The OpenAI Startup Fund, which is technically separate from OpenAI but still closely related to it and focuses on early-stage investments, primarily in AI companies in education, law, and science, has quietly closed a $15 million deal.
According to a filing with the US Securities and Exchange Commission, two unnamed investors contributed $15 million in cash around April 19. The documents were filed on April 25 and mention Ian Hathaway, the manager and sole partner of the OpenAI Startup Fund.
Special Purpose Vehicle (SPV)
The funds were transferred to a legal entity known as a special purpose vehicle (SPV) associated with the OpenAI Startup Fund: OpenAI Startup Fund SPV II, LP
SPVs allow multiple investors to pool their resources and invest in a single company or fund. In the VC industry, they are sometimes used to invest in startups that do not fit into the fund's strategy or that do not fit into the fund's terms. SPVs can also be marketed to a wider range of non-institutional investors.
Controversy surrounding the OpenAI Startup Fund
The OpenAI Startup Fund, whose portfolio includes legal tech startups like Harvey, Ambiance Healthcare, and humanoid robot company Figure AI, sparked controversy last year when it was revealed that OpenAI CEO Sam Altman had long been a de facto control freak. Despite being presented as a standard corporate investment fund, Altman raised funding for the OpenAI Startup Fund from outside limited partners, including Microsoft (a close partner and investor in OpenAI), and had final say on the fund’s investment decisions.
Neither OpenAI nor Altman had—and do not have—a financial interest in the OpenAI Startup Fund. However, critics have argued that Altman's ownership creates a conflict of interest; OpenAI has argued that the general partner structure was intended to be "temporary."
Passing the inspection
In April, Altman formally transferred control of the OpenAI Startup Fund to Hathaway, who is previously a venture capital investment partner at Haystack and has played a key role in managing the Startup Fund since 2021.
As of last year, the OpenAI Startup Fund — whose portfolio also includes an incubation program called Converge — had $175 million in commitments and $325 million in gross net assets. It has backed more than a dozen startups, including Descript, a multimedia editing platform valued at $553 million last year; language learning app Speak; AI-powered note-taking app Mem; and IDE platform Anysphere.
OpenAI did not respond to TechCrunch's request for comment by the time of publication. We will update this post if we learn more.
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