How to Build a Multi-Fund VC Firm | Ben Choi | Superclusters | S1E6

Ben Choi manages over $3B investments with many of the worldโ€™s premier venture capital firms as well as directly in early stage startups. He brings to Next Legacy a distinguished track record spanning over two decades founding and investing in early-stage technology businesses. Benโ€™s love for technology products formed the basis for his successful venture track record, including early stage investments in Marketo (acquired for $4.75B) and CourseHero (last valued at $3.6B). He previously ran product for Adobeโ€™s Creative Cloud offerings and founded CoffeeTable, where he raised venture capital financing, built a team, and ultimately sold the company.

Ben is an engaged member of the Society of Kauffman Fellows and has been named to the Board of Directors for the San Francisco Chinese Culture Center and Childrenโ€™s Health Council. 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 Palo Alto with his wife, Lydia, and three very active sons.

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

And huge thanks to this episode’s sponsor, Alchemist Accelerator: https://alchemistaccelerator.com/superclusters

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

Brought to you by Alchemist Accelerator.

OUTLINE:

[00:00] Intro
[02:44] Ben’s childhood
[07:54] What is Ben’s superpower?
[16:58] What aspect of being a VC do most founders fail to appreciate?
[18:46] What do GPs fail to appreciate about LPs?
[21:24] The similarities between VC and the intelligence industry
[24:00] What’s changed about being a VC since 2006?
[27:14] How does Ben tell signal from noise?
[32:46] Past track record portability
[37:24] A case study on how a syndicate investor became a lead investor
[41:00] Ben and David nerd out about free T-shirts
[44:26] An example of how a GP convinced Ben to invest in their fund
[47:53] Succession planning in a VC firm
[56:51] How Legacy Venture started
[1:01:28] Next Play + Legacy Venture = Next Legacy
[1:04:05] Which non-profits do the carry go to?
[1:05:48] What kind of GP impresses Ben?
[1:07:58] Ben’s biggest professional lesson in 1998
[1:12:56] Thank you to Alchemist Accelerator for sponsoring!
[1:15:32] Legal disclaimer

SELECT LINKS FROM THIS EPISODE:

SELECT QUOTES FROM THIS EPISODE:

โ€œThe integrity of information. Does this actually stand on its own not because someone said so, but because the mechanics behind it make sense. Does this have internal integrity to it?โ€

โ€œIf you see a thread and you pull it, does it come out as a single piece of thread? Thereโ€™s no integrity right there. If you pull it and the whole fabric starts to warpโ€“… if you pull it and other pieces start to move, there are connections. That thread is actually holding this together.โ€


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Launching Superclusters

Hello friends,

I did a thing.

I started a podcast.

So why the name Superclusters?

I’ve always been a fan of easter eggs. Cup of Zhou also happens to be one of them. Superclusters is another. But this time, rather than leaving it for surprise, I’d love to spell out why and with that, the purpose of this podcast.

In the startup world, we always say startups are the stars of our universe. They shine the brightest and they light up the night sky. We also have tons of aphorisms in the startup world. For instance, “Aim for the stars, land on the moon”. Startups are often called moonshots. They need to achieve escape velocity. And so on.

So if startups are the stars of the universe, galaxies would be VC firms that have a portfolio of stars.

And if galaxies were VC firms, superclusters would be LPs. Superclusters are collections of multiple galaxies. For example, the supercluster that the Milky Way is in is called Laniakea (Hawaiian for “immense heavens,” for the curious).

So why a podcast on the LP world?

  1. The LP industry in ten years will be much bigger than it is today. We are not even close to the TAM of it.
  2. The LP industry will be a lot more transparent than it is today. FYI, as many of you know already, the industry is very opaque. Many want and still like to keep their knowledge proprietary. But what’s proprietary today will be common place tomorrow. I’m not here to share anyone’s deepest, darkest secrets, or anyone’s social security number. That’s none of my business. But the tactics that make the greatest LPs great are already being shared over intimate happy hours and dinners between a select few. And it’s only a matter of time before the rest of the world catches up. We saw the same happen with the VC industry, and now people are moving even more upstream.
  3. I think of content on a cartesian X-Y graph. On the X-axis, there’s intellectual stimulation. In other words, interesting. On the Y-axis, there’s emotional stimulation, or otherwise known as fun. Most financial services (for instance, hedge fund, private equity, venture capital, options trading) content tends to highly index on intellectual stimulation and not emotional. And for the purpose of this pod, I want to focus on making investing in VC funds fun AND interesting.

You can find my podcast on YouTube, Spotify, and Apple Podcasts for now. In full transparency, waiting on RSS feed approval for the other platforms, but soon to be shared on other platforms near you.

You can expect episodes to come out weekly with ten episodes per season, and a month break in between each to ensure that I can bring you the best quality content. ๐Ÿ™‚

You can find my first episode with the amazing Chris Douvos here:

Or if you’re an Apple Podcast person, here’s the Apple Podcast link.

Thank you’s

I am no doubt flawed, clearly evidenced by my verbal “ummmm’s” and “likes” in the podcast. But nevertheless pumped to begin this journey as a podcast host. I expect to grow in this journey tackling the emerging LP space and running a podcast, and I hope you can grow with me. So, any and all feedback is deeply appreciated. Recommendations of who to get on. What questions would you like answered. Formats that you find interesting. I’m all ears.

That said, I’m grateful to everyone who made this possible. My mighty editors, Tyler and JP. Without the two of you, I’d still be struggling telling head from tail on how to do J-cuts and L-cuts. The sole sponsor for the pod, Ravi and Alchemist. And while the pod itself is separate from Alchemist altogether, Ravi pushed me to make it happen. And for that and more, I am where I am now. Every single LP who took a bet on me for Season 1 when all I had for them was an idea and a goal. Chris. Beezer. Eric. Jamie. Courtney. Ben. Howard. Amit. Samir. Jeff and Martin.

And to everyone, who’s offered feedback, advice, introductions and pure energy to fuel all of this. Thank you!

And to you, my readers, I appreciate you taking time out of your busy day when there are so many things that fight for your attention, that you spend time with me every week! If I could just be a bit more self-serving, if you have the chance to tune in, I’d be extremely grateful if you could share it with one LP or one GP who could take something away from it.

Cheers,

David

P.S. Don’t worry. I’ll still continue to write on this blog weekly about everything else in between. That’s a habit I’m not willing to give up any time soon.

P.P.S. I’m already working on and recording for Season 2 of the pod, and I can tell you now that things will only get spicier.

P.P.P.S. Due to a million bugs and a half, I’m still working on launching a dedicated website for the podcast (superclusters.co), but until then, I’ll be sharing the show notes of each episode here.


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.