“The limiting downside is actually something a lot of emerging managers don’t think about. If you can turn all of your portfolio companies that don’t hit that exit velocity, if you can find a soft landing for those companies versus that’s a writeoff and they’re dead and done, that’s extra effort, but that’s an extra turn on your fund’s performance.” — Carson Monson
Carson Monson is a seasoned allocator with nearly a decade of experience backing emerging and spinout GPs across large institutions, government entities, and family offices. After stints at Greenspring, SITFO, and building a fund of funds strategy for a large European single family office, he now runs the fund of funds at CrossRange, which focuses on supporting top-tier emerging and spinout GPs.
Carson has backed everything from micro funds to high-profile managers spinning out of tier-one firms. He is deeply committed to being a thought partner and strategic resource to the GPs he supports, helping them navigate the complexities of fund building and long-term success in the VC industry.
You can find Carson on his socials here:
LinkedIn: https://www.linkedin.com/in/carson-k-monson/
X / Twitter: https://x.com/Monsson_
Listen to the episode on Apple Podcasts and Spotify. You can also watch the episode on YouTube here.
OUTLINE:
[00:00] Intro
[02:08] Wildlife and wholesome trouble
[06:03] The journey to being an LP
[10:54] How did Carson join Greenspring?
[13:55] Lessons across Greenspring
[15:46] How many deals did Greenspring do per year?
[18:46] An example of a qualitative metric worth measuring
[20:16] How many off-thesis bets is a VC allowed to make?
[21:25] When do GPs move from thematic bets to opportunistic bets?
[25:45] How much AUM should any one GP have?
[29:46] Why does Carson liked concentrated portfolios?
[30:32] The case for concentrated portfolios
[36:40] Relationships with GPs should stay at the LP partner level
[39:49] Fund strategy at Fund (n) vs Fund (n + 1)
[45:19] What the hell is ‘critical node theory?’
[49:54] Examples of great references
[52:58] The halo effect of mega funds
[58:48] How does Carson get to inbox zero
[1:02:09] Why is CrossRange different?
[1:08:17] The last time Carson had a pinch-me moment
[1:10:17] Carson’s ricotta gnocchi
[1:12:28] Post-credit scene: Ramen, gluten, Tokyo, and Tonkatsu Suzuki Pt 2
SELECT LINKS FROM THIS EPISODE:
- Wall Street Journal
- House of Medici
- Fred Wilson
- AVC (Fred Wilson’s blog)
- Jeffrey Bussgang
- Mastering the VC Game by Jeffrey Bussgang
- Leonardo Da Vinci
- Michelangelo
- Greenspring Associates
- The University of North Carolina at Chapel Hill
- Venture Capital Investment Competition (VCIC)
- Sara Zulkosky
- Georgetown University
- Recast Capital
- University of California, Berkeley
- Utah School & Institutional Trust Funds Office (SITFO)
- David Anderman
- Stellar Ventures
- “Venture Capital is DEAD!” w/ Chris Douvos
- SV Angel
- Moneyball (film)
- Rick Zullo
- Equal Ventures
- “How to Build an Emerging Manager Community” with Rick Zullo
- Union Square Ventures
- Critical node theory
- Daniel Gay
- Spencer Nam
- David York
- Top Tier Capital Partners
- “Listening to the Heartbeat of the Market” with David York
- Tonkatsu Suzuki
SELECT QUOTES FROM THIS EPISODE:
On if 20% of the fund is focused on opportunistic bets… “Wealthy is a nice word. I would say [20% is] egregious. […] 10%, it’s not like it’s the right number, but it’s the number most LPs won’t contest.” — Carson Monson
“In the past, there have been GPs who are truly excellent at one thing or a couple of things, whether that’s a thesis, strategy, or an approach. And that approach makes a ton of sense at the fund size that they’re operating at or maybe a little bit larger. In the 20-teens especially, people were able to raise more and more, and strategy drift became a huge issue. That is something managers have to face the music on now. It’s almost like the idea of being a professional baseball player and grinding and working your way up and becoming excellent and an all-star baseball player. Then being, ‘Well, the motion is similar in cricket, so I’ll just go play cricket now.’ Ya some of the motions are similar, but it’s a fundamentally different sport. Strategy drift, fund size drift; it can be a really easy trap to fall into. The motions are similar, but you lose that competitive edge when you start to play a different sport.” — Carson Monson
“If you’re more concentrated, there is an ability to impact outcomes more meaningfully. I like GPs that play a critical role in the ecosystem in which they operate in. If you play a critical role—whether that’s in go-to-market motions, whether that’s in commercialization, whether that’s in branding and storytelling—there are so many ways you can play that role. Those types of GPs tend to have an ability to move the needle for their founders more—both on the upside and limiting the downside.” — Carson Monson
“The limiting downside is actually something a lot of emerging managers don’t think about. If you can turn all of your portfolio companies that don’t hit that exit velocity, if you can find a soft landing for those companies versus that’s a writeoff and they’re dead and done, that’s extra effort, but that’s an extra turn on your fund’s performance. There is a skillset in identifying that there’s still good in a company, even if it’s not going to have this massive outcome.” — Carson Monson
“Venture should play more like Moneyball. If you can get your companies on base and limit strikeouts, that is actually so impactful at a fund level. More emerging managers should try to think like CIOs, and less like individual investors, like being a portfolio manager and managing outcomes. Obviously, venture is a game of minority positions. You do not have sole control. Playing that role for your founders, it impacts performance. It impacts reputation and, in fact, your ability to win in the future.” — Carson Monson
“You cannot say, ‘I’m going to be SV Angel today, so I can be USV tomorrow.’” — Carson Monson
“A multi-billion dollar mega fund has to have a portfolio of companies whose aggregate equity value outstrips the GDP of most small nations on this planet.” — Carson Monson