December, 2025 - Cup of Zhou

Ben Choi from Next Legacy joins David on El Pack to answer your questions on how to build a venture capital fund. We bring on 3 GPs at VC funds to ask 3 different questions.

Gilgamesh Ventures’ Miguel Armaza, also host of the incredible Fintech Leaders podcast, asks Ben what is the timing of when a GP should consider raising a Fund III.

Similarly, but not the same, Strange Ventures’ Tara Tan asks when an LP backs a Fund I, how do they know that this Fund I GP will last till Fund III.

Arkane Capital’s Arkady Kulik asks how one should think about building an LP community, especially as he brings in new and different LP archetypes into Arkane’s ecosystem.

Ben manages over $3.5B investments with premier venture capital firms as well as directly in early stage startups. He brings to Next Legacy a distinguished track record spanning three decades in the technology ecosystem.

Ben’s love for technology products formed the basis for his successful venture track record, including pre-PMF investments in Marketo (acquired for $4.75B) and CourseHero (last valued at $3.6B). He previously ran product for Adobe’s Creative Cloud offerings and founded CoffeeTable, where he raised venture capital financing, built a team, and ultimately sold the company.

Ben is an alum and Board Member of the Society of Kauffman Fellows (venture capital leadership) and has also served his community on the Board of Directors for the San Francisco Chinese Culture Center, Children’s Health Council, Church of the Pioneers Foundation, and IVCF.

Ben studied Computer Science at Harvard University before Mark Zuckerberg made it cool and received his MBA from Columbia Business School. Born in Peoria, raised in San Francisco, and educated in Cambridge, Ben now lives in Los Altos with his wife, Lydia, three very active sons, and a ball python.

You can find Ben on his socials here:
X / Twitter: https://x.com/benjichoi
LinkedIn: https://www.linkedin.com/in/bchoi/

Listen to the episode on Apple Podcasts and Spotify. You can also watch the episode on YouTube here.

OUTLINE:

[00:00] Intro
[05:05] Ben’s 2025 Halloween costume
[06:44] Jensen Huang’s leather jackets
[07:24] Jensen Huang’s answer to Ben’s one question
[10:05] Enter Miguel, Gilgamesh Ventures, Fintech Leaders
[14:43] What are good signals an LP looks for before a GP raises a Fund III?
[22:35] Why does Ben say ‘established’ starts at Fund IV?
[25:08] Who’s the audience for Miguel’s podcast?
[27:52] In case you want more like this…
[28:32] Enter Tara and Strange Ventures
[32:46] How does Ben know a Fund I will become a Fund III?
[36:53] How does Ben know if a GP will want to build an enduring career?
[40:58] How does Tara share a future GP she’d like to work with to Ben?
[42:43] Marriage and divorce rates in America
[43:34] What should a Fund I do to institutionalize?
[46:28] Should you share LP updates to current or prospective LPs?
[48:57] Enter Arkady and Arkane Capital
[51:09] How does one think through LP-community fit?
[1:01:31] What’s Arkady’s favorite board game?
[1:03:08] Ben’s last piece of advice to GPs
[1:09:50] My favorite Ben moment on Superclusters

SELECT LINKS FROM THIS EPISODE:

SELECT QUOTES FROM THIS EPISODE:

“The dance of fundraising is when you do have [your thesis], the LP has to figure out is this a rationalization of the past or is it actually what happened? Was this known at the time? Because if it was, we can have some confidence in the future going forward. But if it was just a rationalization of some randomness, then it’s hard to know if Fund IV or V or VI will benefit from the same pattern.” — Ben Choi

On solo GPs bringing in future partners by Fund III… “The future unidentified partner is the largest risk that we have to decide to accept. So there actually isn’t a moment where we decide this GP is going to be around for Fund III. It’s actually the dominating risk we look at and we get there, but it’s a preponderance of other things that we need to build our conviction so high that we’re willing to take that risk.” — Ben Choi

“It’s brutal. It’s a 30-year journey. For any GP who raises a single dollar from external LPs, it’s a 30-year journey.” — Tara Tan

“I don’t think anyone goes into this business to raise capital, but your ability to raise capital is ultimately what allows you to be in this business.” — Ben Choi

On community… “Your core question is how much diversity—in the technical term of diversity—can you tolerate before you lose the sense of community.” — Ben Choi

“Most letters from a parent contain a parent’s own lost dreams disguised as good advice.” — Kurt Vonnegut

“Fundraising is a journey of finding investors who want what you have to offer; it’s not convincing somebody to do something.” — Ben Choi

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Stay up to date with the weekly cup of cognitive adventures inside venture capital and startups, as well as cataloging the history of tomorrow through the bookmarks of yesterday!

The views expressed on this blogpost are for informational purposes only. None of the views expressed herein constitute legal, investment, business, or tax advice. Any allusions or references to funds or companies are for illustrative purposes only, and should not be relied upon as investment recommendations. Consult a professional investment advisor prior to making any investment decisions.

This is a blogpost where I’ll risk sounding like an asshole. Probably am already one to some, although I try not to be.

My job—as well as all other investors, hiring managers, talent agents, sports scouts, just to name a few—is to make decisions relatively quickly when faced with the pure volume of inflows. Not necessarily investment decisions, but in a brief interaction, it’s my job to figure out if I want to continue spending time with someone. And if I do know, I need to set expectations clearly as soon as I can. Usually within the first interaction. Because of that, I find it useful to develop heuristics.

(max age at which the knowledge one has today would still be impressive) – (age today) = (# of F’s given)

Where… negative F’s is a lost cause. You’re too late to the game. Zero F’s means it’s to be expected. Expectation meets reality. And the larger the number of positive F’s given, the more impressive you are.

Let me contextualize this.

Today, I know that 7 x 8 = 56. Not impressive at all. I’m 29, at the time of writing this post. The max age knowing what 7 x 8 is, and still be impressive, is probably 5 years old.

The Pythagorean Theorem probably caps out on the “impressive scale” at 8 or 9-years old before it’s to be expected. Maybe 10. There are some pieces of knowledge that have an expiration date on impressiveness. If you know E=mc² at 6-years old, you might be a genius. If you brag about it at 30-years old, people will wonder what you’ve done with your life. That’s not to discount the folks who spend their life on the actual intricacies of the equation. There is also an age where it starts being worrisome if you still don’t know how to do something. At 10, if you know how to file taxes, people will shower praises at you. At 40, if you don’t know how to file your taxes, people will scoff.

The interesting thing is it extends beyond simple math. In venture, there is a certain point in your career that you need to know what pre- and post-money SAFEs are. You need to know the responsibilities of a board member, if you want to be a lead investor. You need to know how to file your K-1’s. You need to know what qualifies for QSBS. If you’re three months into your job as a VC, I don’t expect you to know how to negotiate pro-rata rights when a downstream investor wants you to sell a piece of your equity so they can keep their ownership targets. If you’re a VC, and not a GP, I don’t expect you to know the difference between a 3(c)(1) and a 3(c)(7) entity and that if you have a 3(c)(1) structure, then any LP owning more than 10% will be subject to the look-through rule and every single underlying LP in theirs counts as a beneficial owner and counts towards your 100 investor cap.

There is also so much free content online at this point that the max age where someone will still be impressed by a certain skillset or knowledge will continue to decrease as media democratizes knowledge. Made even easier with AI. Although do take niche knowledge generated by AI with a grain of salt.

The second part, which is equally as important, is: How did you acquire that piece of knowledge? For instance, one of the common “Would you rather?” assessments when I first jumped into venture was: Would you rather invest in someone who graduated from MIT with a 4.0 GPA or someone who took every free computer science course online to learn to built a software product? The common consensus on our team was the latter. The latter shows drive and intrinsic motivation. Critical for someone who’s a founder. Aram Verdiyan and Pejman Nozad call it “distance travelled”, a terminology I’ve since borrowed.

As such, both the insight and the insight development matters. It’s what I look for when I have an intro conversation with a GP and/or founder. It’s what I seek when I go to an investor’s annual summit. So much so, that in my notes, I keep track of who has the highest “insight per half hour.” And I have an extreme bias towards those who have something insightful to share almost every time I have a conversation with them, as well as those who accumulate insights faster than others.

Of course, this isn’t the end all, be all heuristic, but I find it helpful as a rough rule of thumb when a GP claims to have insight in a given area.

Photo by Ethan Hoover on Unsplash

Stay up to date with the weekly cup of cognitive adventures inside venture capital and startups, as well as cataloging the history of tomorrow through the bookmarks of yesterday!

Month: December 2025

When Do You Know If You’ve Grown Up as a VC? | El Pack w/ Ben Choi | Superclusters

Insight Per Half Hour

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