Aydin Senkut got 50 nos before he heard one yes. 

“I thought I was never going to raise that fund,” said Senkut. “I had my first son coming, and it was a really tough time…So, when I heard that first ‘yes,’ I thought it was a miracle.”

The year was 2009, and Aydin Senkut—a Turkish immigrant who’d first arrived in Silicon Valley in 1995—had been investing since he left Google in 2005, where he’d been the company’s first product manager and was official employee number 63. He wanted to prove he wasn’t just lucky, but that he could engineer luck, both for himself and for others. Determined to build something from scratch like his entrepreneurial parents, Senkut in 2006 launched Felicis Ventures, a firm named after the Latin word for “good fortune.” His fortune wasn’t very good at first, as he tells it—rejected by former Google colleagues almost unanimously, he forged ahead fundraising, drowning in nos. That first institutional fundraise, finally, pulled together $41 million, with early backers like Peter Thiel and Marc Andreessen. At a moment when little else was in his control, Senkut focused on what he could: his business card.

“I was so into details, like Steve Jobs,” laughed Senkut, founder and managing partner of Felicis. “I literally found this specific printing shop in South San Francisco. They were the only ones that took heavy card stock and embossed business cards.”

He still keeps that card—it’s even got a QR code that to this day, links back to his contact information. Now, three logos, nearly 20 years, and nine funds later: Felicis has raised its tenth fund at $900 million, the firm’s largest to date, Fortune can exclusively report. It comes two years after the firm announced its ninth fund of $825 million in 2023, and the size of the 35-person team has remained consistent since. The firm’s current portfolio includes Notion, Plaid, and Canva, along with AI startups like Supabase, Mercor, Runway, Poolside, Revel, and Skild AI. Credit Karma, Adyen, Shopify, and Weights & Biases are some of Felicis’s key exits over the years. But Senkut remains acutely attuned to the version of himself that was rejected by dozens of other VCs and LPs at the very beginning.

“You can do one of two things,” he said. “You can either admit defeat, let people put you in a box, like you’re a loser. Or you can take that and say ‘No, I’m not a loser.’ And the way to show them they’re wrong is that you have to pull magic tricks out of nowhere…That’s why there will never be a victory lap.” 

Senkut is often described as being in “founder mode”—a term originated via Brian Chesky and Paul Graham to describe a relentless, hands-on leadership style. That ethos carries through in how Felicis engages with startups: The firm includes a unique clause in its term sheets promising never to vote against a founder, contractually aligning itself with the entrepreneur.

“We kept saying we were founder-friendly,” said Senkut. “One of our founders was like: What the hell does that even mean? Just commit. So, it’s now in our term sheet.”

I tell Senkut that I could easily see that going wrong, and he doesn’t flinch. 

“It could go really wrong,” he said. “We’ve made hundreds of investments and there were only two in the history of Felicis where things have gone drastically wrong. But you can’t be successful on fear. You’ll only be successful on the companies that work out…That’s the most misunderstood aspect of venture. People think we sit at a table, eliminating risk. And no, actually—you’re taking it on. You’re running into the risk. It’s like F1. One driver says, ‘I can crash, but that’s what it’s gonna take to cut another 0.01 second and get over the finish line first.’ That’s the mindset.”

Felicis was notably active during the ZIRP (zero-interest rate policy) era, when markets were frothy and valuations were especially high. According to prior TechCrunch reporting, Felicis funded 50% more deals in 2022 than in 2021. Senkut isn’t worried how that might shake out—that’s part of the race, too.

“If you’re not active, you’re actually going backwards,” he told Fortune. “We can’t say that we’ll just sit it out for a while: Nobody’s going to care about you in nine months. So we never stop investing…The big fabric that people are missing is this: The only thing that matters in this business is not the stages, ownership, whatever. It’s all about how you look after you invest. Is there a hockey stick growth?”

One of the most dramatic growth stories in AI right now is recruiting startup Mercor, which raised a $100 million Series B led by Felicis in February. Mercor CEO and cofounder Brendan Foody wasn’t planning to raise at the time—but when Felicis invited him and his cofounders to race Ferraris in Las Vegas, he figured, “why not?”

“They’ve got incredible hustle—like very few other firms,” Foody told Fortune. “They asked what valuation we thought made sense, we gave them a range of $1 billion to $2 billion, and they went straight to the top. We closed the deal.”

Foody sees Felicis as uniquely poised to help Mercor—whose revenue surpassed $75 million over about two years—in its next phase of growth, citing the firm’s deep understanding of frontier AI research and hiring help. Felicis managing partner Sundeep Peechu and partner James Detweiler have been taking calls with “almost every candidate” as Mercor has been hiring, Foody said. The firm doesn’t disclose ownership, but told Fortune it varies—Mercor was the largest check of Felicis’s last fund at $50 million, while the smallest was $100,000. 

Supporting these types of AI companies is key to Felicis’s future and, to this end, the firm this year hired OpenAI’s Peter Deng as a general partner. (Deng was a consumer VP leading the team working on ChatGPT.) Katie Reister, Felicis managing director and GP of fund of funds investing, said that Felicis is actively making choices to stay competitive in a venture space that, over the last two decades, has become more ferociously competitive.

“We’re constantly evolving what our platform looks like, and does it match the game that’s being played today,” said Reister, who was a Felicis LP herself for seven years while an SVB director. “I actually don’t like to think of venture as gambling, so that’s not the association I’m making. I think of it as getting to play a game over and over, but the game changes every time. How do you keep winning? You have to constantly change. You have to be aware of that, recognize that ego doesn’t matter. The fact you’ve won before doesn’t matter.”

To win, Felicis is ultimately looking to underwrite without reservation, going all-in, come what may. Data bears this out: In fund nine, 94% of Felicis’s investments were at the seed or Series A stage, and 87% of the capital deployed went into rounds where the firm led or co-led. They expect a similar breakdown for fund ten. When Senkut was raising the first institutional Felicis fund, he heard 50 nos before landing his first yes—from Judith Elsea, managing director at Weathergage Capital.

“Felicis has reinvented itself from a small, scrappy seed stage investor to a large, scrappy multi-stage investor who regularly leads deals,” says Elsea.

While startup investors often catch an “innovation wave” and reap big profits, Elsea wrote Fortune in an email, the VCs who stay relevant are the ones who are already paddling out for the next wave as the first one reaches the beach: “Being a VC investor is hard to do well and particularly hard to do well over long periods of time. Felicis is showing that kind of stamina.”

Senkut goes to waves too, and we talk about the HBO series, The 100 Foot Wave. You have to be ready to wipe out seriously in order to succeed spectacularly.

“If you ask me, like, our biggest fail mode is we need to take more smart risks,” said Senkut. “So, you have to really unwind your brain, like that surfer in Portugal. I used to say we’re wave surfers. But I realized there are too many good surfers, and too many waves. So, now I’m saying we’re tsunami surfers.”

See you tomorrow,

Allie Garfinkle
X: @agarfinks
Email: [email protected]
Submit a deal for the Term Sheet newsletter here.

Nina Ajemian curated the deals section of today’s newsletter. Subscribe here.

This story was originally featured on Fortune.com

© Felicis

In 1993, Steven Lee’s parents opened Seven Star Fashion, a textile shop in LA’s Koreatown, after immigrating from South Korea to build a new life.

“They were the first entrepreneurs I knew,” said Lee. “They worked long hours, a classic immigrant story. They came here with basically nothing, and didn’t know how to speak English. They didn’t have a network—and they’re a very big influence for what I do today.”

Today, a very different Seven Star launches. Steven Lee has left his role as a partner at SV Angel to start his own firm, Seven Stars, which is debuting with an oversubscribed $40 million fund. Raised in just five weeks, the fund focuses on pre-seed and seed-stage investments in AI applications across both consumer and enterprise. Lee plans to back 35 to 45 companies per year. Limited partners include a university endowment and a pension fund—both undisclosed—as well as StepStone Group and Sapphire Partners.

Nate Leung, Sapphire Partners partner and OpenLP cofounder, said part of Lee’s pitch was refreshingly simple: “an outstanding track record from a highly respected firm.” SV Angel—founded by legendary VC Ron Conway—has a long history of early bets on companies like Google, Facebook, and Airbnb. 

Lee built his own reputation within that legacy, focusing on AI and was involved with backing startups like ElevenLabs, Mercor, Captions, Reflection AI, and Skild AI, as well as personally investing in OpenAI. These early partnerships helped lay the foundation for his new firm. Hunter Somerville, partner at StepStone Group, pointed to Lee’s “extensive relationships and trusted reputation with leading AI companies” as another key strength.

“I’ve started to build this unique network, really understanding what these visionary AI founders need from their early investors,” Lee told Fortune. “I really believe that AI is the equalizer for the 90% and it’s already transforming lives at a global scale. And it really starts with motivated founders who are building enduring companies empowering individuals and other companies to thrive. And while AI’s already benefiting one billion knowledge workers today—we’re already seeing it in finance, law, marketing—I’m most excited about AI’s impact on the next eight billion people.”

He’s already invested in five companies since launching the fund, though he declined to name them. Lee’s value-add strategy is highly focused: offering hands-on fundraising support, access to a curated advisory network, and help with hiring across all levels.

“It’s not just helping with hiring early, with entry-level engineers, but helping and closing and sourcing for mid-level to senior-level executives,” said Lee. “When you put those three things together, that’s kind of the investor that I want to be. And I think that’s very unique in this moment of time, especially as a lot of these first time AI founders are navigating this really complex technology for the first time well.”

Influenced by his parents, Lee had always imagined starting something of his own one day. Despite working in AI (or perhaps because he works in AI), he believes success isn’t just about the technology—it’s also about the people behind it and the life experiences they bring.

“Building a company, or any kind of business is incredibly difficult,” said Lee. “It takes a lot of courage, lots of sacrifices. Quite frankly, it takes a bit of luck as well. I always want to make sure I remember that, especially as I work with these next generation AI founders. Because I also want this firm to be enduring, for it to outlive me… In good times and bad times, I want to remember that’s what we’re striving for. That it’s generational. That Seven Star Fashion was the first generation.”

And the new generation begins now. 

This story was originally featured on Fortune.com

© Seven Stars

Time is relentless, dwindling, and utterly relative. 

“The Greeks have two words for time,” Ryan Alshak, founder and CEO of Laurel, told me in a Los Angeles conference room in May. “There’s chronos, which is clock time, and kairos, which is your perception.”

Alshak has built his life around time—literally. His startup, Laurel, is designed to map how people spend theirs at work. By connecting with tools like Slack, Microsoft Outlook, and Zoom, Laurel quantifies knowledge work, using AI to help individuals and companies see where time goes—and which tasks and activities deliver the most return. The platform is gaining real traction in time-sensitive industries like law and accounting, with ambitions to redefine productivity even in fields where time isn’t billed by the hour.

“Our entire mission is to return time, and the statistic that underpins that: The average knowledge worker today works nine hours a day, but only adds leverage for three,” Alshak said.

The entrepreneur has a knack for imbuing his timekeeping and work analytics startup with axioms that sound like they might have come from the lips of ancient philosophers. “The finiteness of time is the universe’s ultimate feature, because it forces us to confront the reality that we don’t have infinite minutes,” Alshak says. “So, are we spending it wisely? That’s a highly personal decision. Laurel will never tell people how to spend their time, but we’re going to give you information that helps you make the best decision.”

The pitch seems to be working. Laurel has raised a $100 million Series C led by IVP, Fortune has exclusively learned. GV and 01 Advisors joined as new investors in the round, which values Laurel at $510 million—more than double its previously undisclosed valuation, according to the company. The raise also includes a $20 million tender offer, the startup’s first. Other new backers include DST Global, OpenAI’s Kevin Weil, Alexis Ohanian, GitHub CTO Vladimir Fedorov, and Notable Capital’s Hans Tung. Existing investors—Marc Benioff’s Time Ventures, ACME, AIX Ventures, Anthos, and Gokul Rajaram—also participated.

Laurel, which has 59 employees, traces its roots back to 2016, when it launched under a different name: Time by Ping. But the company struggled to gain traction. Alshak says the problem was twofold—an overcommitment to the legal industry, and NLP technology that wasn’t yet up to the task. That changed in 2022, when Alshak gained early access to OpenAI’s GPT-3. He paused everything, overhauled the product, and reintroduced the company as Laurel. When ChatGPT launched, it came with a flood of interest he couldn’t have predicted. After years of nos, “I went from the crazy person to the person who firms were calling, saying ‘help us,’” said Alshak. “That created the zero-to-$26 million-contracted era we have over the last 24 months.”

For accounting giants like Ernst & Young and Grant Thornton, and national law firms like Saul Ewing and Frost Brown Todd, Laurel has become part of their AI strategy. The startup isn’t without competition—rivals include 38-year-old Aderant and 8VC-backed PointOne. But Laurel’s hard-won velocity started drawing attention from investors, including IVP general partner Ajay Vashee. The former CFO of Dropbox, he was compelled by the idea that you could truly start to solve the intractable question of time management, planning, and resource allocation.  

“I lived the struggle firsthand,” said Vashee. “At most companies, it’s a total black box. You set goals, you’ll set your budget and plan for the year. And every quarter, you check in and it’s a scramble. What did this team do? Did we actually hit these goals? It’s a really inefficient and clunky process. But I had this vision with Ryan about how that can be completely redefined.”

Vashee and Alshak struck a deal in about a week, spending more than 20 hours together over several days. During diligence, Vashee encountered something he’d never seen before: “Laurel is the only company I’ve seen—and we’ve evaluated thousands since I joined the firm—that received a 10 out of 10 CSAT [customer satisfaction score] rating from every single customer I spoke with,” he said. “And we talked to dozens of customers across legal, accounting, and consulting.”

Tom Barry, managing partner at accounting firm GHJ, has been a Laurel customer since the start of the year—and as an accountant, he’s spent his career living in the six-minute increments the industry bills clients in. The same goes for his colleagues at GHJ, with whom he’s been in close conversation as the firm rolls out the platform.

“Like any other change management technology, there’s a bell curve,” said Barry. “Most people are in the middle of the bell curve. And, first of all, it’s better than any other user interface they had. So, that’s a quantum leap forward. Then there’s another element—you have any idea the amount of business insights we can get on this thing? We’re seeing the long game on all this right now: It’s not just a tool to help track time.” 

Laurel’s long game goes beyond traditional timekeeping industries. The platform is starting to show companies the ROI of AI tools—quantifying productivity before and after adoption. “Most companies are putting the cart before the horse,” said Alshak. “None of the LLMs have figured out how to quantitatively prove the impact of AI in the enterprise. They’re relying on surveys or adoption as a proxy.”

“[Famed consultant and writer Peter] Drucker said you can only manage what you measure,” he added. “In the AI world, I think you can only automate what you measure.”

When I suggest this kind of tracking could veer into Orwellian territory, Alshak doesn’t flinch. Laurel, he said, prioritizes SOC and ISO compliance, field-level encryption, and data ownership—customers control their own data.

“Laurel is about aligning employee and employer,” he said. “Minimize input, maximize output. We want people to take agency over their time.”

Barry, the GHJ accountant, joked that time is both his friend and his enemy. That’s true for all of us—sooner or later, we’re reminded that time runs out. Alshak told me he thinks about death often. I believe him. Even Laurel’s LLM-powered chat interface is named Mori—a nod to the Latin phrase memento mori, or “remember you must die.”

For Alshak, the beginning of Laurel is inextricably tied to the end of his mother’s life, the end of their time together—she passed away from cancer in 2018, just weeks after the company closed its seed round. 

“A minute with her at the end was worth a million minutes doing anything else,” said Alshak. “And I realized that I’m not building a timekeeping company. I’m building a company that allows people to understand: Am I spending my time in the way I want? I want to be the mirror back to the world, and I want to teach the world this lesson: We care so much about our dollars, but we’re so cavalier about our minutes. And that’s a fundamentally inverted framework.”

“I’m trying to live as if I’m gonna be here for 78 years, 4000 weeks,” he added. “I want every minute to matter.”

See you tomorrow,

Allie Garfinkle
X: @agarfinks
Email: [email protected]
Submit a deal for the Term Sheet newsletter here.

Nina Ajemian curated the deals section of today’s newsletter. Subscribe here.

This story was originally featured on Fortune.com

© Laurel

Gusto, an HR tech startup valued at more than $9 billion, is conducting an over $200 million tender offer via a new deal led by the Ontario Teachers’ Pension Plan.

The tender offer, which begins Monday and runs through July 8, will allow employees in the company to cash out some of their shares while giving the Canadian fund its first stake in the company. 

“Given the momentum, we’ve had investors interested in owning Gusto stock for a long time,” Gusto cofounder and CEO Josh Reeves told Fortune via email. The offer will be open to both current and former employees with a minimum of two years of tenure. Gusto declined to disclose price per share and whether there is a maximum number of shares that employees can sell. 

The deal was done at Gusto’s last valuation, $9.3 billion, and is led by Teachers’ Venture Growth, which is part of Ontario Teachers’ Pension Plan. (OTPP, the largest single-profession pension plan in Canada serving over 340,000 current and retired teachers, is also an investor in Canva, Databricks, and SpaceX.) OTPP is the anchor for the deal, and is joined by new and existing Gusto investors. It’s a full-circle moment of sorts—Reeves’ parents are both teachers. 

The tender offer, the third that Gusto has arranged for employees since its founding in 2012, comes as the market for initial public offerings remains limited. Several tech companies, including Circle and Omada Health, have had IPOs in recent weeks, but the overall number of public listings remains well below historical norms.

Reeves declined to comment on Gusto’s IPO plans, telling Fortune: “Gusto has been a long-term focused, multi-decade company from day one … When we have more details to share on an IPO, we’ll share it.”

The company’s last employee tender offer was in 2021, done in addition to the startup’s $175 million Series E funding round. Gusto—founded in 2011 by Reeves, Tomer London, and Edward Kim—has been free cash flow positive since early 2023.  

As Fortune reported in May 2024, Gusto generated north of $500 million in revenue in its 2023 fiscal year. The company also said that it’s been growing over the past year, driven by the expansion of existing products like health benefits and 401(k) management. In 2024, Gusto’s 401(k) business grew its ARR, or annual recurring revenue, about 50% year over year, while the unicorn’s Gusto Money spending account product grew ARR over 140% year over year. 

HR tech has recently made headlines for the sprawling legal brawl between HR unicorns Rippling and Deel, but Reeves says that the space itself remains active and bright. In 2025, Reeves added, the company is set to add 150,000 new small businesses to its platform, and is actively hiring, with a particular focus on R&D.

“There is tremendous opportunity in the broader HR tech space,” said Reeves. “More businesses are being created while at the same time more rules and regulations are being introduced. Gusto can help. I have conviction that there will be multiple $100 billion–plus new companies built in this space, including Gusto. And as a reminder, Intuit is a $200 billion–plus company today; ADP is a $100 billion–plus company today; and Paychex is a $50 billion–plus company today.”

This story was originally featured on Fortune.com

© Courtesy of Gusto