How Taiwanese VC Matt Cheng became the investor that Silicon Valley firms watch and follow, hitting mega returns for his fund in under 7 years

MattCheng

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When former tennis pro-turned-VC Matt Cheng writes a check, Silicon Valley’s top venture firms notice.

Cheng, 44, is the founder and managing partner of Cherubic Ventures, a little-known early and seed-stage venture firm based in Taipei founded in 2014. In less than seven years, Cheng has made a name for Cherubic by writing early checks for some of Silicon Valley’s hottest companies, including Hims, Calm, Flexport, and Wish.

Born in Taipei, Cheng spent the first part of his life as Taiwan’s top junior tennis player, making frequent trips to the U.S. to train at the prestigious Palmer Tennis Academy in Tampa, Florida.

After graduating from National Taiwan University with a degree in information management, Cheng retired his tennis racket to try his luck as an entrepreneur. He co-founded Fotoable, a photo editing mobile app, and joined the Chinese live social video platform Tian Ge Interactive as Chief Strategy Officer. After he helped take Tian Ge public in 2014, Cheng became an angel investor. The first checks he wrote were around $50,000 to $100,000, mostly given to Chinese tech companies. 

“In between 2010 to 2014, I did about 23 companies by myself,” he said.

But it was when Cheng started to invest in U.S. companies that other investors noticed. Tommy Yip, the co-founder of Unicorn Capital Partners, a fund-of-funds manager, first approached Cheng in 2013.

They wanted to know who he was and how big his firm was because their general partners “were all following my deals,” he said. At the time, Cheng was still a one-person operation. Unicorn Capital works with GGV Capital, DCM, and other U.S.-China cross-border VC firms.

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With his prolific angel deals, other investors kept noticing him “on the cap table” he said, as they made investments in startups, meaning they saw that he was a shareholder listed on the capitalization table, a spreadsheet that shows a company’s equity distribution.

And it dawned on him to stop investing for fun and make a career out of it by starting his own firm “because I keep meeting founders, and I like to invest into the people,” he added.

Unicorn Capital signed up to become a limited partner investor in Cheng’s first fund and he went on to raise $42 million in 2014, and named it Fund II. 

Two years later, Cherubic raised a $67 million Fund III and, in 2018, closed a $92 million Fund IV.  Cheng also told Insider that he had raised a previously unreported $53 million Fund V which closed in late November.

Since 2014, the Cherubic portfolio has also expanded from a few dozen startups to over 130 portfolio companies worth a collective $22.4 billion. Cheng’s firm has grown into a team of 12 spread out across Taipei, Beijing, and San Francisco.

So far, Cherubic has had a pretty impressive track record for such a young venture firm, seeing a total of 20 exits, like Credit Karma’s acquisition of Snowball and Dropbox’s acquisition of Umano.

Cherubic has also had pieces of three U.S.-based IPOs, including Hims, the digital health company that went public via …read more

Source:: Businessinsider – Tech

      

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