Being an LP - Cup of Zhou

October 23, 2026October 23, 2026

Spikes, bumps, dents, cavities

A couple LPs and I were discussing the GPs we met this week. All who spend most of their time looking at emerging venture managers. Well it’s RAISE week, so everything’s hot in SF. Except the weather. Heat wave was last week. And as we were trading notes, and do note, this is highly anecdotal… 50% of GPs mentioned were very quick passes. In fact at some of the network-y events, LPs were trying to help each other get out of conversations with certain GPs. But that’s to no surprise, the same is true for many VC-founder events. About 40% of GPs mentioned felt good enough for us to continue the conversation, but not enough for any of us (assuming we didn’t know them already) to take next steps with them. And 10%, maybe less, were worth further conversations. Some of my friends reading this may claim less in the last cohort.

Do note, almost every LP who came into town this week, asked the local LPs or just each other, who are the 1-2 GPs they have to meet. So every LP, minus opportunistic chats, knew exactly who they wanted to meet before the week started.

All that to say, there were enough strong candidates for LP capital around this week. There are more well-rounded GPs in markets than ever before. Folks with classic venture training, enduring relationships, and/or founding experiences. Rewind 15 years prior, most of these folks would have been great GPs and potentially household names too. They’re highly responsive. They’ve got a good track record. Founders like them, and for the most part, they do try to be helpful as early as possible and as much as possible. They don’t pretend to be someone they’re not (there are plenty still who do). They’re well-connected to downstream capital, customers and/or talent. And in their niche, they have a lot of trust. And some of them have even been historically great fiduciaries of capital (i.e. comms, exiting positions, etc.).

But in Q4 2026 (yes it’s Q4 already), they’re just good (not great) in a lot of LP’s eyes.

Another thing I’ve noticed is that when LPs introduce GPs they’ve invested in to me that they like, there’s always a story. A very specific incident where everything clicked. One thing a GP is known for that makes them unforgettable that no one else has. Something small that sparked that upon continued exposure compounds again and again and still something most GPs don’t have.

And I can’t help but think about spikiness.

Spikiness is memorability.

In one instance, a friend and I were discussing a GP that I passed on before, but he thought was interesting. The conclusion was that this GP will most likely be a top quartile GP, but she didn’t have an obvious edge. My friend said that he thought she was interesting because she had a “subtle edge.”

A bump, if I might translate for a second.

Are bumps enough? Is that enough to attract the best founders? Do bumps matter more than spikes after a certain AUM? Are spikes no longer as valuable past a certain AUM?

To define some terms really quickly:

Spikes are edges. Absolute advantages. What you’re known for that very few other people are known for. What you can do that no one else can do. And that you’re in the top 0.0001%.
Bumps are comparative advantages. May not be unfair, but you are better than at least half of your competition. Potentially top quartile.
Dents are comparative disadvantages.
Cavities are absolute disadvantages.

While many LPs will have different answers to the above, with respect to emerging managers, a common thread seems to be that:

LPs like spiky GPs with no dents and no cavities. These GPs admittedly don’t exist. Or at least I haven’t come across.
So instead, LPs like spiky GPs with dents, but no cavities.
But they will take spiky GPs with cavities as long as the cavities don’t handicap their ability to create outsized returns.
LPs hesitate on investing in bumpy GPs with no spikes. Even if they have dents and no cavities.
LPs run away from GPs with cavities but no spikes or bumps.

And of course, the observations above come in lieu of track record and referenceable relationships that are easier for many allocators to underwrite.

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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.

October 9, 2026October 9, 2026

LPs Judging Each Other

I had a conversation with both a family office and a fund-of-funds this week about the same topic. All of us at a high level agree on the premise of it (with nuances at the edges). And within 24 hours of each other, so I now feel compelled to write about it.

There are four sets of GPs we come across as LPs.

GPs we love and end up backing
GPs we think are really interesting, but for whatever reason, choose to wait and track
GPs we pass on really quickly
And, GPs we, unfortunately, because the stars don’t align (or whatever the horoscope folks say, when Jupiter meets Neptune or Mars is in retrograde… clearly not a astrologist), fail to give any respectable attention to, and never even began to dig in at all.

The last one is unfortunate. Truly. But it happens. A stray LinkedIn message. An email that slips through the inbox. A chance meeting at an event with no follow up.

Now this post is about judging.

Not all LPs see eye-to-eye on investments. Sometimes I’ll find a GP particularly fascinating, and my peer won’t see the same brilliance. And vice versa. But most of us do agree, to some extent, that the sum of our first set of GPs (ones we invest in) and our second set of GPs (ones we’re tracking but didn’t invest in) is roughly the same as each other’s. In other words, if another LP I respect has invested in a fund that I didn’t, I am most likely tracking that fund. And even though another LP friend may not invest in the same funds that I do, they are most likely tracking the GPs I’ve invested in. What’s good enough to invest for one LP is good enough to invest to track for another.

What raises the eyebrow is usually coming across an LP who has a consistent track record of investing in funds that you yourself pass on rather quickly. The third set of GPs. One, maybe two, fine. It happens. You may have missed something when skimming quickly. But if there are three or more GPs in one’s own third set but in another LP’s first set, one starts questioning their judgment. And it seems that the family office LP and the fund-of-funds manager also agree.

One caveat to note… this only really applies to LPs who primarily focus on venture. The unfortunate circumstance of LPs who don’t focus only on venture is that given limited bandwidth, they’re likely to have a lot more GPs in a given asset class in the third camp than LPs who only focus on one asset class.

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September 18, 2026September 18, 2026

DPI is a Harsh Judge

Yesterday, I was watching a reshowing of Gwynne Shotwell and Elon Musk at the 2026 All-In Summit. Perks of the attention economy are that almost all content these days no longer have exclusivity. And if so, there’s only a small window of that arbitrage. Nevertheless, I digress.

In it, Elon says, “Physics is a harsh judge.” And well it got me thinking. We live in a world where DPI (distributions to paid-in capital) is a harsh judge.

And I say DPI in a royal sense. It really is realized IRR. ‘Cause 3X DPI in 15 years is quite bad. Your Benjamins are better in the money market growing 8% a year. Not that much better but better. 3.17X to 3X. But benefit of the money market is your capital is liquid. But I will use DPI for the purpose of this piece because it rolls off the tongue better. Or rolls off the fingers…? You get my point.

But unlike the world where physics is a harsh judge, DPI is not instantaneous.

I was also catching up with a friend yesterday and he said something with respect to recursive self-improvement (RSI). For the layman, aka me as well, the process in which the AI learns by itself from itself. In other words, an AI capable of rewriting their own code. It’s a great theory and we see quite a few companies working on turning this into a reality. But the most interesting takeaway I got from that conversation was that “recursive self-improvement only works if it doesn’t take up time. If it takes time, you can’t do that many turns. Then the harness becomes the only thing you iterate on, but that undermines any moats.” In fact, building a Claude skill is the equivalent of retraining the harness after each task. Requires little time spent, but anyone can do so.

Similarly, because DPI is realized after an incredibly long feedback cycle, 5-8 years at best, you don’t have much time to retrain the model more than a small handful of times before, well, your life expectancy. So, in lieu of DPI, LPs look for other signals that act as a proxy to the harsh judge.

Mark-ups become the mild judge.

Revenue growth and talent density become the gentle judge.

And brand is the lenient judge.

And when things are too lenient, you no longer have one judge, but an army of judges. Anyone can judge you. Everyone is your jury. And all you need is one viral tweet to be your executioner.

So, when LPs say they underwrite you on discipline, at least this is what I look for, and my generous interpretation of what other LPs look for, they’re underwriting you to what can you do today that exists on a faster feedback cycle and what is easy to make evident your ability to compound your existing assets. In other words, between Fund I and II, what is the metric you would like to give LPs for them to assess your rate of change?

Now it’s up to LPs to decide if that metric holds gravity or not. But you at least have to provide one. In its absence, we are back at square one. DPI is a harsh judge.

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September 10, 2026September 9, 2026

When she complains about the dishes…

This is a repost of a piece I wrote earlier this week on my investing topic only blog that seemed to get good feedback, so sharing here as well, in hopes that it is helpful to you as well.

The post is for GPs who’ve gotten rejections from LPs, but I think the analogy stands if you’re a founder hearing back from a VC, or anyone who is doing any kind of fundraising or sales.

One of the most memorable pieces of relationship advice I’ve gotten is that line. “When she complains about the dishes, it’s not about the dishes.”

By the time your spouse complains about the dishes, it’s a culmination of other pent-up emotions simmering at the surface. And when she says it’s the dishes, it’s not. Potentially it never was. But it may have been the reason that tipped her over the edge.

That said, this is not a post about relationships. I’m not a marriage counselor or a relationship coach. This is a post about rejections. And all the reasons that come with rejections. Or more specifically, about LPs passing on GPs. Or hell, VCs passing on founders.

And yes, I’m going to use gendered language but it’s purely for the purpose of extending this analogy and lesson my friend gave me. So I hope you allow me this literary liberty.

When she complains about you being too early, it’s that she never had conviction over the deal. When she says you need more traction (track record), it’s because she couldn’t see why you would see and win the most interesting deals in your space. What you say has yet to be proven by what you did. So, the underwriting will start now for what you will do. She doesn’t trust you can execute against what you promised. You’re either talking a big game (using superlatives that feel disingenuous) and/or you create a feeling of naivete. Be assured that the best allocators will be keeping track of what you promised before. Even if you, as a GP, rewrite your Docsend pitch deck. Admittedly, still, most won’t.

You will wonder why she backs others with no track record and no prior relationship with her. And 9 out of 10 times, it’s a communication issue in the first (few) meetings. You gave her no reason to generate enough dopamine that would get her to act outside of the meeting.

When she complains about there being higher priority opportunities, your strategy doesn’t align with the organization’s strategy. She likely did some work, and her initial work and/or references discounted the initial enthusiasm she had. She didn’t know how to say no politely and without seeming like an asshole. So only after a few meetings, and only after she’s felt like she’s given you the time and respect she thinks you deserve (whether you accept it or not), she can finally pass. Your problem is you never figured out what her motivations are. What she wants in her career. What her “family” (organization) wants of her. What keeps her up at night. Why she wants to go to work every Monday.

When she complains that there isn’t enough capital to left to deploy, it’s the fact you aren’t good enough to be an exception that would help her raise her next vehicle or to get board approval. Excluding institutions (including family offices) who own their own pool of evergreen capital, anyone who has to ask other stakeholders for more capital to invest has at least 20-30% left to deploy when they go out to raise their next vehicle. The primary motivator for the remainder of capital are people or opportunities that best highlight an allocator’s promise to their stakeholders. Fund-of-funds promise access. That means either a multi-million dollar allocation in Anthropic or an individual (usually spinout, but sometimes highly reputable founder/operator) who’s been early in generational opportunities. Others, like multi-family offices, depending on their mandate, either promise access or their ability to pick great pickers, which means 5X+ DPI in 5 years in a prior fund is extraordinarily exciting. Realized IRR or DPI matter a lot.

When she gives you a whole list of reasons as to why they’re passing, it’s because of the first reason, but she needed a laundry list of reasons to justify the one small thing she felt like she would get judged for. But that small thing came up as a recurring theme again and again, among references, among pushback from her investment committee, among her own doubts she never unearthed with you. One reason is all you need to pass. One reason is all you need. And sometimes, it’s the dirty laundry (i.e. gossiping). Or the speed of your communication. Sometimes, it’s the fact that you boast about another LP competitor in front of them. Sometimes, it’s the fact that you forgot what you talked about in the last meeting. The reasons will always feel like bullshit to you. But trust me, they’re as real, and as meaningful as they get.

When she doesn’t complain at all and just disappears from your life, she didn’t feel safe with you to give you the feedback you ought to hear. She feared your reaction, or at least the expectation of your reaction. You never provided the safe space she needed. It’s likely because of how you talked about others. The more judgmental you are about others, the more she’ll think… if things go awry, will you say the same about me behind my back? Can you even handle any amount of criticism?

There’s another great line on communication, but also on relationships by writer and poet Khalil Gibran. “Between what is said and not meant, and what is meant and not said, most of love is lost.”

If there’s one takeaway you need from this post, whether you’re a LP, there is more love (and reputation) lost in the lack of communication than in overcommunicating.

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September 4, 2026September 3, 2026

The Danger of the Value-Add Investor

I’ve been a believer for a long time that our jobs as LPs (especially if we’re on the LPAC) is to be the parent at the playground. I don’t care which slides, swings, trampolines, or rock climbing walls you scale up. You are welcome to play however you want within the sandbox (your thesis). But when we see you flipping upside down on a swing or doing dangerous maneuvers that can lead to bodily harm, that’s when we step in as the parent.

We see those “dangerous maneuvers” in fund updates, at AGMs, in LP reach outs, in LPA terms, or hell, in regular conversations. I don’t give unsolicited feedback. Just my personal rule. The only exception I make to that rule is if I see something you’re doing as a GP that could have downstream negative impact to you or the fund.

Our job is not to look you straight in the eye with everything you do. Our job is not to be the helicopter parent and scold you at every turn. But I will always keep you in my field of vision, out of the corner of my eye, to make sure you’re staying safe.

To take a step back, there’s an interesting parenting rule I came across a while back. “Prepare the child for the road, not the road for the child.”

Here’s what I’m seeing:

Fund-of-funds replacing emerging managers’ marketing and community roles (aka FoFs are doing those roles for GPs)
GPs who believe in king-making. Folks who are doing everything from customer intros to closing customers for founders to hiring and managing all executive positions to finding the co-founder for the founders. So to speak. preparing the road for the child.
GPs who double as therapists
LPs who “anchor” your fund, but they take your entire fund

How much help is too much help? How much help handicaps the founders or GPs from what they do next? How does the value-add around certain metrics (i.e. ARR, concentration of customers, time spent fundraising, etc.) by investors mask the a founder’s own ability to achieve success? Have you prepared the road for the child?

My classic venture training told me that startups need to pull off 10-15 miracles before their company succeeds. Will those “miracles” carry the same lessons, scar tissue, and weight in a founder’s mind if the investor does 50%+ of that job for them?

A chick has to eventually leave the nest.

“Good” news is that most VCs are not helpful. And while many say they are or want to be, their calendar, their actions speak differently. Bad(?) news is that this wave of emerging managers feel they need to be valuable in order to stand out. I fear for the over-optimization of the perception to be helpful, rather than actually being helpful.

But to borrow two quotes from two friends:

“VCs are terrible.” From a friend who’s been in this world for decades having grown one of the most recognizable names in venture. The average VC isn’t helpful. Which is fine. As long as that’s communicated to the founders at the forefront of the investment. Quite a few VCs claim to be helpful. About the same number try to be, most fall short. In fact, more and more emerging GPs are doing so. And many end up optimizing for their own incentives, and not the founders’. Many want board seats, but do not understand the fiduciary gravity of being one. Many make 1-2 intros and act like the founders owe them, whether or not the intros landed any meaningful progress for the founders. And we’re sitting just before the wave of value-add LPs.
“Just because I have court side seats to the Warriors games does not mean I can replace Steph.” From an emerging GP and basketball fan whose first fund sits at 8X DPI. Despite his success as an investor and as a founder, it’s easy to conflate seeing the action from afar as prescriptive on how to play the game. Most VCs and LPs have had some version of court side seats. Some even further in the stadium. Yet many investors try to offer value and/or advice as if they have a crystal ball.

In doing off-list references on a fund recently, I was chatting with a founder that the VC backed and she said she would never take his money again in her next company. When I asked why, she said, “I have a job to do, but he keeps texting me ideas he has for the business and making single opt-in intros. I’m too busy to respond.”

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August 21, 2026August 20, 2026

On spinouts

When British voters voted for Brexit in 2016, comedian James Acaster gave a hilarious and apt analogy.

When you make tea, “if you leave the [tea] bag in, and over time, the cup of tea itself as a whole gets stronger. And it might appear like the bag is getting weaker but it’s now part of a stronger cup of tea. Whereas if you take the bag out, the tea is now quite weak, and the bag itself goes directly in the bin.”

I think that’s the case with a lot of spinouts. Not all. But a lot.

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July 20, 2026July 19, 2026

Why invest in a FoF

We’ve had a number of family offices (FOs) ask Sam and I for advice recently on investing in venture. And Sam shared a post recently on exactly that, which I highly recommend reading if you’re considering investing in a fund-of-funds. This post is more of an elaboration, a continuation on his.

Some of which have had experience investing in startups. Others in venture funds. And many still, absolutely no venture exposure in their portfolio. And a fraction of them want to.

Some have reached the conclusion that it makes sense to invest in funds-of-funds (FoF), which we’re a big proponent of. That said, not all fund-of-funds are created equal.

Yes, different FoFs will pitch different value-adds to GPs. And yes, different FoFs will pitch different strategies — anchor versus co-invest versus secondaries versus asset class diversification versus lower fees. And yes, different FoFs will tell you they have access to different pools of GP talent.

But your motivations for investing in venture as an asset class are often different as a family office.

Some FOs want to invest in venture passively and use FoF exposure to give them comprehensive exposure to VC. Kind of the set-it-and-forget-it mentality. As long as the asset appreciates 10-15% per year. Here, families look for institutional processes. Do the FoF GPs know how to run a fundraising process? Is reporting and communication clear and timely? Do all interactions have a feel of polish? How many managers do these GPs see per year? Are they in embedded networks?

Some FOs want to eventually directly invest in startups, but want to use FoFs to have co-invest exposure, as well as learn how to underwrite deals. In fact, I talked to two family offices last week. One of which invested in a FoF who invested in Sequoia because they wanted access to Anthropic. Another because they wanted to invest via an SPV into a hot AI infrastructure deal. Here, they’re looking for thoughtful and elaborate memos. AI-written memos only go so far. They want to ask questions. Here, FOs are unlikely to move fast. In fact, they’re looking to spend time to get conviction on a deal. Webinars, meets and greets with founders, regular internal content pieces about why a space/vertical or a company in the underlying portfolio is exciting is paramount before an SPV gets put in front of them. Assuming they’re not looking for the same ol’ pre-IPO, blue chip names, they not only need to trust the FoF’s taste, but also the underlying GP’s taste and why the space is exciting. Returns from the FoF matter less than their individual returns from investing in the SPVs or direct vehicles.

Other FOs want to invest in venture funds due to a portfolio approach rather than being a stock picker, but hesitate at the risk-reward profile of unproven managers, so will only invest in Fund III+ (maybe Fund IV and onwards), and need FoFs to do the diligence/relationship-building for them. Yes, this is also true for a lot of institutional capital in general. It’s for that reason, that they typically say, “It takes us 3-7 years to get to know a manager.” The number of years itself is arbitrary. Depending on where on the totem pole an individual sits (for institutions), they’re motivations for punting the conversation till later varies from “Is this deal going to get me promoted/fired?” to “I just don’t have the time in the immediate future to spend disproportionate time on one deal that’s asking for the smallest ever check size I can write in the smallest asset class I allocate to.”

Similar to the above archetype who likes co-invests, but with an added layer of dinners, happy hours, and invitations to events where they get to meet different portfolio GPs helps them build conviction. The frequency of these don’t have to be as often as with founders, just because knowledge and insight atrophy faster than relationships with people. Individual returns from best-performing GPs matter more than the overall FoF returns. Batting average matters less than magnitude of the home runs.

Others still want to build their own fund-of-funds program, but don’t know how to and want to see how the best operate before pursuing it themselves. They would like regular calls with the FoF GPs, frequent texts back and forth and the liberty to ask rookie questions. For many FOs, we usually tell them it’s hard to expect these unless you’re an early commit to a brand new FoF, or you are at least a 5% check of the overall FoF size. Our general recommendation is that as a family office, you also commit to investing in the next vintage as well, so the GPs of the fund-of-funds have a reason to continue to the conversation with you. Simply, because, well… oftentimes, GPs whether a FoF or venture fund could be short-sighted in their ways of thinking. That also means if you have $5M to invest in a fund-of-funds, it generally makes sense to split that check up to invest $1-2M in the first vintage of a $30-50M FoF and double down in the second vintage if you are able to get what you want out of the relationship.

Returns also don’t matter as much, but these FOs will want to have at least seen what quality GPs look like. Ideally through the portfolio of the FoF, but if not that, at least through events and interactions made by the FoF.

There are those who want to put capital towards impact initiatives and fund-of-funds with an ESG/DEI mandate is one way they can bring impact with capital. FOs with these intentions are quite explicit, but to add on to what already is, regular reports and communication to know their dollars are being put to good use is really what they’re looking for. Returns matter a little less.

And yes, finally, there are those who care about fees. For most families that we work with, the fees don’t seem to be the primary concern. But having chatted with a number of families out there, it is a concern that exists for some, not all. That said, it is a low-hanging excuse to pass on a fund-of-funds. 🙂

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July 16, 2026July 15, 2026

Ranking the Stakeholders

Danny Meyer wrote in his book, Setting the Table, that as Union Square Hospitality Group, which has always stayed rent-free in my my mind, they prioritize the following in the order of:

The team
The customers
The community
The suppliers
The investors

And I’ve always thought that was an interesting stack ranking of the stakeholders in the business. Which oddly enough, until recently, I hadn’t thought about it for the fund business. A friend asked me a simple question the other day: “If a GP wants my time versus an LP wants my time, and I only have time for one phone call in the moment, who would I prioritize?”

Now before I answer that question, a few things:

The suppliers and the investors in a venture fund are effectively the same thing. Your LPs.
You can probably argue that service providers sit somewhere in this totem pole, but if we’re getting into the details of who a GP is collaborating or spending time with, we can also include parents, spouse/family, friends, and so on.
So, for the sake of this thought experiment, there are four primary stakeholders: team, customers, community, and investors.

Because I’m spending a lot of time with fund-of-funds these days, let’s also take this from the perspective of a FoF GP. (Although you can draw many analogies between a venture GP and a FoF GP). You have the team, your GPs, the community, and, your LPs.

Under the assumption that the FoF is designed as a financial vehicle than a strategic vehicle, I believe the ranking is:

team > GPs > LPs > community

GPs are a higher priority than LPs since without the GPs the LPs don’t make their money back. The GPs must outperform to deliver value to the LPs. How much help the best GPs need is debatable. But if your GPs ask for a service at the same time an LP does, then my belief the priority goes to the GPs.

Now, the more debatable point is that I believe the team should be prioritized over the GPs. Now this is also assuming that you have a team, and you’re not a solo enterprise (or a small, small partnership) yourself. Ideally, the team’s lifetime value (LTV) outlasts a GP’s LTV. I’d much rather be in business with the right team much longer than I imagine a FoF will be involved with a GP who usually graduates from the portfolio once they become obvious. Yes, there are edge cases, but I’m not here to debate the edge cases. The team’s value spans across fund vehicles. The GPs’ are only within the vehicle we invest in. As such, empowering your team members should be paramount. Set them up for success. Set them up to run their own initiatives and eventually lead the firm. But hire slowly, and fire quickly.

And lastly, your LPs are more important than the community. I am a believer in a rising tide raises all ships (after all, it’s why I’m writing blogposts like this), but I know not everyone believes in that. In fact, I’ve actually gotten in fervent debates with very successful investors who believe insight and information is proprietary. If you can’t serve your LPs well, no matter how great of a brand you have, no matter how much content you produce for the ecosystem, no matter how many speaking engagements, dinners, happy hours, and so on you host, you have a leaky bucket. Arguably a sinking enterprise. Your job as a business owner to create enduring and growing value for your shareholders. Your job as a charity or a foundation is to support the community first and foremost. That said, it doesn’t mean you throw the community out of the window.

In fact, the primary takeaway from all of this is that you always need to start from the lowest rung of the ladder. And that’s the community. To borrow Brian Chesky’s 11-Star Experience framework, at the base of this hierarchy, you need to already deliver a 6-out-of-5-star experience. You need to already go above and beyond for them. If everyone else is hosting happy hours already, you’re doing dinners where every diner gets a handwritten card from you about why they should be at the table. If everyone else has a Whatsapp community where they’re just adding people to a like-minded group, your community should have chapter leads that champion different topics and niche communities and be incentivized to host.

Only after that, do you deliver a 7-out-of-5-star experience for your LPs. 8-out-of-5-star experience for your investments (GPs or founders). and 9-out-of-5-stars for your team.

This is slightly different, though still similarly true, for fund-of-funds than with venture funds, but people often forget that venture is a financial services business. They get the finance part, but they forget the services part. Venture capital as a whole is an asset class, although arguable more than just one asset class. But emerging managers, via a fund-of-funds, is an access class. Implied in access, is providing access to people. Your LPs. Your GPs. Innovation. Insight.

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July 10, 2026July 10, 2026

The Religion of Venture Capital

At the risk of being an iconoclast and at the risk of offending people with the below, these are the tenets of venture capital today. You have been warned.

My investments will work out. They have to. Please.

Everyone else is dumber than I am.

My peers have died at the cross for me already. Their portfolios have died at the cross for me. The mega funds have died at the cross for me. I am absolved of my sins fueled by belief, hope, and my need to diligence the worthy.

VC is a power law business. I have yet to see the returns, not because they don’t exist, but because we are still in J-curve, at the very beginning of the hockey stick growth. I need only to believe in this truth as much as to leverage other people’s money to back true risk-on businesses.

The mega funds investing is all the signal I need from the powers above to tell me I’m on the right track. Yet, what I am doing is venture, not what they are doing.

Venture as an asset class is now too big to fail.

The gap between TVPI and DPI does not exist. It cannot. At the end of the day, moolah will be in the coolah. All paper marks will realize, collapsing the illusion of paper wealth into hard, undeniable absolute returns. Today, we are still pre-DPI. But believe that it will come. It’s a matter of when, not if.

Secondaries is the only answer I need. I guarantee someone else will want and buy what I have. For the price I have it at.

I was destined to do this the moment I wrote my first check. Whether it be in a friend or stranger, success or not, I knew I was meant for this. There is no other thing I’d rather do. Or not do.

Everyone who does not believe in me is foolish. Why can’t they see what I see? Are they blinded by only what’s in front of them? Are they blinded by the today that they can’t see my tomorrow?

Forgive me not, Father, for I have never sinned.

AI will replace every job. But never my job. Never me. I am above the collective consciousness.

Bible study sessions exist on Twitter/X. And I’m a regular attendee.

I repeat these prayers to myself thrice before sunrise. And thrice before the moon who shall be my witness.

There’s a Warren Buffett saying that relates to the world we live in now. “When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact.” We are in a world where the reputation of venture capital has not changed for the past 15 years. Brilliant people have died, are dying, and will continue to die at the cross.

An LP once told me something I’m inclined to agree with. “A lot of LPs should be VCs. A lot of VCs should be founders. A lot of founders should be employees.” The world doesn’t need more VCs. The world needs more builders.

All that to say, I’m still bullish and actively investing in venture, but it’s undeniable that there is a lot of fluff going on here.

Appreciate those for reading the above drafts and helping me make it more trigger-worthy. 🙂

Photo by Aaron Burden on Unsplash

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July 3, 2026July 2, 2026

GP EQ

A conversation with an LP reminded me of this recently. Can we trust a GP’s word that they’re a good picker if they can’t assess how likely an LP is to commit?

I’ve had multiple conversations with GPs where they tell me XXX and YYY are excited to come in the fund, and they just need more time to close their fundraise or for their process. Then the same XXX and YYY LPs ghost these GPs for months on end. For me, that’s enough for me to question their level of commitment, but not having been in those conversations firsthand, I can’t speak to the actual incentives. Sometimes, I actually know XXX and YYY LPs well enough to pick up the phone and dial them right away and ask them what’s up. Which I do. Only to hear from them and they say they had passed already.

Now I don’t know what actually goes on between those two parties. What’s said and what’s not said. There are many LPs out there who give very soft “no’s.” In hopes to not offend, they imply it’s a “no.” There are also LPs who explicitly say it’s a “yes” ONLY IF ZZZ happens. Given the current market, most of the time, ZZZ doesn’t happen, which becomes an easy out for the LP. The LP’s felt like they’ve delivered the “no.” The GP is still hanging onto the hope the LP likes them enough to break the rule. And then, there are many GPs who have selective hearing loss.

Nevertheless, there are multiple instances of this. And it’s not my job to point fingers to any party other than elucidate that this exists in our world.

That said, even if an LP doesn’t explicitly say “no”, there should be enough breadcrumbs to point to whether someone is a pass. Probably harder to know if they’re a “yes.” But there’s definitely writing on the walls if it’s a pass. And it’s almost always better to assume an LP is an out than an in if there’s hesitation.

The outstanding question for someone like me or any of my friends who I’ve had this conversation with is… is this indicative of a GP’s EQ when talking to founders? Is this GP more prone to rewriting history and facts? Is there a massive perception bias here and is the GP living through rose-tinted lens?

Richard Feynman has this great line. “The first principle is that you must not fool yourself — and you are the easiest person to fool.”

And I’ve also had this conversation with another GPs a few weeks back, and I said, “You’re either lying to me or you’re lying to yourself. One is worse than the other. But neither gives me a reason to back you.”

Photo by Priscilla Du Preez 🇨🇦 on Unsplash

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