Washington-based VC firm AAF Management blends startup and fund investing to win deals in the hottest early-stage markets — with strong backing from Abu Dhabi’s Mubadala.
In a venture capital landscape obsessed with scale, AAF Management is proving that staying small and strategic can yield big results. The Washington, D.C.–based firm, co-founded by Omar Darwazah and Kyle Hendrick, has quietly become one of the most connected names in early-stage investing, with support from heavyweight backers like Abu Dhabi’s Mubadala.
Founded nearly a decade ago, AAF has built its reputation on focus over frenzy. Instead of ballooning fund sizes like many of its peers, AAF has intentionally kept its vehicles lean — and highly effective. Its latest vehicle, the $55 million Axis Fund, brings the firm’s total assets under management to $250 million across four funds, including a $39 million Fund II raised in 2021 and a $32 million fund-of-funds launched in 2017.
“Running a $50 million fund is very different from running a $500 million fund,” said General Partner Omar Darwazah. “Large fund sizes can disrupt GP-LP alignment — that’s not a game we want to play.”
A New Model for Venture Investing
What sets AAF apart is its hybrid strategy — a mix of direct startup investments and LP positions in emerging venture funds. About 80% of its capital goes directly into startups, while 20% supports early-stage fund managers, creating a unique ecosystem AAF calls a “one-stop capital-formation partner.”
Through this approach, AAF has backed 25 emerging venture funds and made five direct early-stage and growth investments under the Axis Fund so far. The model offers AAF access to a rich dataset of early private-market deals — the kind typically seen only by limited partners in seed funds.
“We’ve found that the richest dataset of early-stage companies is accessed through LP checks in emerging managers,” said Hendrick.
This strategy has granted AAF early stakes in some of today’s most promising startups, including Current, Drata, Flutterwave, Jasper, and Hello Heart. Through its fund network, AAF also holds indirect exposure to unicorns such as Mercury, Deel, Retool, and emerging AI players like Motion, Decagon, and ElevenLabs.
Building a Network-First Advantage
Rather than offering hands-on operational support, AAF focuses on what it calls “venture network leverage.” Startups gain direct access to 45 active VC funds where AAF is an LP, giving them immediate visibility and connections for future funding rounds.
“Where we add the most value early on is through our venture network,” said Hendrick. “We can inject founders directly into active funds — it’s instant distribution into their ecosystems.”
This network approach appeals to institutional investors — particularly in the Gulf region — who prefer diversified venture exposure without managing dozens of direct relationships. In addition to Mubadala, AAF’s limited partners include U.S., European, and MENA family offices, GPs from leading asset managers, and a publicly traded U.S. company.
Proven Results and Top-Decile Returns
Across its four funds, AAF has made 138 direct investments and backed 39 emerging managers, with 20 portfolio exits totaling nearly $2 billion in value. Its portfolio companies have been acquired by major names like TransUnion, GoodRx, and Affirm. According to Cambridge Associates and Carta data, AAF’s fund performance ranks in the top decile for its vintage.
“Our strategy allows us to identify signal from noise and increase our chances of backing outliers — the 10x, fund-returning companies,” said Darwazah.
As AAF’s hybrid fund model continues to gain traction, it’s clear the firm isn’t just investing in startups — it’s reshaping how venture capital operates. With Mubadala’s backing and a growing global network, AAF is proving that a smart, connected strategy can outperform size and hype in the competitive world of venture capital.
