Drafted Ventures: Poker Star Fedor Holz Launches VC Fund of Funds

Fedor Holz, once the world's top-ranked poker player, is moving deeper into venture capital. Together with Instaffo co-founder and CEO Christoph Zöller, he has launched Drafted Ventures, a fund of funds that backs young VC funds rather than startups directly.

According to Zöller, the fund has already raised more than €15 million at its first closing. The hardcap is set at €25 million. Drafted plans to invest roughly €1 million each in about 20 early-stage VC funds, which would give it indirect exposure to around 400 startups. "Our goal is to build one of the best funds of funds in Europe," Zöller says.

From the poker table to investing

Holz won prize money in the millions and topped the world poker rankings in his early twenties, earning the nickname "German Wunderkind". He then turned to entrepreneurship, founding the meditation app Primed Mind, which was meant to compete with Headspace, and the learning platform Pokercode. As an investor, he has so far backed around 30 startups and 20 funds.

The two met almost ten years ago at a learning day of the Entrepreneurs' Organization, when both were just starting out. They have since become close friends. For roughly six years, each has invested privately in VC funds, and together they have made more than 35 fund investments, from small early-stage funds to large later-stage ones. Those conversations led to the idea for Drafted.

Why a fund of funds

Zöller argues the market does not lack good VC funds. Instead, many investors lose money over the long term or earn less than the asset class can deliver. Unlike in the stock market, buying an index does not work in venture capital, he says. The asset class is attractive only if you back the best 25 percent of funds, and more than half of all VC funds offer no especially attractive return profile.

Holz says poker taught him to make decisions under uncertainty and to separate the outcome from the quality of the decision, a skill he considers essential in venture capital, where results often take eight to ten years to show. He also draws a parallel between spotting promising young players and picking emerging fund managers. Zöller contributes the founder's perspective, Holz that of an investor who has priced risk throughout his career.