In the world of venture capital, the traditional model of a 10-year fund with little liquidity has long been the standard. But according to Michael Pomerleau, co-founder of Singapore-based VC firm Investigate VC, that approach is “lax” and out of step with the modern pace of technology and society.

Investigate VC has  launched its new Fund 2 (I-III) series in May, targeting over $500 million in assets under management across three vintages. The first of these, Investigate Fund 2 (I), aims for a $150 million close to back early-stage companies across Asia, Europe, and North America.

One of the key features of the new fund is its “5+5 year dual-fund design,” which offers investors an option for liquidity after five years. Pomerleau, in an interview with TNGlobal, explained the rationale behind this innovative structure. He pointed to a “massive liquidity issue” in the VC industry, with many funds failing to fully liquidate even after 12 years, forcing investors to take significant haircuts in secondary markets.

“The VC industry has in general taken a lax approach to portfolio exits,” Pomerleau told TNGlobal. “Which by many estimates is leading to only about 1/5 of all funds being fully liquidated after 12 years. And let’s remember, most of these should have been wound up after 10…”

Pomerleau believes the industry needs to “dramatically truncate timelines” to keep up with the fast-paced nature of today’s world. The 5+5 year structure is designed to push both the fund and its portfolio companies to prioritize and create pathways for greater liquidity.

“And let’s not forget that founders face exactly the same issues as investors,” he added, referencing the common plight of being “paper rich, cash poor.” Pomerleau argued that VCs should “pick up much of the slack they have been part of creating.”

Over 1,000 curated early-stage startups will be evaluated annually via proprietary sourcing, refined into 300+ pre-qualified Seed to Series B opportunities per fund. A proprietary decision and scaling engine is also designed to uncover inflection points earlier and accelerate portfolio company performance beyond traditional VC methods.

In the interview,  Pomerleau also shared about the VC firm’s investing strategy and plans, among others.
Below are the edited excerpts:

What specific market opportunities does Investigate VC see in Southeast Asia that led the firm to launch Fund 2 anchored from Singapore?

Southeast Asia is one of the most dynamic and diverse markets globally, with fast-growing digital economies, young demographics, and increasing access to capital. We foresee many global tech champions emerge in the region over the coming 5 years.

As concerns the actual domicile of the Fund 2 series then we see a strong position for Singapore, not least given that Fund 1 is based in Singapore, but how it will evolve over time depends on what makes the most sense for the portfolio and investors.

Will the fund purely invest in Southeast Asia? Is there any particular countries/markets it is looking at? Any particular sector in focus?

No — Fund 2 is global by design, with targeted allocations across Asia, Europe, and North America. That said, Southeast Asia plays a key role in our strategy. Within the region, we’re particularly focused on markets like Indonesia, Vietnam, Malaysia, and Singapore. In terms of sectors, we are as such agnostic, but most keen on industries with potential for positive impact on a larger scale.

Your press release in May highlighted a focus on “deep network effects.” Can you elaborate on what Investigate VC considers a “deep network effect”?

A deep network effect goes beyond the classic “more users = more value.” We look for companies where usage and data generation actually improve the product in a compounding way, and where that improved product in turn attracts more users — a flywheel effect. Even better is when this leads to secondary network effects: unique new products, new revenue streams, or defensibility that wouldn’t be possible without the network itself.

The use of an “AI-powered investment engine” is another interesting aspect. Can you explain more on this?

Absolutely. Traditional VC selection is often gut-driven. We complement human judgment with data and AI — lots of it. Our proprietary engine analyzes data across over 1 million startups, tracks 300+ early investments per fund, and identifies inflection points before they’re obvious.

This includes signals like GTM (go-to-market) velocity, founder-product fit, and real-time traction benchmarks. It gives us a differentiated lens — we can identify breakout potential earlier and help our companies scale faster with tools like OneSource. And ultimately allows us to invest in the 0.1 percent with highest potential.

Fund 2 is the first in a new three-vintage series targeting $500M+ globally. What’s the overarching vision?

The world continues to grow in possibilities and challenges (both at rapidly accelerating pace). One of the primary resources at our disposal to address these are the millions of entrepreneurs globally looking to scale high potential tech solutions.

Among those that are harnessing Network Effects at a greater scale are outcompeting the rest, making them an even more valuable resource.

But the “startup industry” is still in its infancy and lacks constructs that enable investors and corporations to tap this resource for mutual gain across the value chain.

The objective of Investigate VC is to deliver constructs for NE startups and scale-ups with a unique LP proposition to drive returns and scale. Investigate VC does this by building funds and solutions rooted in first principles and tangible assets.

$500M is a start. Investigate targets to exceed $1 billion in AUM through a continued series of vintigate funds over the coming five to eight years.

What other factors or criteria are crucial when evaluating startups for Fund 2?

Aside from network effects there are many. Some of which are well described through the notion of “little giants”. These are companies that will define future domains not by being biggest but by being leaner and faster and crucially have a passion for and excellence within the product and underlying tech stack they are creating.

They are companies that do not live or die in a race to an IPO but instead carefully balance burn (and the weight they carry) with tangible progress. First principles based – zero vanity metrics.

The “5+5 year dual-fund design” is quite innovative. What’s the rationale behind it?

The VC industry has in general taken a lax approach to portfolio exits. Which by many estimates is leading to only about one fifth (1/5) of all funds being fully liquidated after 12 years (and let’s remember, most of these should have been wound up after 10…). The consequence is a massive liquidity issue for funds and LP/investors alike. With many ultimately forced to take a big haircut in the secondaries markets.

Fundamentally, you would also have to ask yourself how a model popularized 50 years ago has not changed. I think we can all agree that technology and society has a different pace now – so why hasn’t the VC industry followed suit and dramatically truncated timelines?

The 5+5 year structure (including an option for LP’s to cash in their position after 5) is to ensure all fund operations consider and help portfolio companies craft pathways that provide both them and investors more liquidity.

And let’s not forget that founders face exactly the same issues as investors – the term “paper rich, cash poor” haunts the industry. It doesn’t have to be that way and VC’s should pick up much of the slack they have been part of creating.

How challenging was it to structure this? What kind of LP conversations were key?

The LP conversations have been easy. They increasingly just have one question which is about “DPI” and hence performance on actual realized returns – never mind returns on the books. This is clearly something LP’s are looking for.

The hard part is executing it. But we do not have concerns given how we have built out the deal funnel and partnerships. It is worth unpacking a bit in terms of some of the key pieces:

1) We have deal flow from Day 0. 300+ portfolio companies to work with on Day 1 for each fund. As opposed to VC’s that raise and then start screening and allocating.
2) The DNA of the portfolio as it were is faster traction and valuation gains (and associated speed through the rounds).
3) We orchestrate networks around network orchestrators and platforms that allow us to create much better opportunities for equity partnerships between corporations, investors and startups at a scale most other VC’s cannot match.

Do you foresee this flexible structure becoming more common?

Definitely. It has to. I wouldn’t be surprised if a 3+3+3 structure becomes popular at some point. Even if you ignored the exponential pace of development in technology (which truncates time horizons) the simple fact that a 10x in 10 years is the same as a 2x in 3 years (in terms of returns), should make you challenge current fund manager strategies.

You’ve worked in both Southeast Asia and Europe. How do the ecosystems compare?

They are each formidable in their right! It is key to be able to harness what each of them bring and crucially connect them.

Singapore’s Investigate VC launches $500M global fund series