The 81 Collection raises $82M Fund II to back businesses overlooked by traditional venture capital

Venture capital has spent years chasing software startups, artificial intelligence, and the next billion-dollar unicorn. Chicago-based investment firm The 81 Collection thinks some of the best opportunities are hiding in plain sight: established businesses that make products, deliver services, and generate real revenue.

The firm announced Wednesday that it has increased its second fund to $82 million, doubling the size of its inaugural fund launched in 2021. The latest fundraising brings The 81 Collection’s total assets under management to more than $145 million.

The investment strategy challenges a familiar Silicon Valley playbook. Rather than betting on startups that need years of outside financing to establish a sustainable business, The 81 Collection targets founder-owned companies that already have customers, meaningful revenue, and a proven business model.

Its central argument is that traditional venture capital has overlooked much of the American economy.

According to the firm, industries representing just 19% of U.S. GDP attract 55% of venture capital attention, leaving businesses operating across the remaining 81% competing for a smaller share of investment capital. Those figures reflect the firm’s investment thesis rather than independently verified measurements of VC allocation.

The 81 Collection believes that imbalance creates an opportunity to back businesses that may never become household technology brands but could generate substantial returns through consistent growth and disciplined spending.

“We think that most venture capitalists fund companies that might work. We back the ones that already do,” said Vijen Patel, founder and general partner of The 81 Collection.

“I co-founded Pressbox, now Tide Cleaners, and grew it to 1,000 locations using cash flow. For the 81% of businesses that don’t fit the traditional venture capital model, capital efficiency is an advantage, not a limitation. The best funding comes from your customers, and that also makes businesses last. Until about 40 years ago, that’s how most companies were built. We’ve just forgotten.”

Betting on real businesses instead of the next unicorn

The 81 Collection’s investment criteria reflect that philosophy.

The firm targets companies generating between $4 million and $20 million in annual revenue, with yearly growth of at least 40%. It typically seeks minority ownership positions and expects to invest approximately $8 million to $10 million per company.

Its goal is to become a company’s first and last institutional investor, reducing the need for repeated fundraising rounds.

Fund II has already backed two businesses: Uptiv, a Michigan-based operator of technology-enabled infusion centers, and Terra, an AI-native freight brokerage platform.

The investments illustrate how the firm’s strategy combines traditional industries with technology rather than treating the two as competing investment categories.

The 81 Collection draws on operational experience from entrepreneurs associated with Tide Cleaners and other established businesses. Its advisory network includes Scott Malpass, former chief investment officer of the University of Notre Dame.

The approach carries risks. Manufacturing and service businesses can face labor shortages, rising operating costs, and slower growth than software companies. Minority investments in privately held businesses can be difficult to exit, particularly without the public-market valuations that technology investors often pursue.

Still, the firm’s growing capital base suggests there is investor interest in a different approach to company building.

The timing is especially interesting. Venture capital has become increasingly concentrated around AI companies requiring enormous amounts of financing, even as investors debate how quickly those investments will translate into sustainable profits.

The 81 Collection is making a different bet: Businesses with paying customers, established operations, and strong revenue growth may offer attractive investment opportunities without following the traditional venture-backed startup model.

The bigger question is whether that strategy can produce competitive returns at scale.

For an industry accustomed to financing what businesses might become, The 81 Collection is betting that what a business has already built matters just as much.