Tim Chen Emerges as One of the Most In-Demand Solo Investors

Tim Chen, a solo VC at Essence VC, announced that he has successfully closed his fourth fund, a new $41 million, without actively seeking it. Eager limited partner investors preemptively contributed, he shared with TechCrunch, leaving him with no time to create a pitch deck.

While a $41 million fundraising may not seem substantial given the era of multibillion-dollar firms and solo VCs like Jack Altman—who recently raised a massive $275 million—Chen had no desire to scale up further. This new fund marks an increase from his 2022 third fund of $27 million, which itself was up from a $5 million second fund and a $1 million initial fund.

Chen hadn’t initiated any new fundraising activities because he had been investing from his third fund until last month, which has recently concluded. Interest from limited partner investors began to surge after one of his second-round portfolio companies, Tabular, was acquired by Databricks for around $2.2 billion in 2024.

“That effectively returned our entire fund,” Chen told TechCrunch, noting it helped establish his name in the industry. Suddenly, LPs started hearing his name frequently: on capitalization tables, through mentions by fellow VCs, and via founders citing his insights. They were keen to invest.

Part of this interest stems from Chen’s focus on developer-tool and infrastructure startups at their earliest stages, a segment spiking in demand during the current AI boom.

Chen started his career as a software engineer, gaining recognition as one of the earliest employees at Mesosphere, a notable open-source cloud infrastructure startup funded by Hewlett Packard Enterprise and Microsoft. He later co-founded an AIOps startup called Hyperpilot, which he sold in an acqui-hire deal to Cloudera in 2018.

In 2019, Chen ventured into angel investing and found his passion for it, supporting deeply technical startups such as Jasper, Flatfile, and MotherDuck. “I genuinely enjoyed it. Founders kept appreciating my support and referred me to their peers,” he remarked.

When searching for a new career path, Chen considered venture capital and interviewed at several prominent Sand Hill Road firms but faced rejections from all.

“No one was willing to hire me,” he mentioned. “I’m an engineer and a founder with modest exits. That’s not a usual profile.”

However, Jake Zeller, a friend at AngelList (now running his own fund), encouraged Chen not to lose hope and persuaded him to create his own fund through the platform.

“He said, ‘Tim, I think you could raise a $1 million Fund 1 and give it a shot.’ I was surprised, not realizing that was an option.” Chen recalled, receiving a pitch deck template that allowed him to connect with LPs like Bain Capital.

Notable infrastructure and AI investor Martin Casado from Andreessen Horowitz joined as an LP in later funds, alongside long-time fund-to-fund investor Michael Kim from Cendana Capital. After Tabular’s acquisition, Kim revealed that Cendana had set aside $15 million for Chen’s fourth fund, leaving him astonished.

He also received interest from other investors, some of whom were previous backers like Sapphire and General Catalyst, as well as new individuals. “I wasn’t even fundraising at that point. I was simply deploying capital and enjoying the process,” he explained.

When StepStone urged him to send LP documents for the funding transfer—offering to introduce other investors—Chen decided to get organized and proceed with the fund promptly. AngelList essentially facilitated his fundraising documentation. He cautiously opted for a modest increase from his last fund, remaining humble about his new venture experience.

Backers for Fund IV included figures such as Tomasz Tunguz (a former Redpoint partner, now with Theory Ventures) and Ethan Kurzweil (formerly from Bessemer, now with Chemistry VC).

Chen attributes his rising reputation to his engineering background in infrastructure. “There are very few VCs who share my technical expertise,” he stated, reflecting on how that experience has benefitted his solo investing approach.

While such a profile may not have appealed to large firms, it has proven advantageous for his individual investments. Instead of concentrating on typical VC metrics like traction and sales funnel, Chen aids nascent founders in developing their products.

For example, he invested in a company named ComfyUI that was then focusing on a consumer visual AI product utilizing the open-source Stable Diffusion model. After his investment, Chen recommended that the founders pivot towards becoming a developer platform for the models they were refining.

Comfy-org recently secured a $17 million Series A to challenge prominent closed-source model developers. Their blog post openly acknowledged Chen’s guidance in shaping their strategy.