David, Author at Cup of Zhou

November 21, 2025November 20, 2025

Underwriting Things That Don’t Change

One of the most interesting lines I heard on a podcast that Mike Maples was on was: “90% of our exit profits have come from pivots.” Which I first wrote here. Then here. It’s a line that lives rent free in my mind. Ideas, startups, roadmaps, and goals change all the time. I get it. That’s life. Very, very few folks are folks who unilaterally pursue one thing their entire lives. And of those who do, they’re not all successful.

Another friend of mine whose track record speaks for itself, having invested and involved herself in multiple boards before those companies became unicorns and even after, once told me that the idea she invests in is irrelevant. As long as it has grounds and can be adjacent to a large market. The primary thing she looks for is the founding team.

Early-stage investors obsess about people. They’re not wrong. Some are misled by these “VC-isms.” Others still have their own way of underwriting them. I don’t have a crystal ball. I’m also not the smartest person to be dishing out predictions. I have a rough idea of what will change, though I may not always be right. But I don’t know how they’ll change. Or when. So I’ve lived an investing career obsessing over things that don’t change. Or as Naval Ravikant puts it: “If you lived your life 1000 times, what would be true in 999 of them?”

I’ve written about flaws, limitations and restrictions before. But to quickly surmise:

Flaws are things you can overcome. Limited track record. Never managed a team. Never scaled a product. Limited access to capital.
Limitations are imposed by others and/or the environment. Gravity dictates that objects don’t fall upward. There are only 24 hours in a day. If you’re not based in the Bay Area, it’s harder to raise capital. Certain investors prefer co-founders and partnerships. Certain investors care about warm intros. The list goes on.
Restrictions are rules imposed on yourself by yourself. Batman can’t kill. You only invest in solo founders. You only invest in healthcare. You don’t invest in anyone outside the Ivy League schools. But some restrictions go deeper. You’ll never hire from a job portal again. You never hire or invest outside of your network. You won’t invest or hire having never met someone in person. You need to meet their spouse before you make a hiring decision. You don’t invest in single parents. You don’t hire anyone who doesn’t read at least one book per month. You micromanage. You don’t hire anyone who cannot curse. And yes, I’ve heard all of the above and more. My curiosity is always: Why do you impose such restrictions on yourself? What is the story you’re not telling me? Is out of a fear or admiration?

All that to say:

Flaws will and can change if it is a priority. But won’t change if they’re not.
Limitations might change, but it’s outside of your and my control. And I don’t get paid to pray to the weather gods.
Restrictions often don’t change.

Whether you admit it or not, certain habits are hard to change and unlearn. It’s possible. But that requires you to not only be aware of it, but also actively want to change it. Other habits are second nature. How you treat others. How you start each conversation. Why you look both ways before crossing even an empty street. Why you’ve sold yourself a particular personal narrative. Why you have to invest a certain thesis.

The world seems to always be trying to stay on top of things, but there seems to be far less dialogue around how to get to the bottom of things. To me, when it’s underwriting a person and their team, it’s about underwriting what doesn’t change rather than underwriting what could.

Photo by Hc Digital on Unsplash

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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.

November 17, 2025November 16, 2025

Can Your Check Size Win You Board-Level Transparency? | Apurva Mehta | Superclusters | S6E8

“A manager doesn’t generally fit into their ultimate quartile until Year 6.”

Apurva Mehta is the co-founding Managing Partner of Summit Peak Investments, a fund-of-funds that boasts a portfolio of both venture fund investments and direct investments, including the likes of Affirm, Anduril, Airtable, Opendoor, and Wish, just to name a few.

Prior to starting Summit Peak in 2018 with his co-founder, Patrick O’Connor, he previously served as Vice President and Deputy Chief Investment Officer for the Children’s Hospital Endowment Portfolio in Fort Worth, Texa. From 2008 to 2011, he was the Director of Portfolio Investments at The Juilliard School in New York City. Apurva began his career in investment consulting and investment banking at Citigroup and Lehman Brothers. He was recognized for his expertise when he was named to aiCIO Magazine’s Top Forty Under Forty in 2012 and 2013 and honored as a Rising Star by Institutional Investor. He holds a BBA in Finance from The George Washington University.

You can find Apurva on his socials here:
LinkedIn: https://www.linkedin.com/in/apurvaamehta/

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

OUTLINE:

[00:00] Intro
[01:40] Tennis
[02:45] Lehman Brothers’ impact on Apurva
[05:28] What AI is missing in investment management
[14:26] Underestimated qualitative metrics that impact a GP’s story
[22:10] Building Cook Children’s Hospital foundation portfolio from scratch
[30:24] Moving quickly as an LP
[31:32] What does Apurva look for in the first meeting?
[37:20] Ugly sweater Christmas parties
[39:56] Apurva’s favorite ugly sweaters over the years
[41:40] Post-credit scene: What does GFW mean?

SELECT LINKS FROM THIS EPISODE:

SELECT QUOTES FROM THIS EPISODE:

“A manager doesn’t generally fit into their ultimate quartile until Year 6.” — Cambridge Associates

“If everybody’s running the other way—running from the fire, let’s run into it and there’s an opportunity here.” — Apurva Mehta

“When you think about the brand-name firms, they are iconic firms, iconic names. We love the fact that they’re co-invested alongside us. Even if we could build relationships with those firms, we didn’t feel like we’d get the transparency—maybe it was because of our check size, but maybe that’s just because of how they operate—that we needed to go to an investment committee.” — Apurva Mehta

“The transparency at the brand-name firm level is not as high as it is with the kinds of firms we back.” — Apurva Mehta

“Back then, everything was white space, building around network and ecosystems […] It was easier then because the landscape was less crowded. There were 150 backable or quasi-backable seed funds in 2012. 2000 to 3000 now backable and quasi-backable funds in the market. But it was easier then to figure out what we were looking for because it was just brand new.” — Apurva Mehta

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November 13, 2025November 12, 2025

120 BPM

I was on a walk with an LP friend recently around Redwood City. And he told me a remark that another LP had about a mutual investor relations friend we had. That our IR friend started the conversation with, “What are your life goals?” And it alarmed that LP who was meeting our IR friend for the first time. To which, this LP told a few others that he was not only thrown off, but also felt offput by the interaction.

It led to a discussion between my LP friend and I where neither of us, knowing this mutual IR friend, would ever think less of our IR friend because that’s just how this person operates. But to someone who has no context of our friend, it would seem bizarre.

One of my friends who, at one point in time, was a full-time professional DJ, once told me, “The golden number is 120. 120 beats per minute. It’s the rhythm that when you strip all the noise away and you can get a heart to beat that fast, it feels like you’re in flow—flow state. Pure ecstacy.

“But you can’t start the set at 120. If your mix is at that pace, and the heart isn’t, it feels discombobulating. You need to work up to it. Start the set at 70. And over the course of a one- to two-hour set, you work your way up to it. And notice the audience. The crowd must be nodding their head to your beat. And if you ever lose that bob, slow the set down again. And try to catch that heart rate again.”

To this day, probably one of the best pieces of advice on how to hold a conversation I’ve gotten to date. And it was never meant to be so.

A question I get surprisingly often is: “Why did you start the podcast?”

Among many reasons — I get to ask dumb questions to smart people, refine my diligence skillset, get better at asking questions, and so on — one of which was that when I only have an hour and change with someone, I’d rather not spend 10-15 minutes on small talk. How are you? How was the weekend? Which seems to be the LLM that’s coded in us on how to start a conversation and hope eventually, you can get to the meat and potatoes of the conversation. And it makes sense.

To use the DJ analogy above, most people’s resting heart rate is around 60-100. To take the middle of the road, 80. And for busy people who are constantly distracted by meetings and tasks that need their attention, a conversation with a stranger is among the lowest of their priorities. So I always believed that people would be near their resting heart rate when chatting with a nobody like myself. As such, they need icebreakers like “How are you?” to warm them up to the conversation, where their first impression of how you answer that question will indicate where the conversation might go.

On the flip side, most people haven’t been on podcasts. Much less, the guests I aim to have on. LPs. Many typically aren’t given the stage. And even if they are, it’s closed door discussions and private events. Rarely, do they get a public stage. So, the hypothesis was that on average, an LP will most likely be more nervous, excited, you name your fair share of anticipatory emotions jumping on a podcast as opposed to an offline 1:1 conversation. Six seasons in, I’d say we’re pretty close to the mark there.

As such, a faster heart rate means I am often given the privilege of starting the conversation not from “How are you?” but a question closer to 100-110 beats per minute, with hopes we can get into the questions that result in 120+ bpm sooner. And it’s almost always easier to ask a question “for the audience” than for yourself.

“Tell us about the time you proposed to your wife via a billboard. And how does that influence the way you think about pitches today?”

“Half your games on chess.com open with the Ruy Lopez. How do you think about opening gambits when you play white. And how much, if at all, does it influence the way you think about opening a conversation with a GP?”

“How does getting your first day in investment banking postponed, which was supposed to be Sept 11, 2001, influence the way you think about serendipity?”

All questions that I would hesitate to say, would be easy opening gambits in a 1:1 coffee chat. But your mileage may vary.

Photo by Tobias Rademacher on Unsplash

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November 10, 2025November 11, 2025

What does GP-Friendly ACTUALLY Mean? | Caroline Toch Docal | Superclusters | S6E7

“It’s a mathematical reality that the highest performing GPs in this part of the market often also have the highest kill rates, which means some things are incredible and other things are super wonky and you have to be cool with that. You can’t be doing a six across the board.” — Caroline Toch Docal

Caroline Toch Docal backs early stage fund managers as the lead of BCV’s Emerging Manager Program. She believes in investing in funds as early as the first close, which is a rare focus in the LP landscape. She’s a lifelong early stage enthusiast from her time at Venture for America to Techstars to Chief to Dorm Room Fund to now Bain Capital Ventures, where she runs the emerging manager program there which has seen quite the evolution since 2017.

You can find Caroline on her socials here:
LinkedIn: https://www.linkedin.com/in/carolinetoch/
X / Twitter: https://x.com/carolinetoch

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

OUTLINE:

[00:00] Intro
[01:33] BCV Emerge
[02:30] The 13-year summer camp experience
[07:46] From VC to LP
[09:50] Compare/contrast early stage investing to emerging GP investing
[12:51] Behind the scenes of Caroline chose to become an LP
[14:36] Caroline’s first investment
[16:24] What is a GP-friendly diligence process?
[21:27] How Caroline pre-qualifies an investment?
[24:50] Understanding if a GP REALLY believes VC is their life’s work
[26:25] Examples of long-term language
[31:05] The 3 Acts of BCV’s Emerging Manager program
[36:44] What the hell is BGH?
[38:03] Stand up comedy
[39:20] Dogs vs cats

SELECT LINKS FROM THIS EPISODE:

SELECT QUOTES FROM THIS EPISODE:

“One of the things that’s not really talked about in this part of the asset class is everything looks pretty good until you see a lot of stuff.” — Caroline Toch Docal

“Sometimes people use the referencing phase to get to know people they’d want to meet. I don’t believe that is necessarily the most GP-friendly thing to do.” — Caroline Toch Docal

An example ‘long-term language’: “They don’t celebrate fundraising; they celebrate outcomes.” — Caroline Toch Docal

“The average anchor check for a $10-25M fund today is $4.2M. In 2017 when we started, it was less than $3M. So that’s a huge change. Related, the LP base is just concentrating. Using that same size as a benchmark, they have 25% fewer LPs than in 2020.” — Caroline Toch Docal

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November 7, 2025November 7, 2025

The Last Job

Ever since I became an LP, albeit small, but a dedicated one, when people ask me what kinds of funds I invest in, I, of course, share the usual:

Funds I and II
Pre-seed and seed managers (ideally first checks)
Both emerging investors (limited track record) and emerging managers (extensive track records, but first-time managers)
Industry-agnostic, but little overlap with my existing portfolio
Geographically-agnostic
Bias towards concentrated portfolios
Bias towards sub $50M funds

These are all boilerplate demographics. And I’m happy to qualify each one, but they’re all traits that, more or less, I seek alongside a lot of other emerging manager-focused institutions share. But one additional thing I share with others is that I look for GPs who believe venture is the last job they’re ever going to have.

The world’s best founders bet their entire lives on the success of an idea. The literal definition of all eggs in one basket. Along that journey they’ll raise capital from a variety of people, some of whom will take board seats and be their trusted partners. The last thing a founder would want is someone who “retires” 3-4 years into the job because they didn’t have the intestinal fortitude to stick with the business. They leave a vacant hole in the board. They leave their founders by the wayside. These founders need someone who has their back no matter what.

And even if not, these GPs are the folks founders can call at 3AM in the morning, and these GPs have jumped out of bed before they’ve even picked up the number. They’re primed even on the weekends. Even on vacation. It’s borderline not healthy, but the GPs love this craft as much as the founders love theirs. To them, this job and the all shit that comes with it is the utopia.

The truth is things can change. Will change. But at the time of our investment, I need to believe that every GP I back has no Plan B, that they’re going to figure it out no matter what. And more importantly, they need to believe that. That they’ve been put on this planet to do so. That they will help their portfolio companies figure it out no matter what. And the more concentrated their portfolio, the more they must help. Incentives align.

It’s hard to describe what that exactly looks like because different people exhibit that differently. It’s also one of those things you can’t just say, but comes out in the small things you do, over time. It’s like glitter. Deep and enduring intentions have a way of sticking with you. They’re hard to shake off. And in their darkest, character-building moments, they shine.

And by function of that, we will too. Giving up should not, cannot exist in their vocabulary. I err towards GPs who run through walls. And if they can’t, they need to believe with every fiber of their body they can and will it into existence. Even if they don’t know the answer, they will figure it out quickly. Naturally, they have an extremely high rate of iteration. Their decks, weekly updates, and even their memos will go through sweeping evolutions over the course of a few short months. And that pace will only get faster.

I like investing in people who want long careers in venture. And that will lead us towards two kinds of people:

The kind of person who wants to get rich on fees
And the person who would do this even if they didn’t get rich because they love this craft.

The first cohort will likely have all right answers. They know the jargon. The modelling. The narratives LPs want to. They know exactly how big their Fund III and IV and V looks. How big, their check size. And everything will be explained as a function of today’s dollars, today’s terms, today’s environment. A few deep references will unveil how they treat others. Why they change jobs. What did they say at the job interview every time.

The latter cohort will have a world view. The way the world will look 30-40 years from now. Not in terms of technology, but people. They don’t try to get on top of things though it’s part of their job. They get to the bottom of things. They’re laser focused during conversation. They’re not looking at the notifications on their phone. They’re looking at the small details of the conversation and their mind turns in ways that you haven’t seen others turn. And they often look at things that don’t change. They can go really deep in areas any rational person will have taken at face value. There’s a natural obsessive quality they have about them.

They notice things others do not. And they have a thoughtful reason to things people take for granted. They show evidence that their shower thoughts revolve around this. They wake up in the middle of the night thinking about this. They consume information from various sources and all roads somehow still lead to Rome. In this case, venture.

Photo by Sven Mieke on Unsplash

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November 3, 2025November 2, 2025

Where Does Intuition Come From? | Yiwen Li | Superclusters | S6E6

“The intuition part comes from activities of creativity that change your perspective.” — Yiwen Li

Yiwen Li is a seasoned investor with a successful track record of investing in AI, blockchain, and healthcare tech while developing global business partnerships to fast-scale the business.

Yiwen is currently Head of Venture Investments at Bayview Development Group, a global family office with diverse exposure public market, private equity, venture, and real estate. Prior, she was a Principal at Alumni Ventures, responsible for end-to-end multi-stage investments focused on blockchain and fintech. She was Director for Corporate Strategy at Masimo (Nasdaq: MASI). She built an innovation pipeline in healthcare connectivity and data analytics. She was Director for Corporate Development at NantHealth (Nasdaq: NH), where she established the international business division. Yiwen started her career at Capital Group in equity research.

Yiwen is an Advisory Board member of C-Sweet. She served on the board of Give2Asia as the chairman of the finance committee and a member of the investment committee. She was an advisory board member for the Asia Society where she co-founded the “Asian Women Empowered” initiative. She was recognized as the” Top 50 Women Leaders in San Jose 2024 and 2025”, “Top 50 Women in 2019” and the “Most Inspirational Women in Web 3”. Yiwen is also the author of one of the best sellers “Make the World Your Playground”, inspiring women to find their unique path. She is a frequent speaker on innovation and emerging technology trends.

Yiwen holds a Master from the London School of Economics and a Master from the University of Vienna. She also graduated from the Venture Capital program at UC Berkeley and the Private Equity Program at Wharton. She was selected to be one of the ” Young American Leaders” at Harvard Business School. Yiwen is a recipient of the European Union’s Erasmus Mundus scholarship. She is fluent in Mandarin and German, worked and lived in Europe, Asia, and US.

You can find Yiwen on her socials here:
LinkedIn: https://www.linkedin.com/in/yiwenli999/

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

OUTLINE:

[00:00] Intro
[02:07] Yiwen’s childhood
[05:00] Jazz singing
[06:14] The value of learning languages
[09:01] How to build intuition around emerging managers
[14:51] Getting to the bottom of a GP’s motivation
[16:33] What percent of GPs are not in VC for the right reasons?
[19:47] Does success fuel or inhibit ambition?
[24:17] The cost of knowledge is cheaper
[24:56] Competitive edges in the current world
[27:06] Why creative activities matter
[31:21] Advice to emerging LPs
[32:42] Post-credit scene

SELECT LINKS FROM THIS EPISODE:

SELECT QUOTES FROM THIS EPISODE:

“The entrepreneur’s [life] is a life where you’re eating glass every day.” — Yiwen Li

“For the first time, the cost of knowledge is becoming cheaper.” — Yiwen Li

“It’s the easiest time to create a company. It’s also the most difficult time to maintain the competitive edge of that company.” — Yiwen Li

“The intuition part comes from activities of creativity that change your perspective.” — Yiwen Li

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October 31, 2025October 30, 2025

Dear LP

Writing this “Dear Emerging Manager” reached more people than I thought, so people asked me to write the same version for LPs.

You’re not special. No matter what GPs say, you’re not. I’m sorry. Refer to Danny Meyer’s line in Setting the Table: “You’re never as good as the best things they’ll say, and never as bad as the negative ones. Just keep centered, know what you stand for, strive for new goals, and always be decent.”

If you don’t believe me, imagine if you were broke, but you got to keep everything else you have. Knowledge. Network. Would the best GPs still give you carry if you had no money?

If a GP would, ask yourself why you’re so lucky.

If you still don’t believe me, watch this video about a Styrofoam coffee cup.

You’re likely not going to win the best co-investment. There’s very little incentive for a GP to. An experienced later-stage investor will do better than you. Will likely be more helpful than you. Even if by brand association alone. Will likely be better connected than you.

Even worse is if you can have the full pro-rata amount. Worse still, you get the “opportunity” to lead. If you do, you’re just telling everyone your child is the smartest kid on the planet. If no one else says that, it’s just you. Don’t believe your own bullshit. See Richard Feynman‘s line: “The first principle is that you must not fool yourself and you are the easiest person to fool.” Do note, it’s different if you get access to a Series D deal through your manager.

As of now, we’re investing in “innovation” when we should be investing in innovation. Let me lay down the incentives. You want liquidity, so you look at deals that generate such. The lowest hanging fruit here is companies who IPO. So you start looking for funds, and sometimes deals, that are in the same sector. And because you are, because you’re looking for that story, large organizations are pitching you that narrative. They restructure and hire teams so that it feeds that narrative. Because the multi-stage funds are doing so, early stage funds and “smart” first checks are pitching strategies and picking companies where they know the multi-stage funds will follow. The co-investor (much less the follow-on investor) slide in the deck gets the most attention these days. The established early stage programs are telling me, in confidence, that they invested in X deal because Big Firm Y will do so. And they’re optimizing for that. The larger platforms are telling me they’re hiring team members around which types of companies are getting late-stage funding and/or going public. Fintech became interesting because of Chime. Prosumer became interesting because of Figma. (Circa 2025). AI is interesting because of large secondary opportunities into OpenAI and Anthropic. Yes, these industries are all transforming the world, but note the incentives. These are the IBMs.

Because of all the above, funds really only have a 10-20% allowance to make venture bets. Any more than that, GPs risk career suicide, at least from the perspective of LPs. These GPs are “unbackable.”

I don’t want you to stake your careers on it. I’m just a stranger on the internet whom you shouldn’t take advice from. But this same stranger is frustrated at the collective risk appetite of an industry that’s supposed to be known for eating risk for breakfast, lunch, and dinner.

Venture has become too big of an asset class if you can describe emerging managers, established firms, growth equity, secondaries all within the same umbrella. The decision-making and the underwriting is different from each. Some see normal distributions. Others do not. Do not conflate a normally-distributed asset with a power-law-driven one.

A slow ‘no’ is worse than a fast ‘no.’ Some will thank you for a fast ‘no.’ Most won’t. But most will talk behind your back if you give them a slow ‘no.’ Time is the only resource we cannot win back. Yours and theirs.

Marks before Year 5 mean very little. You’re welcome to use them as directional headings, but never rely on them. Even if you do, do your own adjusted TVPI and IRR measurements outside of what GPs tell you and keep that methodology consistent across all investors you come across.

Lemons ripen early in venture. Early losses are not always a clear sign of a bad portfolio.

Another LP passing is not always a bad sign. Find out why. Find out how many other similar funds they saw.

It’s okay to pass on a deal if you don’t have the network to diligence the deal. Not having the network means you don’t have people who’ll tell you the cold truth. These are the people who’ll tell you that you have spinach in your teeth.

Don’t ask for data rooms in the first meeting. Or worse, before the first meeting. You’re likely not going to do anything with the data. In the words of my friend, “it’s like asking someone’s net worth on the first date.” Too early. The deck and a conversation is all you need to figure out if the juice is worth the squeeze.

Be transparent with your timing and decision-making process.

If you do not have the time, energy, budget, or network to do the work in true venture, hire someone to do it. Usually that means an oCIO, fund-of-funds, MFO, or a consultant. Make it their job. But make sure it is their ONLY job. The infamous fictional philosopher Ron Swanson once said, “Never half ass two things. Whole ass one thing.”

Your institution will thank you more for whole-assing one job. So, will your GPs.

In the words of Thomas Laffont, “Focus is a luxury.” You sit on more privilege than the vast majority of the world. More privilege than your childhood friends. It’d be a shame to not use the luxury that comes with that privilege.

Don’t torture the data. “If you torture the data long enough, it will confess to anything.” Let the data guide you to questions. Then form your own hypotheses. Understand you cannot grill any hypothesis until it dry ages for at least 7 years. Any sooner and it’s not worth the premium you paid for it.

Trust your intuition enough that you don’t regret in 30 years that you didn’t take the bet of the lifetime, but not enough that you live to regret a lifetime of (undisciplined) bets.

This letter is as much of a reminder for you as it is for me.

Photo by Towfiqu barbhuiya on Unsplash

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October 27, 2025October 26, 2025

$80M vs $800M vs $8B Endowment | Trish Spurlin | Superclusters | S6E5

“Once you hit a billion dollars, you should probably consider some sort of internal team. Just to mitigate risk. There’s audit risk involved when you have such a small number of people managing a huge pool of capital. It’s going to differ for everyone. That’s probably a good benchmark.” — Trish Spurlin

Trish Spurlin is the Investment Director at Babson’s $800M endowment, covering private markets investing with a large focus on venture. In fact 70% of their private equity portfolio is venture capital. Quite a unique strategy for an endowment to take. Why? An endowment is required to provide, in this case, the university money every single year, anywhere from 5% to 60% of a university’s annual budget. And to invest in an illiquid asset class aka venture capital that doesn’t return capital till a decade later, if not longer, takes courage.

You can find Trish on her socials here:
LinkedIn: https://www.linkedin.com/in/trishspurlin/
X / Twitter: https://x.com/trishdigi

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

OUTLINE:

[00:00] Intro
[01:45] Sports in Trish’s life
[05:10] How does success fuel inhibit ambition? How does it inhibit ambition?
[07:35] How do you underwrite long term motivation?
[13:21] How fast you order something might matter
[16:04] Can Trish angel invest outside of Babson?
[17:08] Endowment with a $80M budget
[19:54] Should you hire an outsourced CIO?
[24:18] Endowment with a $8B budget
[27:47] Babson’s liquidity requirements
[30:33] How to ask about a senior partner leaving
[34:05] How does Trish build trust with her GPs?
[37:48] Trish’s interests vs Babson’s interests
[45:24] Hank Sauce
[47:26] Why is Ocean City Boardwalk special?
[48:51] What serves as a reminder to Trish we’re still in the good ol’ days?

SELECT LINKS FROM THIS EPISODE:

SELECT QUOTES FROM THIS EPISODE:

“What have [ambitious people’s] transition periods looked like? A lot of times when people do really cool things, there are 2-3 years after where they just don’t know what to do with themselves. That’s very normal. You see that with Olympians. You see that with astronauts.” — Trish Spurlin

“If you want to be told things when they aren’t going well, you can’t freak out when somebody tells you something that’s not going well. No emails in caps. No yelling. Take a moment to digest what you’re being told. You’re collecting information. You can discuss that information when the time is appropriate.” — Trish Spurlin

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!

October 24, 2025October 24, 2025

Fundraising ≠ Capital Formation

I was chatting with a GP last week about the highlights and lowlights of having a multi-stage fund or just a VC fund as an LP via their fund-of-funds. The obvious synergies of access to downstream capital and branding, especially if the individual running the fund-of-funds is known for their institutional track record as an LP. As well as access to the GPs at those funds for mentorship reasons.

But the downsides also exist. You’re one of many of other GPs who have access to the same team. More often than not, there’s no institutional diligence. And the investment happens largely for strategic purposes. Same is true for multi-stage GPs investing through their own family office. But you also have to think through the tough conversations you need to have when you take checks from more than one of these funds. Assuming all else equal, and they write the same check size, when your portfolio companies are outperforming, do you pass them to Big Fund A or Big Fund B? Equally as true for any LP who wants co-investment opportunities. Family offices. Fund-of-funds. The classic question of: Do you like Mom or Dad more?

And there’s one more. Consider a multi-stage fund who’s an LP in your fund. You share one of your stellar portfolio companies with them, and they loved the deal so much they also invested. Not only invested, but led the following round at a much, much higher valuation. For the sake of this thought experiment, let’s say the Series A valuation is a solid nine figures. As such, they take a board seat. A year later, your portfolio company has the opportunity to exit for $800M. A phenomenal exit for everyone on the cap table, including yourself, your other co-investors, the founders, and the employees. And for you in particular, this would return meaningful multiples of your fund. But not your Series A lead, who is also your LP. The math isn’t inspiring for them. $800M would only be a shy 4-8X on their initial investment.

So, the Series A lead/your LP blocks the acquisition deal and pushes the founders to go for more. You push back on the motion as everyone else’s incentive, including the founders, is the same as yours. Whether the deal happens or not at this point is irrelevant. This Series A lead, who’s also your LP, ends up telling a number of other LPs that you’re difficult to work with. To the effect that they would also no longer re-up in your next vintage. And that makes your fundraise for the next fund even harder than you expected.

You’ve not only lost a $500-2M check (on average), but worse, you’re likely to have a tarnished reputation with prospective LPs. If they like you already, they may look beneath the surface. If they haven’t gotten to know you, they’ll likely surmise on limited information that the juice isn’t worth the squeeze.

Before you dismiss this as just a hypothetical case study, note that this is a true story.

As my buddy Thor once told me, “Capital formation is a design principle. Fundraising is a sales process. Without true design around a customer base and a product, you will fail eventually.”

Capital formation is thinking through the types of conversations you want to have when you’re in Fund n+1 and n+2, 5-6 years from now. As Adam Marchick once said, “The bulk of your conversations with an LP happen negative 6 months to time of investment. The most important conversations you have with an LP are Year 2 through 6 of your investment.” These are the conversations about extending recycling periods, early distributions, fund extensions, and so on. Many of which revolve around the return incentives of your LP base (if decisions are made by majority approval) or by LPAC approval. A family office who has no immediate liquidity needs might not want early distributions and wants you to hold out. Another who’s starting a new business line or pulling completely out of venture (because they were misinformed or set the wrong expectations initially) will want early liquidity and/or someone to buy their stake. An institution with a high leadership turnover rate will likely have a new CIO who’ll want to redo the whole portfolio. So what used to be obvious re-up decisions will need to be re-underwritten altogether.

So I’m not here to say, “Don’t take LP checks from fund-of-funds whose core business is being a VC.” I just want to remind you to consider the incentives of each LP you have on your cap table. Ideally, your LP base’s incentives are homogenous. Not only to themselves, but also to yours. Realistically, for the average emerging manager, it won’t be. But if you know it won’t be, prepare guardrails for future conversations. Don’t walk in blind.

Photo by Dan Meyers on Unsplash

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October 20, 2025October 19, 2025

The Seneca of Investing | Jacob Miller | Superclusters | S6E4

“There’s this thing called alpha, which is returns driven by skill not market return. And when you start to think about what does that mean, skill means you’re doing something that other people aren’t. You have to be different from the average. What can drive that? How are you going to have that be positive expected value? You need to have unique information, unique insight, unique access, or get uniquely lucky.” — Jacob Miller

Jacob Miller is the Co-Founder and Opto’s Chief Solutions Officer, a key figure in its leadership team and central to its growth strategy. He spearheads initiatives for Opto’s fiduciary partnerships and the systemization of institutional-quality private markets investment techniques and programs.

Before co-founding Opto, Miller spent nearly five years as an investor at Bridgewater Associates. Miller has a passion for sensible long-term investing, systematizing investment processes, and distilling complex market dynamics into clear, logical linkages that help people better understand their investments. Having managed money for family and friends since he was 16, Miller is a certified market junkie. While he has a background in macroeconomics and high-yield debt, he finds the challenges and opportunities in the private markets space far more interesting and important, both for investors and society.

You can find Jacob on his socials here:
LinkedIn: https://www.linkedin.com/in/jacob-m-08b32967/

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

OUTLINE:

[00:00] Intro
[01:49] Why did Jacob start investing at 8 years old?
[07:20] The fallacies of storytelling
[08:49] Inputs, framework, and outputs
[09:21] Jake’s mental framework for alpha
[12:31] Pete Soderling’s unique access
[13:49] Jacob on defense tech VCs
[14:57] How does Jacob underwrite relationships in defense?
[16:30] How do you know if someone’s been preaching a story before it became a story?
[20:16] The difference b/w an opinion and an insight
[23:07] Why does Jacob write?
[25:42] Running with Joe Lonsdale at 8:30AM
[29:12] 2 wildly different billionaires
[31:48] What does Jacob want for the world?
[36:23] What keeps Jacob humble?

SELECT LINKS FROM THIS EPISODE:

SELECT QUOTES FROM THIS EPISODE:

“A jack of all trades is a master of none, but oftentimes better than a master of one. — William Shakespeare

“If you didn’t have stories or branding, it would take you four hours to choose which cereal to get based on solely merit — if you did cost comparison versus ingredients, nutrition, et cetera. You need the story to make a decision in two seconds rather than six hours.” — Jacob Miller

“You need to know what are the assumptions that underpin those stories so you can know if and when they’ve been invalidated.” — Jacob Miller

“You have inputs; you have a framework; you have outputs. The story is the output. You can be wrong on your inputs. You can be wrong on your framework. Better to be wrong on your inputs than your framework. Because if you were wrong on your framework—and it’s garbage— it’s garbage in, and garbage out.” — Jacob Miller

“As investors, we probably don’t want to bet on getting uniquely lucky. And access and information counts as insider trading in public markets. And so if you’re going to a public market asset manager who claims to have alpha, you need to be defending why you have unique insight. Why can you take information that everyone else has and derive conclusions that other people won’t, which is a very high bar. […]

“But in private markets, we can look to what are unique sources of access and information. Are you in founder networks that other people are not in? How can you show me you see deals before other people do? Do you have benefits as an LP or GP that you can bring to founders that might lead to preferential pricing that would lead to them choosing you first? Do you have a reputation that will attract the right kind of talent? And then on top of that, do you have really insightful frameworks about what makes a great founder, about how to assess TAM, about how to help a company scale through product-market fit to expansion and et cetera? I always start a private market analysis with: ‘Let’s talk about access and information. What do you see that others don’t? What do you know that others don’t?” — Jacob Miller

“Too much source-citing is honestly a red flag for me. This should be stuff you’re learning in the market that’s evidence of your unique access to information.” — Jacob Miller

“The illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn, and relearn.” — Alvin Toffler

“That which Fortune has not given, she cannot take away.” — Seneca

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!

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