Cendana Capital Research
Investment Thesis
Cendana Capital is a San Francisco-based fund-of-funds (FoF) founded in 2010 by Michael Kim. The firm provides strategic, high-conviction anchor capital exclusively to very early stage venture capital funds globally. Unlike direct venture investors, Cendana invests in VC fund managers themselves — specifically Pre-Seed and Seed stage fund managers — enabling GPs to secure outsized ownership in companies led by exceptional founders.
The firm's core thesis is that the best returns in venture capital come from small, early-stage funds run by investors with unique network access and domain expertise. Cendana seeks to be the lead LP in each of its portfolio funds, building long-term relationships with GPs across multiple fund cycles. Their name comes from the Malaysian word for sandalwood, historically synonymous with vitality and the power of giving continuance of life.
Investment Model (Fund of Funds)
Cendana is a specialized fund-of-funds exclusively focused on the earliest stage of the venture ecosystem. Their investments are in VC funds themselves — not directly in startups (though a small direct startup investment sleeve of ~$30M exists within Fund V). They back:
- Pre-Seed stage fund managers
- Seed stage fund managers
- First-time (Fund I) fund managers and emerging managers
- Established seed-stage firms on subsequent funds
- Both US-based and international fund managers
Cendana explicitly avoids late-stage funds and large multistage firms. Their portfolio funds typically write first checks into startups, with the median seed round in their portfolio being approximately $4 million.
Check Size and Commitment Structure
Cendana makes structured LP commitments at three tiers:
- Core positions: $10M–$20M commitments; typically among the largest LP positions in a fund
- Pilot checks: Smaller commitments as an on-ramp toward potential Core positions
- Nano checks: Entry-level investments for newer or emerging GPs
Core portfolio funds receive Cendana as one of their largest LPs, with Cendana serving as a meaningful anchor that helps attract additional institutional LP capital.
Stage Focus
Cendana focuses exclusively on very early stage VC fund managers investing at the Pre-Seed and Seed stage. They have adapted with the market — early on they focused on funds under $50M, now they accommodate funds up to $100–$150M — but they maintain a hard limit on fund size and continue to believe smaller funds generate better returns. They have noted that seed funds investing $150M+ find it harder to generate strong multiples.
Key portfolio construction insight: Cendana believes seed VC managers should target at minimum 10% of their fund size as initial ownership; for Pre-Seed managers, the minimum is 20% of their fund size.
Lead Tendency
Cendana explicitly seeks to be the lead investor in each portfolio fund. As lead LP, they act as trusted advisor and anchor — helping portfolio fund GPs attract additional institutional LPs, advising on portfolio construction, facilitating GP-to-LP introductions, and providing strategic guidance on building lasting firms.
Recent Activity
Cendana has been highly active across 2024–2026:
- March 2025: Closed Cendana Capital VI at $400M — the firm's fastest-ever fundraise, exceeding its $340M hard cap. Total commitments now exceed 200 VC funds.
- April 2026: Closed Kline Hill Cendana Partners Fund II at $400M — a VC secondaries vehicle co-managed with Kline Hill Partners, more than tripling the size of Fund I. Focused on acquiring LP interests in seed-stage VC funds from LPs seeking liquidity.
- April 2024: Closed Kline Hill Cendana Partners Fund I at $105M — the inaugural VC secondaries fund, oversubscribed.
Fund VI brings Cendana's total AUM to over $2.7 billion, with exposure to 5,700+ underlying portfolio companies and 170+ unicorns across their full portfolio of fund commitments.
Fund History and Returns
Cendana has operated since 2010 across six primary flagship funds and two secondaries vehicles:
- Fund I (~2010): Net return 4.2x, 2.2x distributed back to LPs
- Fund II: Marked in mid-3x range, approaching 100% distributed
- Fund III
- Fund IV (closed 2020): $278M
- Fund V (closed September 2023): $470M ($340M US + $67M international + $30M direct + $30M University of Texas)
- Fund VI (closed March 2025): $400M
- KHCP Fund I (April 2024): $105M secondaries, with Kline Hill Partners
- KHCP Fund II (April 2026): $400M secondaries, with Kline Hill Partners
Portfolio Highlights
Cendana's portfolio consists of seed-stage VC funds they have anchored. Notable portfolio funds include:
- Forerunner Ventures — leading consumer-focused seed fund
- K9 Ventures — pre-seed fund founded by Manu Kumar
- IA Ventures — data and enterprise-focused seed fund
- Bowery Capital — B2B SaaS seed fund
- Founder Collective — entrepreneur-led seed fund with strong track record
- Precursor Ventures — pre-seed fund led by Charles Hudson
- Uncork Capital (formerly SoftTech VC) — generalist seed fund
- Freestyle Capital — consumer and enterprise seed fund
- Lerer Hippeau — leading NYC-based seed fund
- Moxxie Ventures — consumer seed fund (Katie Stanton)
- Credo Ventures — Prague-based seed fund (early investor in UiPath)
The UiPath connection is notable: Credo Ventures, a Cendana portfolio fund based in Prague, was the seed investor in UiPath (now public), demonstrating Cendana's successful international thesis. Credo later disciplined itself to scale back from $125M to $75M — a fund size rationalization that Cendana views positively.
Team
- Michael Kim, Founder & Managing Partner — founded Cendana in 2010 after identifying the sea change happening in early-stage venture before most institutional LPs recognized it; San Francisco
- Kelli Fontaine, Partner — joined in early 2018, transitioned from Chief of Staff to Partner; focuses on GP diligence and LP relations; San Francisco
- Graham Pingree, Partner — joined in 2014 as first team member; Berkeley Haas; Boston background; leads West Coast and international deals; San Francisco
- Thomas Ikeda, Principal — New York
- Tess Gong, Senior Investment Associate — New York
- Julius Dodson, Investment Associate — San Francisco
- Anoushka Patel, Investment Associate — San Francisco
- Joshua Grimm, CFO & CCO — San Francisco
- Jon Coquia, VP of Finance — San Francisco
- Hillary Tyree, Head of Platform & Operations — San Francisco
- Fernandina Ko, Director of Data & Strategy — San Francisco
- Rohan Gandhi, Data Analyst — Miami
Decision Process
Cendana operates as a partnership with three core investing partners: Michael Kim, Kelli Fontaine, and Graham Pingree. The diligence process is thorough and involves:
- Reference checks with founders, co-investors, and later-stage VC GPs
- Analysis of deal flow access and network breadth and depth
- Portfolio construction analysis (ownership levels, fund size optimization)
- Assessment of intangibles — entrepreneurial spirit, founder empathy, "niceness"
- Understanding motivations and long-term vision for building a lasting firm
They look for GPs who are nice — ones that founders want to call at 11pm with a problem.
Geographic Focus
Cendana invests globally with a primary US focus:
- US: Primary focus, especially SF Bay Area and NYC ecosystems
- Europe: Selective investments (European fund sleeve)
- Asia: Active in Singapore and broader Asian markets
- International: Dedicated international sleeve ($67M in Fund V for non-US managers)
Approach to GP Relationships
Cendana builds multi-decade relationships with portfolio fund GPs. They do not ask for special terms (no management company cuts, no reduced carried interest) — they view GPs offering such terms as a negative signal. They expect GP-LP relationships to evolve over multiple fund cycles. They re-invest in top performers and sometimes decline re-ups, but maintain relationship longevity as a core value.
Services to portfolio funds include:
- Portfolio construction advisory
- GP-to-LP introduction facilitation
- Access to Cendana network events
- Data analytics and market commentary
- Strategic advice on building institutional firms
Secondaries Strategy
In 2024, Cendana expanded into VC secondaries via its partnership with Kline Hill Partners. The KHCP vehicles acquire LP interests in seed-stage VC funds from LPs seeking liquidity, addressing a structural mismatch in the venture market where seed fund LP stakes are otherwise difficult to sell. KHCP Fund II ($400M, 2026) is more than triple the size of KHCP Fund I ($105M, 2024), reflecting strong institutional demand for this product.