Good day. The market is a changed place–but some venture rounds still go at blazing speed.

“We were in the market for a grand total of a week before we had a number of term sheets,” said Taylor Matthews, co-founder and chief executive of Farther, a New York fintech startup.

In August, the company raised $31 million in a Series B round led by Lightspeed Venture Partners. The new money earned Farther a post-money valuation of $131 million, well up from $50 million at its A round a year prior. Farther’s existing investors, including Bessemer Venture Partners, Cota Capital, Khosla Ventures, MassMutual Ventures and Moneta Ventures, took part in the financing, which is being announced today.

This year, competitive Series B deals typically get two to four term sheets, said Justin Overdorff, a Lightspeed partner who led the Farther round. That’s still nowhere near the number similar deals got in 2021 or so, when up to eight term sheets might be thrown at a company that did well, he added.

The current dynamic is such that venture investors are sitting on a lot of dry powder, but fewer companies have metrics strong enough to rouse them, said Merritt Hummer, a partner at Bain Capital Ventures. “The ones that do are commanding premium prices,” she said.

Farther meets that test. The fintech has managed to rapidly grow assets at a time when registered investment advisers have seen asset totals slide. Farther’s business model is to hire financial advisers as employees, provide them with technology that helps them run their business, and take a cut of their fees. The company’s tech stack allows it to share more revenue with advisers than the industry standard, Ovedorff said–a strong selling point in bringing them in-house.

Farther’s AUM are nearing $1 billion, the company said, up from $675 million in April. Its target advisers manage $25 million to $50 million in assets each.

The company was founded in 2019 by Matthews, who previously worked in business operations for retirement advisory firm ForUsAll, and Brad Genser, Farther’s chief technology officer, who previously led private wealth AI technology development at Goldman Sachs.

In contrast to Farther, assets under management by SEC-registered investment advisers, or RIAs, declined by 11.1% in 2022 on an annual basis, the first retreat since 2008, according to a report by industry group Investment Adviser Association. Still, wealth management remains a huge industry: RIAs managed $114.1 trillion in 2022, the report said.

And now on to the news...

Fearless Fund notches initial win as case proceeds. A judge in an Atlanta court ruled in favor of venture firm Fearless Fund, enabling the fund to go ahead with selecting Black female entrepreneurs for its current batch of grants while a case against the fund proceeds in court. Edward Blum’s American Alliance for Equal Rights sued Fearless Fund in the U.S. District Court for the Northern District of Georgia in August over its grant program for Black female entrepreneurs. The Fearless Strivers Grant Contest awards $20,000 to winning applicants, and only Black female business owners are eligible. AAER claims that the Fearless Fund program is racially discriminatory and violates a section of the Civil Rights Act of 1866. Fearless rejects the claim.

• “It’s an important early win and vindication of our client’s First Amendment right to send its message of support for Black women entrepreneurs,” said Jason Schwartz, partner at Gibson Dunn, who represents Fearless, referring to the judge’s ruling Tuesday.
   
• “I’m a little befuddled by this,” Blum said about the rationale the judge used. AAER filed an emergency appeal to the 11th U.S. Circuit Court of Appeals in Atlanta seeking an injunction by Sept. 30 to freeze the grants from being issued while the case proceeds.

OpenAI is talking to investors about a share sale that would value the artificial-intelligence startup behind ChatGPT at between $80 billion to $90 billion, roughly triple its level earlier this year, The Wall Street Journal reports. The startup, which is 49% owned by Microsoft, has told investors that it expects to reach $1 billion in revenue this year and generate many billions more in 2024, people familiar with the discussion said.

• The deal is expected to allow employees to sell their existing shares as opposed to the company issuing new ones to raise additional capital. OpenAI representatives have begun pitching investors on the deal, the people said, though it is possible the terms could change.

Industry Ventures has raised $1.7 billion to take advantage of a steep drop in later-stage startup values and a growing need for cash among investors in venture capital funds and their managers, Rod James reports for WSJ Pro. 

• The San Francisco firm has collected $1.45 billion for Industry Ventures Secondary X, its largest fund yet for acquiring secondhand stakes in venture funds and private startups, according to a statement.

Funds

Pan-African seed investor P1 Ventures has completed the first $25 million close of its second fund, which has a target of $50 million.

People

Built Technologies, a provider of construction and real-estate finance technology, appointed Sam Kemp as chief financial officer. He most recently served as chief strategy officer at GoDaddy.

Cloud security provider Uptycs appointed Mike Campfield as chief revenue officer. He was most recently CRO of SafeGuard Cyber.

Product placement platform Rembrand hired Cory Treffiletti as chief marketing officer.

Series, a San Francisco-based startup that centralizes and automates finance and operations stacks for businesses, launched with $25 million in seed and Series A funding. Seven Seven Six and Basis Set Ventures led the financing, which included participation from Day One Ventures and others.

Gem Security, a cloud detection and response platform with offices in New York and Tel Aviv, secured $23 million in Series A financing led by GGV Capital.

Ayro, a Paris-based developer of a wind-powered wingsail system for ships transporting goods by water, closed a €19.2 million Series B round led by Swen Capital Partners’ Blue Ocean fund. Christian Lim, managing director of Blue Ocean, will join the company’s board.

Kolena, a San Francisco-based artificial intelligence and machine learning model testing startup, landed $15 million in Series A funding led by Lobby Capital.

Vali Cyber, a Linux cybersecurity provider, grabbed $15 million in seed funding from Grotech Ventures and others.

EchoMark, a Kirkland, Wash.-based information security provider, was seeded with a $10 million investment led by Craft Ventures.

Erudit, a San Francisco-based provider of real-time workforce insights to drive better decision making, collected $10 million in Series A funding from investors including Athos Capital.

UserEvidence, a Jackson Hole, Wyo.-based customer voice platform for business-to-business go-to-market teams, fetched $9 million in Series A funding led by Crosslink Capital.

Digma, a Santa Clara, Calif.-based continuous feedback platform for developers, picked up $6 million in seed funding from investors including Sorenson Ventures.

Meeno, a relationship mentoring app, landed a seed round led by Sequoia Capital, bringing the total raised by the company to nearly $5 million.

Pontoro, a Mountain View, Calif.-based platform seeking to unlock greater access to institutional-grade private market real assets, completed a $4.6 million Seed II round led by Ulu Ventures.

• The world’s biggest crypto firm is melting down
   
• FTC sues Amazon, alleging illegal online-marketplace monopoly
   
• Hollywood studios can train AI models on writers’ work under tentative deal
   
• How a four-day workweek actually works, from the companies pulling it off
   
• Google trial spills details on search engine’s deals with Apple, Samsung
   
• Why do employees keep ignoring workplace cybersecurity rules?

• Employers are getting more creative on benefits (Axios)
   
• How to evaluate venture capital GPs using the GP-thesis fit model (Allocate)

This newsletter was compiled by Yuliya Chernova, Matthew Strozier and Zachary Cole.

WSJ Pro Venture Capital is a premium service of The Wall Street Journal. We cover venture capital and the global startup ecosystem. Share your tips, comments and questions: vcnews@wsj.com

The Team: Matthew Strozier, Yuliya Chernova, Brian Gormley, Angus Loten and Marc Vartabedian.

Follow us on X: @wsjvc