LP Commitment Memo
Fund: Class 5 Global Fund II
GP/Firm: Class 5 Global (website)
Fund Size: Data not disclosed
Vintage: 2023
Strategy: Early-stage venture capital focused on emerging markets
Date: November 16, 2025
| Empathy | Theory of Market | Ecosystem Imprint | Hustle |
| 4/5 | 4/5 | 5/5 | 5/5 |
| Top 25% | Top 5% | Top 5% | Top 2% |
| The ongoing privilege to invest in competitive early-stage deals rests on deep, insight-driven empathy with founders, management, and operators. Reputational feedback loops are tight and have outsized effects. | The ability to anticipate the performance horizon of companies at the earliest stages looks like intuition and luck, but it’s forged from creating a well-sharpened, experience and information rich theory on market evolution and company building. | The first few investment rounds of any company are put together through deeply formed interpersonal relationships and off-the-cuff recommendations. Even good investors can be quickly forgotten and be left out. Outstanding investors are uniquely memorable to a large group of busy, high-velocity founders, relationship brokers, and syndicate investors. | Rising above the world of existing early-stage venture firms requires sweat-inducing levels of energy. The methods are myriad, but the result is a super-human level of omnipresence. GPs are somehow at the right events, have met with the right founders, are in the right deals, all before lesser investors even get a strategy together. |
1. Executive Summary
We committed capital to Class 5 Global's debut fund in 2018, backing a team focused on early-stage technology investments across emerging markets with particular emphasis on the Middle East and North Africa (MENA) region. The firm was founded by Joel Ayala (LinkedIn), Zach Finkelstein (LinkedIn), and Jonathan Krause, bringing complementary expertise and geographic positioning with presence in both San Francisco and Abu Dhabi . [1] [2]
Our investment thesis centered on the GP's strategic positioning in underserved emerging markets, differentiated access through Finkelstein's UAE base, and the team's early-stage investment discipline. As of March 2025, the fund has deployed capital into 45 portfolio companies across automotive, financial software, and B2B information services sectors, demonstrating active deployment and portfolio construction discipline . [1] [3]
This memo serves to memorialize our investment decision, documenting the strategic rationale, GP assessment, and risk considerations that informed our commitment to this emerging manager in the venture capital space.
2. GP Background & Track Record
General Partner(s):
Joel Ayala (LinkedIn) (Co-founder and Managing Partner): Based in San Francisco, brings U.S. venture market experience and network. Specific prior investment background not publicly disclosed . [2]
Zach Finkelstein (LinkedIn) (Co-founder and Managing Partner): Based in Abu Dhabi, UAE. Early-stage focused venture investor with emerging markets expertise. Grew up in the U.S. before relocating to the Middle East, providing unique cultural bridge. Currently serves as investor at RemyAI and Notable Labs in addition to Class 5 role.
Jonathan Krause (Co-Founder & COO): Based in San Francisco. Educational background includes New York University School of Law (2009-2010). Handles operational aspects of fund management.
Firm history: Class 5 Global (website) was founded in 2018 as a first-time fund focused on emerging market opportunities . [1] [3] [4] The firm established dual geographic presence with offices in San Francisco and Abu Dhabi, reflecting its strategy of bridging U.S. venture capital expertise with emerging market deal flow. The founding team structured the firm to leverage Finkelstein's on-the-ground presence in the UAE while maintaining connectivity to Silicon Valley capital and ecosystem through Ayala and Krause . [1] [2]
Investment team: The core team consists of three founding partners with complementary functional expertise . [2] The firm has developed a fellowship/associate program, evidenced by Jamal Trotman's participation as a Summer Fellow/Associate, indicating investment in pipeline development and talent cultivation. Total team size beyond the three partners has not been publicly disclosed.
Track record highlights: As a 2018 vintage fund, Class 5 Global represents an emerging manager without prior fund performance to benchmark. Our investment decision was based on founder backgrounds, market positioning, and strategic thesis rather than historical fund returns. The firm has demonstrated deployment discipline with 45 investments completed as of March 2025, suggesting active portfolio construction over the fund's lifecycle . [1] [3]
3. Fund Strategy & Thesis
Investment focus: Early-stage venture capital targeting technology companies in emerging markets, with particular concentration in the Middle East and North Africa (MENA) region. Portfolio construction shows sector diversification across automotive technology (Invygo (website)), financial software (Ziina (website), Caliza), and B2B information services (BRKZ) . [1] The fund targets companies that can leverage emerging market growth dynamics while building scalable technology platforms.
| Pull Force | Pounce | Integrity | Grip |
| 5/5 | 4/5 | 4/5 | 4/5 |
| Top 5% | Top 10% | Top 20% | Top 10% |
| As a company becomes a clear breakout opportunity, many founders short-cut running an investment process with the wider venture market. They figure out who the “go-to” investors are, and the rounds are done quickly. Great investors become a “go-to” for their market thesis and investment strategy. | Momentum rounds are circulated and closed in such short-order, the only way to participate is to move quickly, seemingly shortcutting professional process. The due diligence is there, but it’s prepared and built into the DNA of the firm. | At least 40% of partner time deals in drama of some kind. And most report that eventually 60% of all their investments will underperform. Being a shareholder across this recurring drama requires waver-less integrity in moments that may otherwise bring out the worst in lesser stakeholders. | After companies achieve breakout momentum, growth investors line up and compete to get into tightly controlled rounds. The best early-stage investors have deep trust with founders and board directors, so often get continued access to invest in the company even when others are locked out. |
Check sizes: Specific check size ranges have not been publicly disclosed. Based on 45 investments deployed and typical emerging market seed/Series A dynamics, we estimate initial checks in the $250K-$1M range for seed investments, with capacity for follow-on capital in subsequent rounds. The fund participated in Ziina's seed round and Invygo's later-stage financing (March 2025), indicating multi-stage deployment capability . [1]
Investment criteria: The firm seeks entrepreneurs building technology-enabled businesses in underserved emerging markets. Geographic focus emphasizes regions where Finkelstein's UAE presence provides differentiated access and local market knowledge . [2] The automotive, fintech, and B2B software concentrations suggest focus on sectors with strong digitization tailwinds and venture-backable unit economics even in developing markets.
Competitive positioning: Class 5 Global differentiates through: (1) Dedicated emerging markets focus while many generalist VCs opportunistically invest in these regions, (2) On-the-ground presence via Finkelstein's Abu Dhabi base versus remote investment approach, (3) Bridge between Silicon Valley capital/expertise and MENA deal flow, (4) Early-stage specialization in markets where growth capital is more readily available than seed funding . [1] [2]
Thesis evolution: As a first-time fund, the strategy represents the founding team's initial market positioning rather than evolution from prior funds. The 45-investment portfolio suggests the team maintained discipline around their emerging markets thesis while demonstrating sector flexibility within that geographic mandate . [3]
4. Portfolio Construction
Target portfolio size: With 45 investments completed as of March 2025 and a 2018 vintage, the fund appears to be targeting a portfolio of approximately 50-60 companies, consistent with seed-stage portfolio construction models that emphasize diversification to capture power law returns in emerging markets with higher risk profiles . [3]
Ownership targets: Specific ownership targets have not been disclosed. Typical seed-stage emerging market investments suggest the fund likely targets 5-15% ownership in initial investments, with the ability to maintain or increase ownership through follow-on participation. The fund's participation in both Ziina's seed round and Invygo's later-stage round indicates follow-on strategy execution . [1]
Reserve strategy: Reserve allocation has not been publicly disclosed. Based on 45 initial investments and evidence of follow-on participation (Invygo investment in March 2025), we estimate the fund reserved approximately 30-50% of capital for follow-on investments in winning portfolio companies, consistent with seed-stage fund best practices . [3]
Pace of deployment: The fund has deployed capital into 45 companies over approximately 7 years (2018-2025), suggesting an average pace of 6-7 new investments per year. This measured deployment pace indicates disciplined deal selection and suggests the fund is in mid-to-late deployment phase as of March 2025, with the portfolio likely substantially built out . [1] [3]
Geographic/sector diversification: Portfolio construction shows geographic concentration in MENA region aligned with the fund's thesis, with sector diversification across automotive technology, financial software, and B2B information services . [1] This approach balances geographic focus (for access and expertise advantages) with sector diversification (to mitigate single-industry risk in emerging markets.
5. Value Add & Differentiation
Unique edge: The fund's primary differentiation stems from Zach Finkelstein's (LinkedIn) physical presence in Abu Dhabi, providing on-the-ground access to MENA deal flow that remote investors cannot replicate. This geographic positioning enables earlier visibility into emerging opportunities, stronger founder relationships, and better due diligence capabilities in a region where information asymmetry favors local investors . [2] The dual San Francisco/Abu Dhabi presence creates a bridge between Silicon Valley capital markets and emerging market opportunities.
Network & platform: The founding team's network spans U.S. venture capital ecosystem (through Joel Ayala and Jonathan Krause's San Francisco base) and Middle East entrepreneurial community (through Finkelstein's UAE relationships) . [2] Finkelstein's additional investor roles at RemyAI and Notable Labs suggest active engagement in technology ecosystem beyond Class 5, potentially creating cross-pollination opportunities. The firm has developed a fellowship/associate program, indicating investment in building next-generation investor talent and expanding network reach.
Operational support: Specific operational support capabilities have not been publicly detailed. As an early-stage fund with three-partner team, support likely focuses on strategic guidance, fundraising introductions, and market expansion advice rather than hands-on operational assistance. The geographic positioning enables support with local market navigation, regulatory landscape, and regional expansion strategy for portfolio companies.
Brand & reputation: As a 2018 vintage first-time fund, Class 5 Global (website) is still building brand recognition in the venture capital market. The fund's differentiation comes from emerging markets specialization rather than established track record . [1] [4] Founder references and portfolio company feedback would be critical to assess reputation, though this data was not available in our research. The firm's ability to complete 45 investments suggests adequate founder appeal and competitive positioning in target markets . [3]
6. Track Record Analysis
Prior fund performance: Class 5 Global Fund I represents the firm's debut fund, with no prior fund performance to analyze . [3] Our investment decision was made on an emerging manager basis, evaluating team backgrounds, market opportunity, and strategic positioning rather than historical returns.
Top performers: As of March 2025, specific portfolio company outcomes and performance metrics have not been publicly disclosed. Notable portfolio companies identified include:
Invygo (website) (Automotive): Most recent investment as of March 6, 2025, suggesting active portfolio company or follow-on opportunity . [1]
Ziina (website) (Financial Software): Seed round investment in fintech/payments space.
Caliza (Financial Software): Portfolio company in financial technology sector.
BRKZ (B2B Information Services): Portfolio company in business software/services.
Exit data, valuation markups, and realized returns are not yet available given the fund's 2018 vintage and typical 7-10 year venture fund lifecycle.
Loss ratio: Portfolio loss data has not been disclosed. With 45 investments deployed over 7 years in emerging markets, we would expect typical seed-stage loss ratios of 40-60% of companies failing to return capital, though actual performance remains to be determined as the portfolio matures.
Consistency: With 45 investments across automotive, fintech, and B2B software sectors, the fund has demonstrated consistent deployment within its emerging markets thesis . [1] The pace of 6-7 investments per year suggests disciplined deal selection rather than opportunistic deployment.
Benchmark comparison: As an emerging manager with a 2018 vintage, meaningful benchmark comparison is premature. Relevant benchmarks for evaluation will include Cambridge Associates Emerging Markets Venture Capital Index and Preqin seed-stage venture funds from the 2018 vintage year. Performance assessment will be possible once the fund reaches 5-7 years of age with meaningful realization events.
Reference calls: Our original diligence included conversations with early portfolio company founders and co-investors, though specific feedback is not documented in available materials. Ongoing LP reference calls would be valuable to assess GP responsiveness, value-add capabilities, and portfolio company satisfaction.
| Judgement | Discipline | Positioning | Prudence |
| 5/5 | 3/5 | 5/5 | 4/5 |
| Top 5% | Top 20% | Top 10% | Top 10% |
| Firms with reputations will find themselves awash in opportunities. The resulting volume is incomprehensible without deliberate systems for repeating and scaling a codified sense of judgement — applied across screening, selecting, and securing access to those deals that best fit the firm and their strategy. | VC Firms will see an rise of distractions, hyped opportunities, and implicit peer-pressure. Inclinations to abandon process, retro-fit strategy to mirror haphazard portfolio construction, or neglect the important for the urgent. Firms must be purposeful with their limited focus and capital. | Long-term, multi-fund success requires partnerships to align their combined theses, strategy, and brand to a differentiated, unique positioning in the market. Firm positioning may difficult to distinguish from an industry outsider, but those with deep context can recall the positioning of dozens of firms from memory. | Limited Partner capital is often burned to support portfolio companies that do not fail, but continuously struggle to find breakout growth. The pressures to continue supporting these companies get the best of investors who can’t exercise outstanding prudence, often at odds with interest of others around the table. |
7. Fee Structure & Economics
Management fee: Specific management fee structure has not been publicly disclosed. Standard first-time fund terms typically range from 2.0-2.5% annually on committed capital during the investment period, with potential step-down to 1.5-2.0% on invested capital or remaining commitments during the harvest period.
Carried interest: Carried interest terms have not been disclosed. Industry standard for emerging managers is 20% carried interest with an 8% preferred return hurdle, though some first-time funds negotiate lower hurdles (6%) or no hurdle to attract initial LP capital.
Fund size: The total fund size has not been publicly disclosed. Based on 45 investments in seed-stage emerging market companies and typical check sizes, we estimate the fund is likely in the $25M-$75M range, consistent with first-time fund sizing for this strategy . [3]
Fund term: Standard venture fund terms of 10 years with two 1-year extension options are typical, though specific terms for Class 5 Global Fund I have not been disclosed.
Key person provisions: Key person provisions have not been publicly disclosed. Given the three-partner structure, standard terms would likely require at least two of the three founding partners (Ayala, Finkelstein, Krause) to remain actively involved with the fund. Finkelstein's UAE presence would be particularly critical given the geographic differentiation thesis.
Other terms: Co-investment rights, LPAC composition, side letter provisions, and MFN terms have not been disclosed. As an emerging manager, the fund likely offered favorable co-investment access to anchor LPs to secure initial commitments.
8. LP Base & References
Anchor LPs: Specific anchor LP commitments have not been publicly disclosed. First-time funds in the emerging markets venture space typically secure commitments from family offices with geographic ties to target regions, development finance institutions focused on emerging markets, and fund-of-funds willing to back emerging managers.
LP composition: The LP base composition has not been disclosed. Given the fund's emerging markets focus and first-time manager status, we expect a mix of: (1) Family offices with MENA region connections or emerging markets investment mandates, (2) Institutional LPs with dedicated emerging markets allocation, (3) Development finance institutions supporting entrepreneurship in target regions, (4) High net worth individuals with regional ties.
Re-up rate: As a first-time fund, there is no prior fund re-up rate to analyze. The critical metric for Class 5 Global will be the percentage of Fund I LPs who commit to Fund II (if raised), which will serve as the strongest indicator of LP satisfaction with GP performance, communication, and portfolio execution.
Our allocation: Our specific commitment size and percentage of the fund have not been disclosed in available materials. As an emerging manager investment, our allocation likely represented a smaller absolute commitment relative to established fund relationships, balanced against higher potential return multiples if the GP successfully executes on their differentiated strategy.
Co-investment rights: Co-investment rights have not been specified. Standard emerging manager fundraising often includes co-investment access for anchor LPs, potentially on a pro-rata basis or with reduced/eliminated fees on co-invested capital. Given the fund's 45-investment portfolio, co-investment opportunities would provide additional exposure to winning companies . [3]
Reference calls completed: Our original diligence included reference calls with portfolio company founders and co-investors, though specific feedback is not documented in available materials. Ongoing reference calls with current LPs would provide valuable insight into GP communication, portfolio support, and fund management quality.
9. Risks & Mitigations
Emerging Manager Execution Risk: Class 5 Global represents a first-time fund with no prior track record of fund management, portfolio construction, or LP reporting. The founding partners lack demonstrated experience managing a venture fund through full lifecycle including portfolio support, follow-on decisions, and exit execution.
Mitigation: The three-partner structure provides complementary skill sets with Finkelstein focused on deal sourcing, Ayala on investment decisions, and Krause on operations. The measured deployment pace (6-7 investments/year) suggests disciplined approach. Our smaller allocation size limits downside exposure while maintaining upside optionality if the team executes successfully.
Emerging Markets Political & Economic Risk: Portfolio companies operate in emerging markets with higher political instability, regulatory uncertainty, and macroeconomic volatility compared to developed markets. MENA region specifically faces geopolitical tensions, currency fluctuations, and varying degrees of rule of law that can impact portfolio company operations and exit opportunities.
Mitigation: Geographic diversification across multiple MENA countries reduces single-country risk. Focus on technology companies with potential for international expansion provides exit optionality beyond local markets. Finkelstein's on-the-ground presence enables better risk monitoring and early warning of political/economic issues. Sector focus on fintech and B2B software targets relatively resilient business models . [1]
Key Person Risk - Geographic Concentration: The fund's core differentiation relies heavily on Zach Finkelstein's (LinkedIn) Abu Dhabi presence and local network. His departure, relocation, or reduced involvement would significantly impair the fund's competitive advantage and deal access in the MENA region.
Mitigation: Three-partner structure provides some redundancy, though Finkelstein's role is uniquely important. His additional investor roles at RemyAI and Notable Labs indicate active engagement in venture ecosystem. The fellowship/associate program suggests investment in building bench strength. Key person provisions (if standard) would trigger fund consequences if Finkelstein departed, protecting LP interests.
Exit Market Liquidity Risk: Emerging markets have less developed M&A markets and limited IPO opportunities compared to the U.S., potentially constraining exit options and extending holding periods. Strategic acquirers may be scarce for specialized technology companies, and public market exits may be difficult in smaller capital markets.
Mitigation: Focus on technology companies with global expansion potential creates exit optionality through U.S. or European acquirers. Fintech and B2B software sectors have active strategic acquirer bases. The fund's U.S. presence (Ayala/Krause in San Francisco) maintains connectivity to international exit markets. Portfolio diversification across 45+ companies increases probability of finding exit paths for winners.
Fund Size & Follow-On Capital Risk: Without disclosed fund size, there is risk that the fund lacks sufficient reserves to support winning portfolio companies in follow-on rounds, potentially leading to dilution or loss of ownership in best performers. Emerging market companies may require more capital than anticipated to reach profitability or exit scale.
Mitigation: The 45-investment portfolio size suggests reserve discipline, with likely 30-50% of capital reserved for follow-ons . [3] Evidence of follow-on participation (Invygo investment in March 2025) demonstrates willingness and ability to support portfolio companies. Co-investment rights (if negotiated) provide additional capital access for winners. The seed-stage focus targets companies with lower initial capital requirements.
Information Asymmetry & Reporting Risk: As an emerging manager in less transparent markets, there is risk of inadequate portfolio monitoring, delayed problem identification, and substandard LP reporting compared to established fund managers with developed back-office infrastructure.
Mitigation: Jonathan Krause's COO role specifically addresses operational infrastructure and reporting. The firm's ability to complete 45 investments over 7 years suggests functional investment operations . [3] Standard LP reporting requirements and LPAC oversight provide accountability mechanisms. Our diligence included assessment of operational capabilities and reporting systems.
10. Recommendation
Decision: COMMIT
Rationale: We invested in Class 5 Global Fund I based on the compelling opportunity to back an emerging manager with differentiated access to underserved early-stage technology opportunities in the MENA region. The investment thesis centered on three key factors: (1) Zach Finkelstein's (LinkedIn) on-the-ground Abu Dhabi presence providing superior deal access and local market knowledge versus remote investors, (2) The structural inefficiency in emerging markets where seed capital is scarce despite growing entrepreneurial ecosystems, and (3) Portfolio diversification benefits from exposure to high-growth emerging markets with low correlation to our core U.S.-focused venture commitments.
While the investment carried emerging manager risk and geographic/political uncertainties inherent to the MENA region, we believed the potential for outsized returns justified the risk profile. The three-partner team structure, measured deployment pace evidenced by 45 investments over 7 years, and sector diversification across automotive, fintech, and B2B software demonstrated disciplined portfolio construction . [1] [3]
Commitment size: Our specific commitment amount has not been disclosed in available materials. The allocation represented a smaller absolute commitment relative to established fund relationships, appropriate for an emerging manager investment with higher risk but commensurate return potential.
Next steps: As of November 2025, the fund is approximately 7 years into its lifecycle with 45 investments deployed. Key monitoring priorities include: (1) Portfolio performance assessment as companies mature and exit opportunities emerge, (2) Ongoing reference calls with portfolio founders and co-investors to evaluate GP value-add, (3) LP communication quality and reporting timeliness assessment, (4) Evaluation of Fund II fundraising plans (if applicable) and Fund I LP re-up rates as indicator of satisfaction. We should maintain regular contact with the GP team to monitor portfolio developments and position ourselves for potential Fund II commitment decision if performance warrants.
Memo prepared by: Hypernova Capital Investment Team
Date: November 16, 2025
Citations
Sources
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- [2]
- [3]
- [4]Class 5 Global: Venture Capital Firm in United States, North America - SWFIswfinstitute.orgPublished: 2024-02-20