Reach Capital has raised $265 million for its fifth flagship fund, giving the early-stage venture capital firm fresh capital to invest in another 50 founding teams while bringing its assets under management close to $1 billion.
Reach V will continue the firm’s focus on pre-seed, seed and Series A investments in companies developing technology intended to expand human potential and improve the systems supporting education, health and work.
The $265 million vehicle sits alongside Reach’s Founders Fund II and its previous funds. Across its first four flagship funds, Reach has backed more than 180 founding teams.
Reach is deliberately maintaining a fund size below $300 million even as significantly larger pools of capital increasingly dominate venture investing.
The firm believes its size allows it to generate meaningful returns from a broader range of outcomes rather than depending almost entirely on a small number of enormous investments.
Reach pointed to the increasing concentration of venture capital in AI as one reason for maintaining that approach.
According to figures cited by the firm, U.S. venture investment reached $412 billion during the first half of 2026, with AI companies receiving 86 cents of every venture dollar invested. Two companies accounted for 43% of worldwide venture funding, while rounds larger than $100 million represented 87% of capital deployed during the period.
Reach argues that this concentration favors enormous funds capable of making large bets on frontier AI laboratories, but leaves room for smaller venture firms to pursue companies bringing advanced technologies into industries and customer segments where adoption can take longer.
The firm’s strategy is based partly on the belief that companies serving educators, healthcare workers, skilled tradespeople, small businesses and other institutionally constrained markets can generate attractive venture returns even without becoming massive technology platforms.
Reach highlighted the performance of its first fund as an example.
Reach I was a $53 million fund that invested across 34 companies and has reached a 3.9x total value to paid-in capital multiple, placing it in the 84th percentile among 2015-vintage funds, according to Reach.
That portfolio includes one investment that generated a 68x multiple on invested capital, but Reach said a significant portion of the fund’s value has also come from companies generating returns between 2x and 10x.
Examples include Gradescope, which developed technology for grading and providing feedback on assignments and was acquired by Turnitin, and Nearpod, which built interactive classroom technology before being acquired by Renaissance.
Reach said its second fund has generated a 2.0x TVPI and similarly includes both a fund-returning investment and a broader group of exits producing multiples between 2x and 10x.
The firm said its third fund is developing along a similar trajectory and that strategic acquisitions of companies producing these middle-range outcomes have contributed to distributions across its portfolio.
Reach believes these outcomes can matter significantly for a sub-$300 million fund even when they would have relatively little impact on a multi-billion-dollar venture vehicle.
The strategy also reflects Reach’s view that it is extremely difficult to determine at the pre-seed stage which startups will eventually become extreme power-law winners.
Some companies initially address narrowly defined markets that later expand substantially, while others discover additional products and customer segments as they develop.
Reach sees an opportunity to continue backing founders translating frontier technologies into practical products for sectors where technology adoption can involve procurement processes, institutional approvals, training requirements and other forms of friction.
Eleven years after its founding, the firm said it remains focused on making advanced technologies more broadly accessible across education, healthcare, work and other areas affecting everyday users.
Reach V will provide the firm with capital to extend that strategy across approximately 50 additional companies while maintaining its focus on investing at the earliest stages of company formation.
KEY QUOTES:
“History tells us that progress happens when technology stops being a privilege and becomes ordinary.”
Jennifer Carolan, Co-Founder of Reach Capital
