Living Through the Revenge of Capital

Charles Hudson, Managing Partner at Precursor Ventures, shares an honest take about the emotional toll of investing in harsh markets, and the impact it has on how GPs and LPs relate to existing invest...

How Accurate are “Zombie” Valuations?

For LPs considering selling ten-year-old+ funds on the secondary market, the question is: Are GPs clinging to overstated zombie valuations and thus postponing eventual write-downs, or should LPs expec...

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...

Investors Pour Into Venture Capital Funds Even as Markets Cool

Wall Street Journal VC, tech and startup reporter Heather Somerville spoke with several LP's for their take on the state of the market, including Sapphire Partners' Beezer Clarkson, Cendana Capital's ...

Black VCs Can Make a Bigger Impact With Institutional & Individual Investors’ Help

The share of venture capital dollars managed by Black men and women is less than 1% for each, and Black founders have raised only 1.2% of venture dollars, according to Crunchbase. Geri Stengel profile...

Top VCs Have Expanded into Broader Asset Managers; Is the Model Sustainable?

TechCrunch Editor Connie Loizos sat down with Niko Bonatsos, General Catalyst, and Caryn Marooney, Coatue, at Disrupt to answer the question: Does it make sense that top venture firms now tackle nearl...

‘Me Too’ Investing is Eating Returns

Alan Feld, Founder and Managing Partner at Vintage Investment Partners, wrote a byline in TechCrunch to discuss underfunded areas that could produce huge winners over the next ten years, including alt...

Assure Analytics Report: How VCs Use SPVs

This report analyzes dozens of datapoints around venture capital and SPVs, unpacking adoption, analysis by fund stage and AUM, investor networks, context on the General Partners, management fees and c...

Outperformance: The Power of Power Laws

Which investments generate the greatest venture returns: enterprise or consumer? To answer this, Sapphire Partners' Beezer Clarkson and Evan Tarzian created a database of enterprise vs consumer perfor...

The #OpenLP Podcast Miniseries: Beezer Clarkson, Sapphire Partners

Notation Capital’s Nick Chirls hosts Sapphire Partners’ Beezer Clarkson on the #OpenLP podcast miniseries for a deep-dive on the current state of the LP and VC market, given recent dislocations....

Succeeding in VC is About Knowing What to Buy And When to Sell

There’s a lot of talk about when to buy, but rarely when to sell. With no hard and fast best practices for secondary transactions, Hunter Walk and the team at Homebrew codified their own ruleset....

What’s 🔥 in Enterprise IT/VC #305

Ed Sim, Founder and General Partner at Boldstart, predicts fundraising activity will pick up this fall, but with more diligence; later stage rounds will be still be few and far between; and relationsh...

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...

Family Offices Continue to Invest in Venture Despite Macro Concerns

While investment activity has slowed, family offices expect to capitalize on lower valuations to grow their venture portfolios in 2022. This report includes insights from FOs, perspectives on the stat...

20VC: How to Build Anti-Fragile Venture Portfolios Today

Mike Chalfen guest-starred on 20VC and provided insights on investment mentality, portfolio construction, market sizing, board membership and how he thinks about "managing your career vs the money you...

Preparing for a Downturn: A Playbook for Emerging Fund Managers

In Part 1 of this series, Raise Global shares a playbook for emerging fund managers on how downturns may impact portfolios and the steps VCs need to take now to weather the storm....

Investor’s Framework: An Update

QED Investors co-founder Frank Rotman provides an updated version of his "Investor's Framework" for how to think about corrections and navigate the choppy waters via Twitter @fintechjunkie....

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 ...

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....

An LP Take on VC Portfolio Construction

Is it better to index venture as broadly as possible in the hopes of unearthing winning outliers? Or to concentrate resources on a smaller number of investments, so as to maximize returns on winners? ...

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...

LP Expectations vs. VC Realities

"If exits aren’t in the 10x+ range it’s unlikely to make any difference to a fund other than recycling the capital back into something that you think *can* get you to that 10x+ number." Finn Murph...

Minsky Moments in Venture Capital

'Minsky dynamics' have long been applied to public markets, but how might they inform our understanding of venture? Abraham Thomas walks through the time/risk mechanism that underpins the venture boom...

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....

Busting the Myth That There’s Little Data on Private Companies

Wall Street (and Silicon Valley) always finds a way to fill a vacuum... Institutional Investor "busts the myth that there’s little data on private companies."...

$10B is the new $1B, and we need a new framework for startup valuations

The $1 billion unicorn term has lost most of its meaning, argues Alex Wilhelm of TechCrunch. "We need a new framework for startup valuations."...

Meet the Modern Crypto Venture Capital

Something that many participating firms have yet to fully appreciate: Crypto venture capital is a different game than traditional venture capital. Axios walks us through the differences....

Tiger Global: How to Win

Tiger Global is venture capital's winning machine. Mario Gabriele provides a deep dive analysis on the latest disruption in the tech investing market. Never a dull moment in venture!...

A Twitter Troll’s Take on the Future of Investing

And as venture continues getting shaken up, there are real implications for LPs to keep in mind. Here's one perspective from Logan Bartlett of Redpoint Ventures....

Enduring Truths in Venture

Crypto, web3, Sequoia-type fund restructuring... so much innovation is shaking up the venture industry nowadays! And yet, some "enduring truths" about venture as an industry remain as potent as ever. ...

The #OpenLP Podcast Miniseries: Saul Klein of LocalGlobe and Latitude – Champion of the European Tech Ecosystem

On the latest episode of the #OpenLP podcast miniseries Sapphire chats with European tech ecosystem champion, Saul Klein. Topics include the evolution of venture in Europe over 20 years, the road ahea...

What I Tell All New VCs About Their First Funds

There is a delicate dance in the interplay between check size, ownership and portfolio management. Great insights from Hunter Walk on this topic, and what else new VC need to know....

Follow-on Strategy

Is first check picking a different skill than follow-on picking? Here's an excellent meditation on follow-on strategy from Gale Wilkinson....

How do you attract family offices and other large investors to your direct investing platform?

"I’ve been meeting lately with more family offices interested in investing directly into companies, in lieu of via funds." David Teten shares some of the online platforms that empower LPs by enablin...

Bad Pattern Recognition

"The key is to know when to trust previous patterns and when to ignore them which is anything but a simple task. Sometimes art needs to override science and intuition needs to override history." Incre...

What About Track Records?

John-Austin Saviano, former CIO of the Berkeley endowment chimes in on the track record question: "If it were as simple finding firms with 'great' track records, we’d all just pay for a good databas...

Breaking the Pattern Match: Outperformance Indicators for Venture Capital

Different Funds provides an analysis of 100+ variables around VC funds, paired with performance data, to surface dozens of correlations that can help LPs improve their manager selection process....

Turning the Tables on Notation: Introducing the #OpenLP Origins Podcast Miniseries

Sapphire Partners is bringing #OpenLP to Notation's Origins podcast! Here's episode one of the #OpenLP podcast miniseries, this time featuring Sapphire turning the tables on Notation to chat NYC tech,...

How Emerging Managers Should Consider Incentive Mechanisms

This fantastic Twitter thread from Marco Cesare Solinas of Blue Future Partners advises managers on incentive design: "If there is somewhere you should avoid being creative, it's here."...

Venture Diligence at the Seed Stage

Diligence at the seed stage of VC involves a mix of qualitative and quantitative factors. This fantastic model from Kauffman Fellows runs scenario analysis for your fund and illustrates dynamics arou...

The Essential Guide to Syndicates

This guide defines what a syndicate is, how to work with syndicates, and why you should consider them as part of your fundraising journey as an organizer, an investor, or a founder....

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...

The danger of venture capital ‘foie gras’

Capital foie gras describes the situation of being force fed, or stuffed, with too much money until you, and the company, choke. With interest rates at an all time low, SPACs everywhere and tech bei...

VC Market Dislocation: The Fundamentalists vs The End Marketers

Various go-to-market strategies among VC firms are starting to lead to a bifurcation in the VC market. Here's how "fundamentalists" and "end marketers" approach things....

Does Your VC have an Investment Thesis, or a Hypothesis?

VCs love to talk investment theses: on Twitter, Medium, Clubhouse, at conferences. And yet, when you take a closer look, theses are often meaningless and/or misleading....

How Emerging Investors Can Think About Their Value Proposition To Founders

Venture capital as an offering has long been defined in terms of capital and value-add. This leaves aside important nuances that need to be acknowledged. What exactly are the differences between inves...

Simplifying the SAFE

Since Y Combinator first introduced the “SAFE” in 2013, early-stage deals have exploded. That’s not to imply a direct, causal link, but SAFEs have become the de facto securities instrument for ...

Quantitative Approaches to Venture: Why we are not there yet (Part 1)

In the era of big data and AI, not surprisingly we started to see more and more venture capital managers adopting new quantitative investment processes and frameworks....

Quantitative Approaches to Venture: Lessons from Chess (Part 2)

In venture capital, we are also seeing an increasing number of managers using scoring methodologies to make their final investment decision. Such scoring models basically consist of creating a weighte...

The VC Framework For Optimizing Success: The Kauffman Fellows Four Pillars

The venture capital industry is as asymmetrical an industry as any; the top 1% to 4% of venture investments usually get the outsized (10x+) returns.  However, this begs the question: is investing in...

The Fight For Ownership

I am stating the obvious in this opening sentence, but I need it for the post: In each round of funding for a startup, the founders sell a portion of their equity in exchange for cash....

Pitfalls LPs Need to Avoid When Co-Investing Directly in Startups

At Village Global, an early stage venture firm where I am a partner, we have the privilege of working with several of the largest family offices in the world, along with university endowments and oth...

When Entry Multiples Don’t Matter

OH in South Park, San Francisco (or on Zoom from Big Sky, Montana): “OMG, crazy – that firm just paid 100x revenue to invest in [insert hot startup here] – what could they be thinking?”...

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,...

Know Your Edge As A VC, Part Three: Structural Edge

Limited Partners need to assess a GP’s competitive advantage when considering an investment in their venture fund. If you want to raise a fund you need to know your edge. This three-part series prov...

Know Your Edge As A VC, Part Two: Analytical And Behavioral Edge

As a venture capital fund manager, you need to convince potential LPs about the attractiveness of a potential investment in your fund. Part of the LP’s due diligence is their evaluation of your edge...

20VC: Oren Zeev On Why Diversification Is Overrated, The Downside Of Thematic Investing, Making Quality Decisions In Uncertain Conditions & Why He Has No Reserves Allocation

Oren Zeev is the Founding Partner @ Zeev Ventures, one of the best and most under the radar firms in the early stage Silicon Valley landscape. Over the past decade, Oren has backed the likes of Trip...

Know Your Edge As A VC, Part One: Informational Edge

The relationship between venture capitalists and founders is well discussed and understood. But another side is also critical in venture capital: the VC’s relationship with limited partners, or LPs�...

Venture Capital Due Diligence: The Screening Process

The goal of screening is to whittle down from potentially thousands of investment opportunities those that are eligible for consideration given a VC funds’ philosophy, stage and sector preferences, ...

Seed funding terms — it’s the upside, stupid!

At Point Nine, when wrapping up the legal side of a seed round, we focus quite keenly on a small number of contractual terms while we’re much more flexible on others, even those that many other inve...

Industry Ventures riding its bets on emerging managers and seeing them pay off

The firm's hybrid fund-of-funds makes primary investments in small emerging managers....

Crypto VC portfolio construction: the LP’s perspective

Crypto is an emerging asset class and whilst general investment principles are the same as in conventional markets, their application needs to be re-evaluated and sometimes adapted to cryptoassets’ ...

Advice for Emerging Managers in the times of COVID-19

As one of the founders of Equity Summit, I reached out to 59 institutional LPs with a short survey regarding the fundraising climate for emerging managers. Here is what I found out....

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...

CHRISTIE HAMILTON – TWEETING ON ALLOCATION AT CHILDREN’S HEALTH

Christie Hamilton is the Head of Investments at the $2 billion Children’s Health Medical Center of Dallas.  She’s perhaps the most well-followed institutional allocator on Twitter, under the hand...

20VC: INDEX VENTURES PARTNER, MARK GOLDBERG ON THE QUESTIONS FOUNDERS MUST ASK A MULTI-STAGE FUND BEFORE TAKING THEIR MONEY AT SEED

Mark Goldberg is a Partner @ Index Ventures, one of the leading venture firms of the last decade with a portfolio including the likes of Dropbox, Revolut, Supercell, Plaid and Transferwise to name a...

What Did I Learn From the First VC Check I Ever Wrote?

The first check I wrote was just over 10 years ago into a company called Invoca who just announced a new $56 million in funding led by Scott Hilleboe at HIG Growth Partners. I thought this was a ...

The Venture Capital Math Problem Revisited (aka How Could You Be So Wrong?)

I argued that the venture capital business could not sustain more than $20bn a year of new capital coming into it and continue to produce good returns to the investors in VC funds.  The venture capit...

Deriving a venture capital strategy in crypto: the LP’s perspective

Deriving a VC strategy in crypto is hard and requires a) the definition of the opportunity set, b) the right structuring, c) a good strategy to deal with earlier liquidity, and d) an innovative view o...

20VC: LESSONS FROM 150 ANGEL INVESTMENTS INTO THE LIKES OF CARTA, GUSTO, AIRTABLE AND SUPERHUMAN, CREATING ALGORITHMS AND MODELS FOR INVESTING AT SEED

Jude Gomila is the Founder & CEO @ Golden, creating the world’s first self-constructing knowledge database built by artificial and human intelligence. To date, Jude has raised from some of th...

“Portfolio Construction” w/ Beezer Clarkson, Alda Leu Dennis and Trae Vassallo

This is a special episode of Origins focused entirely on the concept of VC portfolio construction. We recorded this discussion as a panel with three guests that provide different perspectives on this ...

20VC: PORTFOLIO CONSTRUCTION, OPTIMISING SPVS, OPPORTUNITY INVESTING: SUMEET GAJRI, CHIEF STRATEGY OFFICER @ CARTA

Sumeet Gajri is the Chief Strategy Officer @ Carta, the startup that helps companies and investors manage their cap tables, valuations, investments, and equity plans. Sumeet is largely responsible f...

Time Diversity In VC Portfolios

A topic that’s been on my mind a lot in 2019 is “time diversity” in venture capital funds. There’s more about this topic all over the web, but the basic gist is — when building a VC portfoli...

20VC: HOW TO THINK THROUGH PORTFOLIO CONSTRUCTION AND THE BUSINESS MODEL OF VC

Adam D’Augelli is a Partner @ True Ventures, one of the West Coast’s leading early-stage funds with a portfolio including the likes of Fitbit, Peloton, Hashicorp, Tray.io, Ring, Automattic (mak...

6 Lessons Learned 6 Years Into Co-Founding a VC Fund

In honor of 6 years of Work-Bench, here are 6 lessons learned from co-founding and scaling a VC fund:...

Which investments generate the greatest value in venture: Consumer or Enterprise?

One of our favorite areas to explore is: as a venture investor, do your odds of making better returns improve if you only invest in either enterprise or consumer companies? Or do you need a mix of bot...

Surviving a Coming Storm: Explaining the Unique Factors Driving a Tech Market Correction, and How Technology Founders and Investors Can Persevere Through It

2019 appeared to be a banner year for the technology markets. The year ushered in a boom in public market liquidity, with unicorns such as Uber, Lyft, and Pinterest going public before the end of Q2....

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...

20VC: HAYSTACK’S SEMIL SHAH ON HOW FUND STRATEGY CHANGES WITH FUND SCALING & WHY THE HARDEST CHALLENGE IS PRICE DISCIPLINE

Semil Shah is the Founder & General Partner @ Haystack, one of the valley’s leading seed funds of the last 5 years with a portfolio including the likes of Instacart, DoorDash, Carta, OpenDoor,...

New Research: How to Find a VC That Best Fits Your Startup? Ask For Their LP List

There aren’t many things more important for startup founders than finding the right investor. While finding a match has traditionally been daunting, we are slowly beginning to understand what really...

BFP #OpenLP Series — How we assess fund investments: (2) MoIC & DPI

What are MoIC and DPI? Multiple on Invested Capital (MoIC) is calculated by dividing the fund’s cumulative realized and unrealized value by the total dollar amount of capital invested by the fund....

To Follow-on or Not to Follow-on, Part 2 of Un-learnings from a VC-Turned-LP

In the investment world, FOMO, fear of missing out, runs rampant. VCs and LPs both dread “missing out” on those asymmetric exits that generate millions or billions of dollars....

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 ...

Why Europe Now?

Top Tier Capital Partners (“TTCP”) has been evaluating the venture capital industry for twenty years. As we analyze the market across various regions, we look at three metrics in particular – in...

Crypto VC Portfolio Management: Navigating the Opportunities and Challenges of Illiquid Liquidity

Portfolio management for traditional venture capital funds has historically been relatively straightforward. The big decisions are number of deals per fund, initial check size and follow-on/reserves s...

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...

Your Portfolio Is Your Path

You are the average of the five people you spend the most time with. You are what you eat. About a year ago, I tracked down a VC who gave a talk I heard about where he referenced the phrase “Your po...

Venture Capital Blind Spots: The Top 7 Reasons Why VCs Miss Billion-Dollar Outcomes

This post is Part II in our series on venture capital investment strategy, following the “Circle of Competence and the Venture Capital Investing Triangle”. In that post, we defined the Venture Cap...

BFP #OpenLP Series — How we assess fund investments: (4) PORTFOLIO CONSTRUCTION

Having in previous articles in this series looked at performance metrics, we will now turn to other important aspects of our due diligence process. How a VC fund manager plans to construct their fund�...

BFP #OpenLP Series — How we assess fund investments: (3) IRR

IRR reflects the Internal Rate of Return, taking into consideration the capital returned and the time at which the capital flows. It is designed to take into account the time value of money, reflectin...

BFP #OpenLP Series — How we assess fund investments: (2) MoIC & DPI

Multiple on Invested Capital (MoIC) is calculated by dividing the fund’s cumulative realized and unrealized value by the total dollar amount of capital invested by the fund. Distribution to Paid-...

BFP #OpenLP Series — How we assess fund investments: (1) TVPI

Total-Value-to-Paid-In-capital (TVPI), or the investment multiple, is calculated by dividing the fund’s cumulative distributions plus its residual value by the amount of paid-in capital (as opposed ...

Thinking About Returns

Our Syndicate Fund is a venture-focused strategic fund of funds. Our work puts us in contact with funds across the country. All told, we talk to a lot of fund managers… and hear a lot of the sam...

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” ...

Monetizing Venture Round Access Through SPVs

At a basic level, venture capital success comes down to the quality of sourcing, selection, access, value-add, and the exit. The latter two aspects are perennial differentiators that will likely remai...

Building A Venture Capital Strategy For A Private Equity Investor

As an asset manager and active LP in Venture Capital funds, we have lots of conversations with other LPs on how to build a strategy in the asset class. We wanted to publicise our thoughts here and are...

The 80/20 Rule In Venture

The Pareto principle states that when thinking of cause and effect, 80% of the effect is driven by 20% of the cause. In our industry, this can be translated to 80% of the returns are driven by 20% of ...

Winning By Losing In Early-Stage Investing

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Why Enterprise Funds May Return More Capital Than Consumer Funds

This is the first part in a series of writings on enterprise and consumer investments in venture capital (VC). Stay tuned for upcoming posts as we explore investment and exit trends related to this to...

Key Criteria For Creating A Successful First Time Fund

Managing Director and CEO of Top Tier Capital Partners, David York, wraps up the venture capital fundraising session at SuperReturn International 2016, outlining some of the key criteria for creating ...

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...

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...