“I hate checklists. I like outlines. I don’t like checklists. A checklist says ‘I have to have this, and then I’m good. An outline is ‘This is my starting point. These are the kinds of things I want to talk about or kinds of things I need to look at.” — Eric Sippel
Eric Sippel currently runs his family office and is an active investor in and adviser to many venture capital, private equity, hedge and real estate funds. He is a member of the RAISE Global selection and steering committees (the premier emerging VC manager conference) and often speaks to emerging venture manager groups. Previously, Eric was the COO of Eastbourne Capital Management, a multi-billion dollar hedge fund firm, and a Partner at Shartsis, Friese & Ginsburg, where he was a nationally recognized hedge fund and venture capital lawyer. Eric serves on more than a dozen LPACs and has served on many for profit and non-profit boards.
You can find Eric on his socials here:
LinkedIn: https://www.linkedin.com/in/eric-sippel-976770/
Listen to the episode on Apple Podcasts and Spotify. You can also watch the episode on YouTube here.
OUTLINE:
[00:00] Intro
[02:13] Why Eric’s name on LinkedIn is lowercase?
[02:44] Oceanside [04:18] Eric’s grandfather and education in the family
[07:06] Basketball
[07:58] Eric’s first venture fund investment in 1996
[12:05] How does Eric invest below the minimum check size requirement?
[14:51] How to decide your LP check size
[17:47] Today, when does Eric invest in a new GP?
[21:14] Time x capital 2×2 matrix
[24:32] Tough conversations with Eric
[27:00] The minimum viable value-add for LPs who write small checks
[32:02] Eric’s most impactful mistakes
[35:11] How do you know if a GP is GOOD at adding value?
[43:42] How many other funds in the same space does Eric look at before investing?
[46:36] Breaking down Eric’s deal flow
[49:35] How many references does Eric do?
[50:27] Who does Eric trust for LP references?
[52:34] Other references for diligence
[55:23] How does Eric approach a founder reference?
[59:09] Biggest lessons from CIA training
[1:05:16] Mike’s Pizza
[1:06:18] If everything were to change tomorrow, what would Eric photograph?
SELECT LINKS FROM THIS EPISODE:
- Sippel Farb Family Office
- Eric Sippel on The Full Ratchet
- Eric Sippel on Swimming with Allocators
- Eric Sippel on How I Invest
- John Gleeson
- SuccessVP
- Disney
- Bob Iger
- New York Knicks
- Pogroms
- Botticelli
- Nexus Investment Management {fka Nexus Capital Partners)
- Credit Suisse First Boston
- Frank Quattrone
- Cendana Capital
- Michael Kim
- Graham Pingree
- Kelli Fontaine
- Industry Ventures
- Techstars
- Hunter Walk
- The Messy Middle by Scott Belsky
- Scott Belsky
- Work-Bench
- Bank of America
- The LegalTech Fund
- RAISE Global
- Andrew Fielding
- Jonathan Roosevelt
- Stepstone Group
- Hunter Somerville
- Alex Edelson
- Narayan Chowdhury
- Franklin Park
- Wayback Machine
- Spy the Lie: Former CIA Officers Teach You How to Detect Deception by Philip Houston, Michael Floyd, and Susan Carnicero
- Get the Truth: Former CIA Officers Teach You How to Persuade Anyone to Tell All by Philip Houston, Michael Floyd, and Susan Carnicero
- Mike’s Pizza
SELECT QUOTES FROM THIS EPISODE:
“The best way for an LP to construct a venture portfolio is to be diversified across a large enough number of firms and funds. And in particular, those funds should be concentrated. 20-30 companies per portfolio, maybe less in some cases. And they should be diversified across sectors, geographies, vintages, and firms/GPs. You need to have a minimum of 15, but 25-40 feels right to me.” — Eric Sippel
“When I’m thinking about who am I going to say yes to, I’m comparing that to the people I’m cutting out who I think are great and I’m comparing it to the other people who would love to have my capital who I think are great. One of things that drives me is the relationship I have with a GP.” — Eric Sippel
“Never follow your investor’s advice and you might fail. Always follow your investor’s advice and you’ll definitely fail.” — Hunter Walk
“My advice to GPs is to do what they believe is right for maximizing performance and not to listen to their LPs.” — Eric Sippel
“The best way to make money in any asset class is to think differently.” — Eric Sippel
On references… “I’ll talk to as many founders as I can get my hands on that are not on-list. I do not want GPs to introduce me to founders.” — Eric Sippel
“I hate checklists. I like outlines. I don’t like checklists. A checklist says ‘I have to have this, and then I’m good. An outline is ‘This is my starting point. These are the kinds of things I want to talk about or kinds of things I need to look at.” — Eric Sippel