Former Founders Fund general partner Brian Singerman and Quiet Capital co-founder Lee Linden are reportedly raising over $500 million for GPx, a new venture capital fund that combines traditional investing with fund-of-funds elements.

What Happened: Peter Thiel, co-founder of Founders Fund, is expected to contribute a portion of GPx’s capital, the sources told TechCrunch.

The fund employs a two-pronged approach: investing approximately 20% of capital into emerging VC funds targeting pre-seed and seed-stage startups, while dedicating the remaining 80% to co-leading Series B rounds in those managers’ most successful portfolio companies.

This hybrid model addresses a critical challenge facing early-stage venture capitalists. Small VCs often struggle to exercise pro-rata rights in later funding rounds due to limited fund sizes, forcing them to scramble for special purpose vehicles that can delay investment decisions, according to the TechCrunch report.

GPx’s capital backing allows emerging funds to maintain ownership percentages and lead later-stage rounds without time-consuming fundraising processes, according to the report.

The strategy reflects broader venture capital consolidation trends. As capital concentrates in larger funds, top investors are leaving established firms to launch specialized, nimble operations.

GPx is betting these emerging managers will identify strong early-stage companies, creating co-investment opportunities in breakout portfolio companies.

Founders Fund and Quiet Capital did not immediately respond to Benzinga's request for comment.

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Why It Matters: While fund-of-funds capital hit a 16-year low in 2024, according to PitchBook data, Singerman and Linden believe their personal networks and partial fund-of-funds approach will attract limited partners despite the dual fee structure typical of such models.

Thiel’s influence network spans multiple tech powerhouses through Founders Fund’s portfolio, including stakes in SpaceX, Palantir Technologies Inc. (NYSE:PLTR) and Stripe. His early investments generated exceptional returns, with 2007, 2010, and 2011 funds achieving gross multiples of 26.5x, 15.2x, and 15x, respectively.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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