Tag: jamie rhode

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Timeless Content for the Weary Investor

city, ads, information

“If you don’t read the newspaper, you’re uninformed. If you do read it, you’re misinformed. […] What is the long term effect of too much information? One of the effects is the need to be first, not even to be true anymore. So whatever responsibility you all have… to tell the truth, not just to be first.” — Denzel Washington

Since I’ve first started this blog, I’ve always had a bias towards sharing evergreen content. Lessons that can be applied to any era. Of course, not all my thoughts withstood, nor will withstand the test of time, but the goal was to be intentional with what I was putting out there. The bias was also due to the fact that I didn’t think I was best in class in being first to news updates (although opportunistically I could be).

And while not SEO-optimized, I find peace in delivering content that is hopefully as useful today as it will be tomorrow. In that regard, this blog will forever stay a blog, as opposed to any semblance of the traditional definition of media, which at the end of the day is the acquisition and monetization of attention. The latter of which I don’t plan to do for this blog, ever.

That said, the consumption of information is often just as if not more important than the production of information. In the words of my friend, one’s information diet. And if you’ve been around this blog long enough, you’ll be no stranger to that term. Of which about 50% of my information intake is ephemeral and 50% evergreen. But for the purpose of this blogpost, this one is less about me, but about the information diet of friends and colleagues. Where do many of the VCs and LPs I respect consume their evergreen content?

So I went around and asked the simple question:

Do you have 1-2 examples of evergreen content you love revisiting or stays in your mind rent-free?

In other words, what do you read when you need to get to the bottom of things, not just to stay on top of things?

By nature of being friends with everyone I asked, and to reduce the noise in the below list, I’ve excluded every mention of a specific blog whose first word is a synonym to ‘mug’ and a specific podcast whose name is inspired by astrophysical concepts. I asked about 20 VCs and LPs each. Whose fund sizes ranged from 7-figures to 10-figures. Whose tenures in investing ranged from five years to thirty years. Geographically, all except two I asked reside in North America, but many also invest into geographies external to the star-spangled banner and the home of the maple leaf.

There was no particular reason as to why I sampled as such, other than an availability bias. All of whom I could text or ping pretty quickly and get a response. After all, I incubated the idea for this post earlier this week. Also, by default, all recommendations were kept anonymous.

But without further ado, I’ve compartmentalized the below content into:

  1. What VCs consume
  2. And, what LPs consume

You’ll notice some do overlap, which goes to show how timeless some things are.

What VCs consume

Blogs:

Books:

Papers:

increasing conviction while saving timeDownload

Podcasts:

People to follow:

Manifestos:

Source: Holstee Manifesto

What LPs consume

Blogs:

Books:

  • The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness by Morgan Housel
  • The Power Law: Venture Capital and the Making of the New Future by Sebastian Mallaby
  • The Big Picture: On the Origins of Life, Meaning, and the Universe Itself by Sean Carroll
  • Thinking in Bets: Making Smarter Decisions When You Don’t Have All the Facts by Annie Duke
    • The amazing Jamie shared the below bullets as to why Annie Duke’s book is just that good, and Jamie’s words were too good not to include:
      • Embrace Uncertainty: I can make more rational and less emotionally driven decisions
      • Resulting: People judge the quality of a decision based on its outcome rather than on the decision-making process. THIS HAPPENS ALL THE TIME IN VC!!!! Annie argues that a good decision can lead to a bad outcome and vice versa, so it’s crucial to focus on the process rather than just the results.
      • Probabilistic Thinking: Think in probabilities rather than absolutes. By estimating the likelihood of different outcomes, individuals can make more informed decisions. This approach helps in managing risks and setting realistic expectations.
      • Learning from Feedback: Learning from both wins and losses is crucial, instead of attributing success solely to skill or failure to bad luck, understand what contributed to the outcome
      • Decision Groups: Forming decision groups where members can share insights and challenge each other’s thinking- this can help identify biases and improve the quality of decisions, I would say a key part of what happens at Screendoor 
      • Importance of process: Developing and following a structured approach, individuals can make better decisions even in the face of uncertainty.

Lectures:

Podcasts:

People to follow:

Additionally, one LP shared their more comprehensive list of content they revisit often. One that’s well-worth bookmarking.

I don’t know about you, but I know what I’m doing this weekend.

Big thanks to all the LPs and VCs I reached out to for recommendations, including Jamie Rhode, Eric Bahn, John Rikhtegar, and everyone else who shared their thoughts on short notice before we had a chance to get the compliance’s blessing.

P.S. John had probably the most unique pieces of evergreen content he regularly revisited. While I won’t spoil which, you can probably guess based on which of the above seem like recommendations off the beaten path.

Photo by Anthony Rosset on Unsplash

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.

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“Who Else is Investing?” Is a Good Question

who, who else

Ok, before y’all rise up in arms, hear me out. And if by the end of this blogpost, you still want to bring the pitchforks and torches, so be it.

Generally, I get it. Who else is investing isn’t usually a great question. Because for most investors who ask this question, it means they’re outsourcing their conviction.

Tweet I stumbled on reading Chris Neumann’s post yesterday

In fact, I wrote a quick LinkedIn (and tweet) post about it the day before yesterday. Which admittedly got a lot more attention than I expected. And if you have the time, it’s worth seeing the discussion on that post that ensued.

Source: Me on LinkedIn
Yes, I’m a dark mode user. 🙂

So, potentially hot take, I believe investors should ask the question. Who else is investing? It’s part of the diligence process. That said, when they ask that question is key. There’s a vast ocean between the shores of asking that question before you reach conviction and after.

If you pop the question before you reach conviction, well, we’ve seen the follies of that. Most evidenced by the manic rush of 2020 and 2021 into “hot deals” largely led by names that grew to popularity around the dinner table.

If you pop it after, it’s diligence. Where the availability of names shouldn’t convince you to bat or lack thereof to otherwise. But that you now have additional opportunities to reference check and cross-diligence the same opportunity. And it extends to the LP side as well. Jamie Rhode who’s now at Screendoor, said on a Superclusters episode that one of her greatest lessons as an LP was committing to a fund where there was a bunch of soft commits but far less in hard commits, and ended up overexposing Verdis (where she was at) to a single asset and taking a much higher ownership as an LP into a single fund.

Truth is, LPs pay GPs for their opinion. Not anyone else’s. And while given long feedback loops, no one really knows what’s right and what’s wrong except over a decade later and only in hindsight, you have to really believe it, and be able to back it up.

Photo by Patrick Perkins on Unsplash

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.

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S1E4: Jamie Rhode

Jamie Rhode is Principal at Verdis Investment Management, focused on venture capital, private equity and hedge fund investment sourcing and due diligence.

She joined Verdis from Bloomberg, where she held roles in both equity research and credit analysis. There, she created, managed and leveraged an extensive library of statutory and financial and market data for buy and sell-side clients that use Bloomberg to make investment decisions.

A licensed Chartered Financial Analyst, she earned her bachelor’s degree in Finance and Marketing from Drexel University’s College of Business Administration.

You can find Jamie on her socials here:
Twitter: https://twitter.com/DurationFX
LinkedIn: https://www.linkedin.com/in/jerrcfa/

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
[04:27] What skills did Jamie acquire while working at Bloomberg
[08:45] What inspired Jamie to go into equity research
[11:55] Verdis’ original allocation model
[13:27] How Verdis first built their deal flow in 2016
[15:26] What Jamie likes in a cold email
[16:41] What kind of cold email to VCs won Verdis an 80% response rate?
[20:27] Verdis’ inbound vs outbound deal flow over the years
[22:34] Why Verdis’ mandate is to invest in diversified portfolios as opposed to concentrated portfolios
[27:50] The downsides of early distributions
[32:12] The benefits of early distributions
[36:01] Luck versus skill
[40:15] Why does Verdis measure “outliers” as opposed to unicorns
[44:37] The relationship between proprietary deal flow and portfolio allocation models
[45:55] How does Verdis decide which portfolio funds get re-ups
[48:52] Why GPs shouldn’t conform their strategies to LPs’ mandates
[51:08] Why LPs should also have consistent strategies
[53:28] Why Verdis invests a third of their fund in funds based in Los Angeles
[58:50] A case study on what happens when you skip a step in the due diligence process
[1:02:57] The two things a GP can do to win Jamie over
[1:05:32] When does Verdis like to receive their tax documents from GPs?
[1:08:46] Thank you to Alchemist Accelerator for sponsoring
[1:11:23] Legal disclaimer

SELECT LINKS FROM THIS EPISODE:

SELECT QUOTES FROM THIS EPISODE:

“Diversified managers have struggled a lot more to raise capital than more concentrated managers. I think it’s a little bit of a contrarian approach.”

“That venture capital bucket is the compounding machine for the family. We don’t look to that bucket for liquidity.”

“If you’re compounding at 25% for 12 years, that turns into a 14.9X.If you’re compounding at 14%, that’s a 5. And public market which is 11% gets you a 3.5X.”

“90% of your overall return comes from asset allocation, not individual investments.”

“If that asset is compounding at 20%, still the last 20% of time produces 40% of your return.”

“Outliers don’t truly emerge until 8-10 years after the investment.”

“If you provide me exposure to the exact same pool of startups [as] another GP of mine, then unfortunately, you don’t have proprietary deal flow for me. You don’t enhance my network diversification.”

Follow David Zhou for more Superclusters content:
For podcast show notes: https://cupofzhou.com/superclusters
Follow David Zhou’s blog: https://cupofzhou.com
Follow Superclusters on Twitter: https://twitter.com/SuperclustersLP
Follow Superclusters on TikTok: https://www.tiktok.com/@super.clusters
Follow Superclusters on Instagram: https://instagram.com/super.clusters

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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. 🙂

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.

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