Adam Marchick from Akkadian Ventures 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.
Cocoa VC’s Carmen Alfonso Rico asks what belief Adam held firmly for years but changed his mind recently on.
Good Trouble Ventures’ AJ Thomas asks about how GPs can better communicate risk to first-time LPs.
1517 Fund’s Danielle Strachman asks about the world view Adam has that shapes his investing thesis.
Over the past twenty years, Adam Marchick has had unique experiences as a founder, general partner (GP), and limited partner (LP). Most recently, Adam managed the venture capital portfolio at Emory’s endowment, a $2 billion portfolio within the $10 billion endowment. Prior to Emory, Adam spent ten years building two companies, the most recent being Alpine.AI, which was acquired by Headspace. Simultaneously, Adam was a Sequoia Scout and built an angel portfolio of over 25 companies. Adam was a direct investor at Menlo Ventures and Bain Capital Ventures, sourcing and supporting companies including Carbonite (IPO), Rent The Runway (IPO), Rapid7 (IPO), Archer (M&A), and AeroScout (M&A). He started his career in engineering and product roles at Facebook, Oracle, and startups.
You can find Adam on his socials here:
X / Twitter: https://x.com/AMarchick
LinkedIn: https://www.linkedin.com/in/adammarchick/
And huge thanks to Carmen, AJ, and Danielle for joining us on the show!
Listen to the episode on Apple Podcasts and Spotify. You can also watch the episode on YouTube here.
OUTLINE:
[00:00] Intro
[01:22] The anatomy of a good story
[02:26] The job of an annual summit
[05:35] How often does VC change?
[07:25] Narratives LPs are looking for at GPs’ AGMs
[08:25] “20% overall revenue growth in the portfolio is NOT exciting”
[09:01] What founders talk about at an AGM
[14:01] How does Adam spend time at an AGM
[17:48] Enter Carmen and Cocoa VC
[19:35] What did Adam change his mind about
[21:09] How does an LP assess GP NPS?
[22:16] Picking on-sheet references
[24:33] The origin of Cocoa VC
[26:08] What is Carmen’s superpower?
[27:09] What does Carmen want from her LPs?
[29:09] The best answers to “what do you want from your LPs?”
[31:29] Controversial decisions for the LPAC
[33:39] Enter AJ and Good Trouble Ventures
[34:25] Communicating risk to your LPs
[35:58] What about to first-time LPs?
[38:06] Where do first-time LPs come from?
[39:50] What inspired AJ’s question?
[42:14] Is the convo different if LPs reach out vs you reach out?
[43:45] The timing of LP conversations: most frequent vs most important
[45:59] The trust equation
[47:45] How to scale trust with LPs
[51:35] How has GPs built trust with Adam?
[53:29] How often does Adam keep in touch with his GPs?
[56:06] Enter Danielle and 1517 Fund
[58:38] What is Adam’s mental model?
[1:01:43] How does Adam define low entry prices?
[1:03:25] Tracking trends as an LP
[1:06:55] 80-20 portfolio construction
[1:10:37] Would 1517’s thesis 15 years ago count as market risk?
[1:14:12] Adam’s last piece of advice
[1:15:46] Akkadian Ventures and RAISE Global
[1:17:06] David’s favorite moment from Adam’s earlier episode
SELECT LINKS FROM THIS EPISODE:
- Akkadian Ventures
- RAISE Global
- “Talent Networks are your Greatest Assets” with Adam Marchick
- Mark Suster
- Upfront Ventures
- “There are no Shortcuts: Why Showing Up in Person is Everything” by Mark Suster
- SpaceX
- Anduril
- OpenAI
- Anthropic
- Doug Dyer
- Chapter One
- Jeff Morris Jr.
- Carmen Alfonso Rico
- Cocoa VC
- Dandelion Chocolate
- Compton’s Coffee House
- AJ Thomas
- Good Trouble Ventures
- Danielle Strachman
- 1517 Fund
- Thiel Fellowship
- Vitalik Buterin
- Ethereum
- Dylan Field
- Figma
- Martin Luther
- University of Southern California (USC)
- Emory University
- Emory Investment Management
- Srinivas Pulavarti
- Bryne Hobart
SELECT QUOTES FROM THIS EPISODE:
“Venture is made on the exception, so if each company is growing at 20%, it’s not an exciting portfolio. If 3 companies are growing at 300%, that’s an exciting portfolio.” — Adam Marchick
“I always go back to tenets of venture. It’s backing great people, tackling large markets at low entry prices.” — Adam Marchick
“Similar to a founder, their job is to communicate upside potential. At worst, you can lose 1X. At most, the returns can be inspiring. I think your job is to talk about what can go right and what are the inputs required to make it go right.” — Adam Marchick
“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.” — Adam Marchick
“Trust equals credibility, reliability, and intimacy and the dividing factor of building that trust is whether or not you feel that self-orientation is only geared for the other person’s agenda or actually something that you’re co-creating together.” — AJ Thomas
“When something is getting really heated, it’s a great time to learn because so many people are working on something.” — Bryne Hobart
“When there is hype, you have to look at metrics that can’t be hyped.” — Adam Marchick
On portfolio construction… “80% should be on-thesis, and 20% should be ‘you couldn’t sleep at night if you didn’t do it.” — Adam Marchick
