Seed to Harvest Podcast with Jaclyn Hester

In the latest episode of Paige Doherty's 'Seed to Harvest' Podcast, Foundry Partner Jaclyn Hester shares best practices for emerging managers around capital calls, networking, annual meetings, managin...

Why VCs Explaining “It Was Only 4% Of Our Fund” Is Misleading Minimization When a High Flying Startup Implodes

Hunter Walk, Partner at Homebrew, shares an honest take on the realities of what happens to a venture portfolio when a highly-valued startup implodes - even if dollars invested is a small percentage o...

A Look Back at Our Letters to our LPs and Capital Exuberance

Michael Eisenberg lifts the curtain on a particularly classified aspect of venture capital and shares a rare glimpse of Aleph's LP letters over the last few years. A look back at the flood of capital ...

Venture Demystified: Reserves and Follow-ons in 2022

Suranga Chandratillake, General Partners at Balderton Capital, shares institutional wisdom around reserves, particularly in this new and challenging investment market. Whether you're an entrepreneur o...

Running a VC Fund & Investing in Startups Are Not Always Synonymous

After receiving many cold emails from aspiring VC fund managers asking for investment advice, Elizabeth Yin, co-founder of Hustle Fund, realized people often conflate running a VC fund and investing i...

Valuing a Venture Capital Portfolio

Fred Wilson shares best practices and rules to live by for valuing a VC portfolio quarterly, and how USV does this conservatively and consistently....

Preparing for a Downturn: Strategies for Managing an Emerging Venture Capital Firm

In Part 2 of its series “Preparing for a Downturn,” Raise Global shares six strategies for emerging VCs managing the business side of a VC firm during a downturn....

The Partnership

There are many models for building and managing investment firms. Fred Wilson offers fantastic advice on a winning one for early-stage VC....

IRR is a Vanity Metric

IRR is a vanity metric - "Much too easily manipulated and in some cases incentivizing behavior counter to the long-term benefit of LPs (and GPs)." So argues Seth Levine of Foundry Group....

Dirty Secret: Venture Reserves are Not Always a Good Thing

Nearly every early-stage manager has a reserve strategy incorporated into their fund model nowadays. BUT… and here’s the dirty secret… venture reserves are *not* always a good thing, says Laura ...

On Deal Attribution

Deal attribution. Important for incentives? Or bad for team alignment and culture? Mac Conwell at RareBreed Ventures shares his thoughts....

The Benefits of Joining an Emerging VC Fund

Thinking about joining an emerging VC fund? Nicole DeTommaso of Harlem Capital helpfully breaks down the *why* in this great thread....

The Denominator Effect in Venture

Markets contract and LP asset class allocations need rebalancing. It's the circle of (venture) life. Here's how the denominator effect will hit the VC market....

Reservations About Reserves

"The greater your confidence in stable prices in the fundraising market, the more likely you are to double down with follow on investing. The less confident, the greater your reservations about reserv...

“Why Seed Funds are Going to Start Investing in More Companies”

Is seed fund math changing before our very eyes? Is 40 companies per fund the new 20? Portfolio construction food for thought from Henri Pierre-Jacques....

Family Offices: Leveraging SPV’s as Alternative Asset Allocations Grow

2021 was a breakout year for Family Office usage of SPVs, and "SPVs are a rapidly emerging component of the family office toolkit," finds a new study from Assure Analytics....

VC ‘funds of funds’ are on the rise as investing ecosystem becomes more complex

On the rise of fund of funds in Europe: "The hot new thing is VCs launching their own LP arms to get access to specialised funds and boost their reach and competitive clout, especially in early-stage ...

Web 2.0 Investors Aren’t Cut Out for the Web3 World

Investing in Web3 companies requires a top-to-bottom rethink of the investing model, from how you’ll make distributions to your LPs all the way down to how you set up your fund....

Venture Firms Push Fund Caps Out of the Way

The size of a fund drives its strategy. So what does it mean when there is no hard cap during a fundraising process?...

Reserves Strategy Tradeoffs

Every fund manager wants to know what the optimal reserve strategy is for their fund. The answer: There's no magic formula... but there sure are a lot of tradeoffs either way! Check out this thread on...

Strategies for Optimal Follow-On Investments

Post-launch, a fund manager’s focus shifts from portfolio construction to active portfolio management — and a frequent pain point is follow-on reserve sizing on active deals....

How and Why VCs Recycle Management Fees

Hustle Fund's Elizabeth Yin takes on how and why VCs recycle management fees in this super helpful Tweet thread....

On VC Scout Programs

The easiest way to work with and for VC funds is as a scout, getting paid for sourcing investments. But how do you do that? Here's how VCs structure scout programs: how much they pay, carry structure,...

Fundraising Pacing and the Value of Time Diversity

Have venture funds really been deploying and raising faster than before or does it just seem that way? Let's look to the data! Beezer Clarkson shares thoughts on fundraising pacing and the value of ti...

How Does Seed Stage Fund Math Work?

Ownership targets, fund sizes, check sizes... so many variables to consider when modeling a fund's potential. Here Henri Pierre-Jacques helpfully walks us through the seed fund math....

VC Exit Model

This VC exit model from Nicole DeTommaso is extremely helpful. It allows investors to see their exit potential at different check sizes. Give it a whirl!...

How Much Do Early Fund Performance Metrics Really Tell You?

How are fast markups changing the game for recent fund vintages? And how reliable of an indicator can recent fund vintage performance *really* be? Excellent Tweet thread from Rob Go digs in on this to...

How VC Firms Decide: Considerations On Decision-Making Structures

Who decides what deals get done? A VC firm's decision-making process is a critical component of it's overall governance. Here are some different models to consider, courtesy of Blue Future Partners....

How LP Protections Play Out in First-Time Funds’ LPAs

From bad leaver clauses to provisions on launching successor funds, protections are in place for investors backing first-time funds. Here's how LP protections are making their way into LPAs....

A Lesson on Quarterly LP Letters

Want to see what a fantastic quarterly LP letter looks like? Josh Wolfe of Lux Capital provides....

An Emerging Manager’s Not-So-Secret Superpower

A thoughtful choice of foundational software and services can enable first-time investors to invest and operate like the full VC team of yesteryear. More on "an emerging manager’s not-so-secret supe...

Why every first-time fund manager needs a fund administrator

Becoming an institutional VC means knowing when to selectively outsource complexity. Here's "why every first-time fund manager needs a fund administrator."...

Structural Problems Of Incentive Alignment In VC

Incentive alignment is *fundamental* to VC corporate governance, and also crucial for a firm's long-term success. Here's where misalignments can arise between GPs + LPs, and thoughts on how to best av...

VC Performance Metrics For Early Stage Funds Beyond Common Multiples

In the early stages of the life cycle of a fund, the most frequently used performance metrics (MOIC, TVPI, DPI, IRR) may not be very reliable... So what are the key VC performance metrics beyond just ...

VC Incentive Mechanisms For Venture Partners, Scouts And Ambassadors

"Ensuring that Venture Partners, Advisors, Scouts or Ambassadors have the right incentives is absolutely critical." More on properly incentivizing external VC collaborators from the Blue Future Partne...

Assessing the World of Opportunity Funds

Opportunity funds are growing by leaps and bounds. But, like all things, it's a game of tradeoffs. Samir Kaji masterfully unpacks the who/why/how of opportunity funds in this great blog....

Multi-Stage Portfolio Construction Tool

Monte Carlo simulations, power law curves, valuation step-ups, and more... This fantastic interactive modeling tool from Kauffman Fellows lets you test out various multi-stage VC portfolio constructio...

How Firms Are Seizing the Opportunity Funds

"In 2019, non-flagship funds (opportunity funds, SPVs) raised $13.2b across 190 vehicles, ~1/4 of total VC assets raised that year in the US. These types of funds have been outpacing the growth of the...

The 2021 VC Tech Stack

"What's the best tech stack for VCs?" It's a question that we all ask ourselves routinely. Here's some crowdsourced insight, courtesy of Miguel Pinho of Seedcamp....

Top 10 Learnings from an Emerging Manager Program

In this very popular Tweet thread, Paige Finn Doherty shares her key learnings from Sutton Capital's Emerging Manager program....

Avoiding Venture Capital Fund Administration Headaches

For venture investors, fund administration and reporting is no joke. Luckily, Elizabeth Kraus of Mergelane is willing to share "some of the easily avoidable administrative mistakes I’ve made over my...

Should You Give an Anchor Investor a Stake in Your Fund’s Management Company?

Raising capital for a new fund is always hard. Should you give preferential economics or other benefits to a seed anchor investor, who makes a material commitment to the fund?...

Capital Gains Taxes May Be Coming, But Probably Not For Emerging Managers & LPs

There has been lots of chatter lately regarding the QSBS exemption in Biden's tax plan and what the downstream effects on early-stage investing might be. Here's the explainer you need to understand th...

Fund Recycling Moves the Needle for Both LPs and GPs. Here’s How.

For as powerful of a mechanism as fund recycling can be, we believe it is an under discussed strategy in venture investing. It can transform a good fund into a great fund, and a great fund into an ev...

Venture Fund Portfolio Construction Tool

This interactive tool from Kauffman Fellows explores venture portfolio construction and the various trade off implications a GP must consider. It enables you to construct your own portfolio to underst...

2020 State of Terms: Venture Capital Benchmark

A little over two years ago, we published our State of Terms report, benchmarking a series of terms and trends in the venture capital industry. The report was a watershed moment of transparency for t...

Building the “YC for Fund Managers” and Tips for Launching a Firm

As the Emerging Manager world continues to grow, so does the importance of providing these managers with key education, resources, and community. Enter Oper8r, founded by Welly Sculley and Winter ...

Flexible VC, a New Model for Companies Targeting Profitability

More and more startups are pursuing Revenue-Based VCs, but “RBI” doesn’t fit everyone. A new category of VCs have emerged offering a hybrid between VC and RBI, which we call “Flexible VC”....

Deena Shakir from Lux Capital speaks about firm culture, solving the diversity issue, and how portfolio management is a team sport

Deena Shakir is a General Partner at Lux Capital, a firm founded in 2000 and has since raised $2.5 billion. Lux invests in emerging science and deep technology startups such as Auris Health, Cerulea...

20VC: WHY THE THEORY OF PRO-RATA CAN OFTEN BE FALSE, HOW ROLLING FUNDS IMPACT BOTH PRICING AND COMPETITION

Avlok Kohli is the CEO of AngelList Venture which has facilitated the funding of over 5,000 startups including 47 unicorns and is home to 4,300 funds and syndicates with $2.2B in assets under manag...

Getting the Count Right

Understanding the Limits of Investment Company Act & Optimizing Your Fund Size...

Defining Today’s Opportunities Funds

Top Tier has observed a growing number of funds titled as “Opportunities” Funds in the ecosystem, which can mean many different things. We are continually having to define these fund names interna...

REID HOFFMAN ON HOW TO THINK THROUGH OWNERSHIP AND PRICE IN VENTURE & HOW TO ENSURE VENTURE PARTNERSHIPS ALWAYS HAVE TRUST AND A LEARNING MINDSET

Reid Hoffman is a Silicon Valley stalwart in the modern technology world. On the investing side, he is a Partner @ Greylock, one of the leading venture firms of the last 2 decades with a portfolio i...

LPA Terms for Emerging Fund Managers

Raising a venture capital fund is one of the hardest jobs a VC can do. Just like running for public office or enlisting in special forces, it takes an unusual amount of hard work. But even hard work w...

The Un-American Rule: Legal Fees: Not a Hill to Die On

Most industries have unwritten rules that are shocking when you first learn of them. Often, these rules are so widespread that they become calcified and beyond negotiation. Today, we focus on an unwri...

Sahil Lavingia and Steve Schlafman on new VC structures

In this special episode of Origins, we discuss new VC fund structures with Sahil Lavingia, the founder of Gumroad and manager of one of the top rolling funds on AngelList, and Steve Schlafman, who com...

A Framework for Venture Capital Fund Law

Venture capital fund law is a complex system of rules, regulations, and exemptions. But once you get the principles down, it’s not that difficult to understand the law....

Should LP’s care about GP commits?

Limited Partners (LPs) use various filters and metrics to assess how investable a venture fund is. One of the more heuristic measures is assessing the GP’s alignment with them through the percentage...

Fund Recycling for Early Stage VCs

Recycling has proven to be good for the environment, but it also appears to be beneficial for the performance of PE & VC funds.  At Blue Future Partners we are currently investigating fund recy...

Jon Sakoda: Build Your Fund With Founders By Your Side

Hear how Jon, who describes himself as a “recovering entrepreneur,” started his first company, Imlogic, Inc. which was eventually acquired by Symantec, and then joined New Enterprise Associates (N...

Lions, Tigers, and Rolling Funds, Oh My: Why We Ultimately Decided not to do a Rolling Fund

There has been a lot of talk recently about AngelList’s (AL) new fund structure of Rolling Funds. I have to admit they seem really cool and we thought really long and hard about raising one ourselve...

Two and Twenty: What’s ‘Market’ for Venture Funds These Days?

One of the most frequently asked questions from our venture managers is “What is market?” Whether market refers to terms like management fees and carry, compensation for employees, number of compa...

Why Alignment With Partners, LPs, and Companies is Powerful

Jodi Sherman Jahic is a managing partner of Aligned Partners, a Silicon Valley-based venture fund investing in early-stage, enterprise technology companies that are have a lean toward capital efficie...

Roger Ehrenberg, IA Ventures: The craft of building a top-decile firm

Roger Ehrenberg is the founder and Managing Partner of IA Ventures, an early-stage venture capital firm based in New York City. In this episode, Roger gives a master class on all aspects of starting a...

Thoughts on distribution strategy and CEO/firm misalignment

Much has been written about how to start a venture firm, how to raise money from LPs, how to build one’s product and reputation and how to invest. Precious little has been written about how to retur...

Rolling Venture Funds through the Good Times and the Bad

On February 5, 2020, just before our world was upended by a global pandemic, AngelList announced its Rolling Venture Funds program. Alex Konrad wrote a great piece about the launch. It earned soci...

Carta’s definitive guide to the LPA

So, you’ve decided to launch a new venture capital fund. You’ve got an investment strategy, a management team, advisers, deal flow, and some first close investors lined up who love your ...

My thoughts on the Rolling Fund product

Recently, AngelList's Rolling Fund product has been a frequent topic of discussion within early-stage investing circles. Over the last few weeks, I've had dozens of conversations with LP's and GP's to...

20VC: SAHIL LAVINGIA ON ROLLING FUNDS AND THEIR IMPACT ON THE FUTURE OF VENTURE

Sahil Lavingia is the Founder and CEO @ Gumroad, the company that helps creators do more of what they love. However, most recently Sahil has made waves launching one of the first rolling funds on An...

Will Rolling Funds Roll Over the Venture Capital Industry?

In the world of venture capital, the big news of the past two weeks has been AngelList’s “Rolling Venture Funds.” More than 15 funds have publicly launched on the platform since February, incl...

Understanding Portfolio Construction

One thing that emerging managers are often tasked with is building a fund model. LPs often ask for a fund model because it forces a manager to think through portfolio construction including fund size,...

Discussing Portfolio Construction with LPs: The Surface, the Math, the Execution

Portfolio Construction is one of the most complex and underestimated aspects in Venture Capital. It is complex for three reasons:...

Liquidity Tools for Emerging VC Managers

We deconstruct the opportunities to provide liquidity to micro VCs and emerging managers. Our analysis explores two questions......

Diaspora Ventures explains how AngelList’s rolling venture funds work

A few days ago, Ilan Abehassera and Carlos Diaz announced Diaspora Ventures, their new VC fund. The duo plan to invest in French founders who have a global mindset: They might be based in France ...

GPs and LPs face down new fund structure challenges

Capital on both sides of the table could be in trouble as funds have swelled in size and come back to market faster than ever before.  Here's how GPs and LPs are traversing fund schedules and capital...

Capitalizing on the Post-COVID Economy: Why Distributed VC Teams May Outperform

Anticipating the long-term effects of COVID-19 on venture capital performance: geographically distributed teams might be better positioned to capitalize on trends accelerated by the pandemic....

The VC Tech Stack: Tools for your investor soul

As everything these days seems to move online, it may be a good moment also for investors to sit back and re-evaluate the ways they run their businesses....

VC strategy: managing risk & securing wins with secondaries

Company secondaries are not a minor trend or temporary venture fad. They are here to stay for good reason, and investors and founders alike need to master their effective use to play at the top of the...

#OpenLP Series — Premium Carry

To get a view of market practice we have analyzed the fee structure of the last 100 VC fund investment opportunities - across the US, Europe and Asia-Pacific - which we have reviewed. As per our strat...

Lessons from the Haystack Fund Management Panel

Last week, Haystack hosted an event tailored for emerging fund managers featuring a panel of battle-tested and seasoned GPs. These individuals have many years of relationships with institutional LPs...

Lazy Sunday Musings On Dilution

One big topic newer fund managers won’t likely appreciate in the early days is the effect dilution can have on an early-stage investment. I know this because I had no clue about it when I started. E...

Choosing a Venture Capital Fund Administrator

With MergeLane’s new fund and the growth of our portfolio, we’re improving our fund administration processes and considering a few different solutions. Through this process, I’ve realized that I...

Late-Night Musings On Portfolio Construction

Without a doubt, the concept of “Portfolio Construction” was the most difficult VC fund management concept for me to get my arms around. To be clear before I write this, and before you read it, by...

MEET FIRST ROUND CAPITAL’S NEWEST PARTNER, HOW TO APPROACH GENERATIONAL TRANSITION AS A VENTURE FIRM & THE DANGERS OF ATTRIBUTION IN VENTURE

Todd Jackson is First Round Capital‘s newest Partner having spent the last 2 years as a Founder-in-Residence working with the FRC portfolio. Prior to his time in venture, Todd spent close to 3 yea...

What content should you promote where?

What content do you use in marketing your firm? And what content should go in which place? Your company (or your fund, if you’re a VC) typically has a 7-layer stack of marketing content. In desce...

The VC Industry Norms Which Changed Over The Past Decade

Having spent time around and then in the world of VC in the Bay Area during the last decade, I’ve been reflecting on how different norms in the industry have changed. At the start of 2010, there was...

The Management Rights Letter

A management rights letter is a short agreement between a company and an investor to allow them certain “management rights.” These are typically the ability to attend board meetings, the ability t...

Why Seed Funds Have Scaled

For those following this blog and the seed market over the past decade, you may have noticed that every year, we see increases across the board — more investors, newer funds, and funds that get larg...

Perspectives on Carried Interest

While it has been a discussion topic for some 20-odd years, carried interest taxation entered the public consciousness more noisily in 2016, when presidential candidates from both sides of the aisle e...

Assessing Hustle with the Hustle Fund

Elizabeth Yin, co-founder and general partner at the Hustle Fund, shared her thoughts on how to assess a startup’s ability to “hustle”. Her thoughts are applicable to venture capitalists, start...

Trimming The Hedges, Planning For A Rainy Day

At the end of 2016, folks in the startup tech ecosystem looked toward 2017’s impending “uncertainty.” Then at the end of 2017, the same worry about 2018; rinse and repeat last year, looking towa...

VC Funds 101: Understanding Venture Fund Structures, Team Compensation, Fund Metrics and Reporting

Managing a venture capital firm has many similarities to managing a startup. Just like startup founders, VC firms’ founders pitch investors and raise money continuously. Carry Pools are equivalent t...

Un-learnings from a VC-Turned-LP: Risk and Reward Paradigm Shift, Part 1

Ben Choi has a unique perspective on investment intuition. He started out as a venture capitalist investing in early-stage startups and then became a Limited Partner, which gives him a comprehensive ...

Episode #7: Venture Capital Liquidity: Innovative Solutions for Today and the Future

Venture capital funds are typically structured to have a 10-year lifespan, but venture-backed companies often take more than 10 years to achieve an exit and return capital to their investors. So what...

Generational Transitions at VC Firms

There are right ways and wrong ways to handle generational transitions at venture capital firms. This concept is most often associated with family businesses, which inevitably are required...

BFP #OpenLP Series (6) — VC Partnership Models: How to Split the Economics

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Micro VC Allocation Models

We’re always curious to see how rounds come together when there is limited capacity for both new investors and existing investor pro-rata. For the most part, there is supposed to be one core investo...

BFP #OpenLP Series (5) — How much to charge for an SPV

Many VC managers use single-asset, special purpose vehicles (SPVs) to give their LPs access to direct investment opportunities in their portfolio companies. SPVs increase the manager’s fee-generatin...

Fund Investing Versus Fund Management

When I started out investing (via a fund — not my money), I was just investing based on a simple schedule: About once a month, invest $25K into one company I liked. Pretty easy. Over the years, that...

Using data to shorten VC learning cycles

Max Niederhofer recently wrote a very thoughtful piece reflecting on the psychology of venture capital called “Fear and loathing in Venture Capital”. One of the core points he discusses is how dif...

2018 State of Terms in Venture Capital

The 2018 Different State of Terms in Venture Capital report is the first and most in-depth review of terms and structures that venture capital funds are offering to prospective Limited Partners (LPs)....

Going from a proof of concept fund to an “institutional” venture fund

Over the past several years, we’ve spent considerable time studying and writing about the rapidly evolving emerging manager venture landscape. As illustrated by the chart below (data courtesy of ...

The Future of Data-Driven Venture Firms

Venture capital is built on the business of capitalizing on innovation and disruption. While venture capitalists are adept at identifying entrepreneurs and companies at the forefront of changing trend...

Turning the Tables on Notation Capital

I recently had the privilege of interviewing Nicholas Chirls and Alex Lines of Notation Capital on their Origins podcast about raising their new $27m fund, Notation II. Notation is a“first check” ...

What’s Your VC’s Tech Stack?

VCs are at the forefront of technological disruption, funding many of the latest cutting edge productivity tools. But what tools are they using themselves to automate their own processes? As a glob...

Distributions: Cash Is King

With Snap’s IPO looming, speculation on its success is rampant. As one of our portfolio companies, we too are watching closely. In the last two years, 50 tech companies have listed on U.S. exchang...

The Importance Of Succession In Venture Capital

At TTCP we are seeing more venture firms both in the U.S. and abroad focus on team succession. There are several probable catalysts for increased succession planning: (1) VCs are finally seeing carry...

Confronting The “S” Word: Dealing With General Partner Succession

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Seed Fund Investment Period “Vesting”

I've grown worried lately as tales of Lake Wobegon are fewer and farther between these days and not all the unicorns are good looking and the seed funds are above average. What I'm most worried about...

To SPV Or Not To SPV: Decoding The Pros And Cons

Over the last year, I have fielded several questions from VCs on the Limited Partner (LP) perspective on special purpose vehicles (SPVs), so I decided to write a brief post on how I (as an LP) think a...

Be Fair And Transparent In Your Fee Structure 

A new feature launched by pehub and affiliate publication VCJ allowed you, dear reader, the opportunity to Ask an LP questions about the hottest topics in venture. Anything was on the table and open f...

Various Factors That Affect Portfolio Returns In A Bull Market

Recently, Josh Kopelman publicly released First Round Capital’s quarterly LP letter, stating that portfolio returns in venture capital will be affected by two numbers: entry valuations and exit pric...