investments had raised follow on funding and they were all led by top investors,” Yeh tells VCJ.
Yeh declined to share the names of those three companies, but VCJ research identified two of them as Kudos, the aforementioned AI-powered smart wallet, which raised an oversubscribed Series A round led by QED Investors in May, and Raid Base, a sandbox gaming studio from the creators of Valorant at Riot Games, which raised an undisclosed amount for its Series B round in July 2023.
Yeh also declined to share the names of the four companies Fund II has invested in so far, though he did share that two “are building things tied to games,” while the other two “are building future consumer apps that help consumers do something better than what they could on a previous platform.”
As for the firm’s name, not to be confused with London-based real estate investor Patron Capital Advisers, Yeh says the inspiration came from he and Cho’s time at Riot Games.
“It comes from the time that we spent at Riot,” he explains. “There’s this idea of patronage and being a patron of the arts, serving your users – and as a fund we’re serving our founders… At the end of the day we want our founders to create amazing companies and [we understand that] we’re not the ones doing that. Our job is to make sure they have the support needed to become successful.”
Patron may only be on its its second fund, but its young founders exude a confidence often seen with much more experienced venture capitalists.
The Santa Monica-based firm was founded just three years ago by Jason Yeh and Brian Cho, both former executives at Riot Games, and was later bolstered by the addition of partner Amber Atherton, a former executive at Discord, a chat service for gamers. Yeh tells Venture Capital Journal that his and his colleagues’ background in gaming gives them a distinct competitive advantage.
Their debut fund closed on $90 million, $30 million over its target, while Fund II raised $100 million, $10 million more than originally planned.
“In venture it’s important to understand the founders in the space you’re investing and I think that’s where we can best help companies and underwrite better than other investors,” Yeh explains.
“One of the unique advantages we have compared to other early-stage investors is because we come from Riot and Discord we have a sense for how this younger generation interacts online. Our thesis is a long-term thesis: this generation of consumers growing up online are in college or already working, so it’s inevitable that our worldview comes true.”
The thesis resonated with both existing and new LPs. Fund II is anchored by funds of funds manager Horsley Bridge Partners and includes commitments from at least nine high-profile GPs, including Andreessen Horowitz co-founder Marc Andreessen, Union Square Ventures co-founder Fred Wilson and Benchmark Capital general partner Mitch Lasky.
Patron was also able to secure its first commitment from a university endowment, with the $5.5 billion UCLA endowment signing on for Fund II. The firm declined to name other institutional LPs, but says the majority are single-family offices of founders and operators in the gaming and consumer spaces.
“I think in Fund I we had 135 total LPs,” Yeh tells VCJ. “Fifty percent of the capital came from 100-plus individuals and the other 50 percent came from institutions. The second time around I think we’re at 45 or 50 LPs, so a lot more concentrated, which was by design because we wanted to have a lot more durable, long-term capital.”
Yeh adds that the three largest LPs from Fund I returned for Fund II, and that “in a couple cases they doubled or tripled their commitment,” which helped the fund gain momentum early. He declined to share the terms of the fund but says they are “very traditional.”
Patron primarily looks to lead the seed rounds of gaming and consumer start-ups, typically investing $2 million to $3 million and acquiring at least a 10 percent ownership stake.
Fund I built a portfolio of 21 companies including community-based music learning platform Tonic and AI-powered smart wallet developer Kudos Technology.
Yeh says the firm’s strategy won’t change for Fund II, except for a slightly larger portfolio.
The only significant difference between Fund I and II is the makeup of the LP base, he says.
Patron’s debut fund was raised at the peak of venture fundraising activity with a total of $189.5 billion raised by venture funds in 2021, according to VCJ’s latest fundraising report. Fund II was raised in what Yeh describes as “the most different fundraising environment” possible, with just $49 billion raised worldwide by VCs through the end of H1, according to the VCJ report.
“The thing that helped us a lot was, at the time, three of our earliest investments had raised follow on funding and they were all led by top investors,” Yeh tells VCJ.
Yeh declined to share the names of those three companies, but VCJ research identified two of them as Kudos, the aforementioned AI-powered smart wallet, which raised an oversubscribed Series A round led by QED Investors in May, and Raid Base, a sandbox gaming studio from the creators of Valorant at Riot Games, which raised an undisclosed amount for its Series B round in July 2023.
Yeh also declined to share the names of the four companies Fund II has invested in so far, though he did share that two “are building things tied to games,” while the other two “are building future consumer apps that help consumers do something better than what they could on a previous platform.”
As for the firm’s name, not to be confused with London-based real estate investor Patron Capital Advisers, Yeh says the inspiration came from he and Cho’s time at Riot Games.
“It comes from the time that we spent at Riot,” he explains. “There’s this idea of patronage and being a patron of the arts, serving your users – and as a fund we’re serving our founders… At the end of the day we want our founders to create amazing companies and [we understand that] we’re not the ones doing that. Our job is to make sure they have the support needed to become successful.”
