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Background Capital was founded in 2019 by Rafael Corrales, a former General Partner at Charles River Ventures. The firm is headquartered in Madison, Wisconsin, having relocated from San Francisco. As a solo GP venture fund, Background Capital focuses on early-stage investments, primarily in pre-seed and seed rounds. The firm aims to support startups that aspire to become leaders in their respective markets.
One of the most distinctive aspects of Background Capital is its entirely founder-backed limited partner (LP) base. This unique structure allows the firm to provide operational support and valuable connections to its portfolio companies. The firm has a history of advising and investing in successful companies, including notable exits like Instacart.
Currently, Background Capital is actively deploying capital through its fourth fund, which follows an earlier $8.75 million angel fund. The firm typically makes 2-3 investments per year, focusing on depth over breadth in its portfolio.
Background Capital emphasizes early-stage investments across various sectors, including enterprise software, climate tech, fintech, and aerospace. The firm operates within a check size range of $100,000 to $5 million, with initial checks typically up to $500,000. The investment strategy is sector-agnostic, but the firm has a concentration in specific areas such as SaaS and healthcare.
The firm is known for its founder-friendly positioning, which enables quick decision-making and fosters direct relationships with entrepreneurs. Background Capital's LP base, composed entirely of successful founders and executives, enhances its ability to identify and nurture promising startups. This founder-to-founder capital network provides operational support, recruiting assistance, and follow-on introductions, making it a valuable partner for early-stage companies.
Background Capital's portfolio includes several notable companies that exemplify its investment strategy. Key portfolio companies include:
These companies illustrate Background Capital's commitment to supporting startups that aim to become fundamental players in their markets. The firm's connections and support have been instrumental in the growth of these companies, showcasing its effective investment approach.
Rafael Corrales - Founder
Rafael Corrales has a background as a General Partner at Charles River Ventures, where he gained extensive experience in venture capital. He founded Background Capital to focus on early-stage investments and has a strong network of successful founders and executives that support the firm’s unique LP structure. His expertise spans various sectors, including SaaS and fintech, and he is actively involved in the growth of portfolio companies.
To pitch Background Capital, startups should visit their website at backgroundcap.com. It is recommended to include a detailed business plan, market analysis, and information about the founding team in the pitch deck. The firm prefers warm introductions through mutual connections, but cold outreach is also accepted. Response times can vary, but founders should expect a thorough review process given the firm's focus on depth in its investments.
In November 2025, Background Capital announced the successful closing of a $250 million Series B funding round for Beacon Software, co-invested with notable figures such as Tony Xu from DoorDash. This investment highlights the firm's active role in supporting high-potential startups.
Additionally, Background Capital continues to maintain a strong presence in the venture capital community, with Rafael Corrales actively sharing insights and updates on LinkedIn regarding the firm’s activities and investment strategies.
What stages does Background Capital invest in?
Background Capital invests in early-stage startups, focusing on pre-seed, seed, seed+ (extension), Series A, and Series B rounds.
What is the typical check size for investments?
The firm typically invests between $100,000 and $5 million, with initial checks generally up to $500,000.
What sectors does Background Capital focus on?
Background Capital invests across various sectors, including SaaS, fintech, climate tech, and healthcare.
How does Background Capital support its portfolio companies?
The firm offers a unique value-add through its founder-to-founder capital network, providing operational support, recruiting assistance, and follow-on introductions from a diverse group of successful founders and executives.
What makes Background Capital different from other venture firms?
Background Capital is distinctive for its entirely founder-backed LP base, which allows for a founder-friendly approach and quick decision-making. This structure enhances the firm's ability to provide valuable connections and insights for startups.
How can startups pitch to Background Capital?
Startups can pitch to Background Capital through their website at backgroundcap.com. It is advisable to include a clear business model, market potential, and team background in the pitch.
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