2026 · 5 min read
Why We Back Emerging Managers
Most of what AAF does is direct, high-conviction investing. The Axis Fund, our fourth vehicle, puts 80% of its capital into direct positions. The other 20% goes somewhere less obvious: into emerging managers running their first or second fund, entering at Pre-Seed and Seed.
That 20% is a strategy, not a hedge — and it buys three things a direct-only fund can't get on its own.
The first is data. Backing a manager from their earliest vintage gives us a direct line into their pipeline, their portfolio, and their reporting — granular, current, and detailed in a way the public market and later-stage relationships never provide. Early managers who want committed, long-term capital partners report openly. That flow of information sharpens our entire view of where value is forming.
The second is access — specifically the ability to co-invest directly into their best deals. We aren't backing managers to sit at arm's length. Positions in their funds put us in a place to write direct checks alongside them into the standout companies in their portfolios, compounding our direct strategy with theirs. The manager relationship is the top of a funnel that feeds our own conviction investing.
The third is reach. The best early access in venture doesn't sit with the largest platforms. It sits with managers close to a specific network, technology, or community — entering before a deal is competitive. First and second vintage is the entry point on purpose: alignment is highest, terms haven't hardened, and a capital partner who shows up early matters most.
Who we back.
We look for managers with an edge that's hard to replicate:
- Spin-out GPs from leading firms — managers who trained at groups like SoftBank, First Round Capital, and Lightspeed Venture Partners, and former partners from Y Combinator, now running their own funds.
- Former founders — operators who've built and now invest with that scar tissue.
- Verticalized outliers — GPs with unique deal-winning ability and high-conviction, specialized mandates across AI, enterprise SaaS, cybersecurity, and fintech.
- Alumni networks — the 'tech mafias' that reliably produce outlier founders and investors: alongside the well-documented PayPal Mafia, whose alumni we back a GP from, we've backed managers emerging from the Meta, Chime, YC, and Thiel Fellowship networks.
- First-time entrepreneurs and the funds built for them — We believe in backing founders at the very start, which is why The Axis Fund backs the two leading university- and dropout-focused managers: Valyrian, out of the Thiel Fellowship, and Dorm Room Fund, the premier university entrepreneurship fund.
Within The Axis Fund we currently back 26 emerging managers. Across the firm since inception, we've supported 45 venture firms and their funds. It's how a deliberately small fund builds exposure that looks far larger than its size.
Kyle Hendrick — AAF Management Ltd.