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The Proliferation of LP Podcasts

I am under no illusion that there is a hell of a lot of interest in the LP landscape today. Not only from GPs who are realizing the difficulties of the fundraising climate, but also from aspiring and emerging LPs who are allocating to venture for the first time. The latter of which also have a growing set of interests in backing emerging GPs. And in the center console in this Venn diagram of interests lies the education of how to think like an LP.

I still remember back in 2022 and prior, we had Beezer’s #OpenLP initiative, Ted Seides’ Capital Allocators podcast, Notation Capital’s Origins, and Chris Douvos’ SuperLP.com. Last of which, by the way, can we start a petition to have Chris Douvos write more again? But I digress. All four of which trendsetters in their own right. But the world had yet to catch storm. Or maybe, the people around me and I had yet to feel the acceleration of interest.

Today, in 2024, we have:

There is no shortage of content. LPs are also starting to make their rounds. You’ll often see the same LP on multiple podcasts. And that’s not a bad thing. In fact, that’s very much of a good thing that we’re starting to see a lot more visibility here and that LPs are willing to share.

But we’re at the beginning of a crossroads.

A few years back, the world was starved of LP content. And content creators and aggregators like Beezer, Ted, Nick, and Chris, were oases in the desert for those searching. Today, we have a buffet of options. Many of which share listenership and viewership. In fact, a burgeoning cohort of LPs are also doing their rounds. And that’s a good thing. It’s more surface area for people to learn.

But at some point, the wealth of information leads to the poverty of attention. The question goes from “Where do I tune into LP content?” to “If I were to listen to the same LP, which platform would I choose to tune into?“

After all, we only have 24 hours in a day. A third for sleep. A third for work. And the last competes against every possible option that gives us joy — friends, hangouts, Netflix, YouTube, hobbies, exercise, passion projects and more.

In the same way, Robert Downey Jr. or Emma Stone or Timothée Chamalet (yes, I just watched Dune 2 and I loved it) is going to do multiple interviews. With 20, 30, even 50 different hosts. But as a fan (excluding die-hard ones), you’re likely not going to watch all of them. But you’ll select a small handful — two or three — to watch. And that choice will largely be influenced by which interviewer and their respective style you like.

While my goal is to always surface new content instead of remixes of old, there will always be the inevitability of cross-pollination of lessons between content creators. And so, if nothing else, my goal is to keep my identity — and as such, my style — as I continue recording LP content. To me, that’s the human behind the money behind the VC money. And each person — their life story, the way they think, why they think the way they think — is absolutely fascinating.

In closing

There’s this great Amos Tversky line I recently stumbled upon. “You waste years by not being able to waste hours.” And in many ways, this blog, Superclusters, writing at large, and my smaller experiments are the proving grounds I need to find my interest-expertise fit. Some prove to be fleeting passions. Others, like building for emerging LPs, prove to be much more.

Photo by Jukka Aalho on Unsplash

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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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#unfiltered #50 What is Your Opening Bid?

“Is your opening bid to assume trust – to assume someone is trustworthy – and to grant them the full benefits of that? Or is your opening bid to not trust, but the trust can be earned?”

Over the past weekend, my friend shared this brilliant interview between Jim Collins and Shane Parrish at Farnam Street. The same friend who recommended this podcast that catalyzed my essay on how to think like an LP. So, needless to say, when she sent me this one, I had to tune in. I’ve been a big fan of Jim for a long time, ever since one of my favorite college professors recommended that I read Good to Great. He has an amazing talent with wordsmithing – bringing seemingly incongruous concepts together in analogous harmony. So when Jim uttered the above quote, I took my Staedtler pen and 180 g/m2 paper out.

“Have you ever considered the possibility?”

Jim also shared, “Brutal fact: Not everyone is trustworthy. And the brutal fact is that some people abuse that trust.” Some people will abuse that trust. Some people will really let you down. But that, in my opinion, as well as Bill Lazier’s – Jim Collins’ mentor, is just the cost of living. That shouldn’t change your disposition in the world, but rather illustrate how much more you should cherish the ones that are trustworthy.

Jim furthered that notion with another anecdote from his mentor, Bill. “Have you ever considered the possibility, Jim, that your opening bid affects how people behave? If you trust people, you’re more likely that they will act in a trustworthy way. So it’s a double win. It’s the best people and they’ll behave in a trustworthy way. The flip side is if you have an opening bid of mistrust, the best people will not be attracted to that. If you have an opening sense of you have to earn my trust, […] some of the best people are gonna be like ‘I don’t need to put up with that. I’ll go do something else.'”

Thinking aloud

Coincidentally, a few weekends ago, one of my good friends hosted a thought lounge. The first I’ve participated after hearing about it for a few years. The purpose of which, and I quote, “is meant to be a place where passionate people come together to practice dialogue and have meaningful conversations.” Every person brings in a topic that’s designed to spark kinetic intellectual energy that each lasts for 12 minutes. And where “creative conflict” is encouraged.

It just so happens that one of the four topics that came up that day was the law of attraction. A concept that states that similar people attract each other. And that one’s thoughts can attract similar results. The more you think you will succeed, the more likely you are to succeed. And likewise the same might be true for failing. One of my fellow participants brought up a great Henry Ford quote: “Whether you think you can, or you think you can’t – you’re right.”

And it acutely reminds me of a story I once read in Tim Ferriss’ Tribe of Mentors. Robert Rodriguez, who directed one of my childhood favorite franchises Spy Kids, shared with Tim when asked the question, “If you could have a gigantic billboard anywhere with anything on it, what would it say and why?”

“I like the idea of setting impossible challenges and, with one word, making it sound doable, because then it suddenly is. So I’d choose FÁCIL! for my billboard. It’s a good reminder that anything can be done, with relative ease and less stress, if you have the right mindset. […] Attitude comes first.”

In closing

“Is your opening bid to assume trust – to assume someone is trustworthy – and to grant them the full benefits of that?”

That’s the line I need on my fortune cookie. If one day I unwittingly become a foolhardy skeptic, I want to open up a fortune cookie after a lonely meal I’ve stuffed myself to the brim on. On a quiet late night Uber ride home, thinking I’ve eaten all I can eat… I want to read that line.

My opening bid is trust. It always has been. And I hope it always will be. I know that people have taken advantage of my kindness and trust. And I know there will be more that will in the future. But I hope I never lose the optimism in my eyes.

My opening bid is still trust. What’s yours?

Photo by Marek Piwnicki on Unsplash

#unfiltered is a series where I share my raw thoughts and unfiltered commentary about anything and everything. It’s not designed to go down smoothly like the best cup of cappuccino you’ve ever had (although here‘s where I found mine), more like the lonely coffee bean still struggling to find its identity (which also may one day find its way into a more thesis-driven blogpost). Who knows? The possibilities are endless.

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Think like an LP to Get a Job in VC

I want to preface this piece by first saying, though I have LP (limited partner) friends, I’ve never been an LP. So take everything with a grain of salt. For that matter, even I have been an LP, still take this with a grain of salt. After all it’s just my one perspective on the world. Nevertheless, I hope this perspective helps to provide some context around the venture space. As it did for me.

For years, I’ve recommended my friends who were looking at startup job opportunities to think like a VC. And having chatted a number of firms over the years about scout, associate/analyst, venture partner roles, I’ve come to a new revelation. Or rather one that I’ve practiced for a while, but haven’t connected the dots until recently.

When you’re looking for VC job opportunities, think like an LP. I’ve written about the LP calculus a few times before, like:

Here are some questions I usually consider:

  • How have you thought about your own differentiation that gets you access to some of the uniquely fund-defining opportunities you have?
  • What are the startups in your anti-portfolio? And what have you learned since from them?
  • [if their funds are wildly different in fund size (i.e. Fund I – $20M, Fund II – $100M)] How do you think about fund strategy now versus Fund [t_now-1]?
    • For context, usually each subsequent fund doubles in size. i.e. Fund I $20M, Fund II $40-50M, Fund III $80-100M
  • [If they have fund advisors, EIRs, and/or scouts] How do you pick advisors? What is your mental model for picking scouts?
    • Or one of my favorite phrasings: How do you differentiate the good from the great [advisors/scouts]?

Over the weekend, my friend sent me a great podcast for me to unwind. In it, I found an unlikely hero soundbite. “Your library holds a lot of value that you may not know until the story arrives. […] No one’s selling characters ’cause they’re one story away from this character becoming a hit.” While its context is related to why Marvel won’t sell any of its superheroes, Alex Segura‘s, co-president of Archie Comic Publications, anecdote proves just as insightful to the world of venture.

Discovering first-time early-stage founders is hard. The same is true for finding the next killer GP or venture firm. AngelList’s Rolling Funds are democratizing access to capital, lowering the barrier to entry for emerging fund managers. And really the success of a fund is determined by its MOIC – multiple on invested capital. 5x and up would be ideal. And that, like I mentioned in my last blogpost, boils down to the fund’s top one or two winners. Loosely analogized to a fund’s unicorn rate (percent of portfolio that are unicorns). In other words, the “one [investment] away from this [fund] becoming a hit.”

To see if a fund can consistently find those stories boils down to its systems. Often times, you’re joining a fund that has yet to have a runaway success. Or a fund that has a fund returner. So, instead, you’re looking at their thesis and if their thesis allows them to be:

  1. The best dollar on the cap table of a startup in their scope
  2. Forward-thinking enough to see where the market is heading, rather than where it’s been
    • And by definition of being forward-thinking, taking bets/risks that few other VCs would, yet calculated enough to make logical sense given the trajectory of the market. In other words, is the thesis grounded on first principles, yet able to capture their second-order effects?
    • That, in turn, requires you as a VC applicant to have decent literacy in the market the firm is betting in.

As James Clear, author of Atomic Habits, wrote, “You do not rise to the level of your goals. You fall to the level of your systems.” What are their mental models? Fund strategy? How do they think about portfolio construction? About capital allocation? And more importantly, time allocation?

If you’re looking to learn more about GP-LP dynamics, I highly recommend Samir Kaji’s Venture Unlocked podcast and Notation Capital’s Origins podcast.

Photo by Micheile Henderson on Unsplash

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One of the Toughest Job Requirements to be a VC

I passed on a deal.

Every time I think it’s easier to say “pass on the good to make space for the great”, the world says you’re wrong. Last week, once again, I realized how hard it was to say “No”.

We’d been chatting for a few months now. They were raising a pre-seed. And they checked most of the boxes I look for in an epic founding team:

  • Spent time in the idea maze and deep domain expertise,
  • Had a unique insight which led to innovation in their business model,
    • Because I didn’t know their market well enough, I hesitate to say if this was an earned secret or just a lesser-known fact that an outsider would never hear about. The difference between, what Kanyi Maqubela at Kindred Ventures, a mystery and a secret.
  • Consistently followed through with their promises and commitments (to me),
  • Dreamed big – big TAM, big vision,
  • Hustled to build relationships with some of the largest enterprise customers in their sector (though, yet to close any contracts),
  • Onboarded some incredible talent,
    • As I heard on my buddy’s podcast recently, “you can only learn from experience, but it doesn’t have to be yours.

I’ve written more here about what I look for.

Over the past few months, I asked for more time in hopes to find something more. Admittedly, I could think of a million excuses. And I have. I could have said:

  • They’re too early, since I rarely do pre-seed deals these days.
  • Or it’s the lack of traction.
  • Maybe that they could be more articulate about their go-to-market and product-market fit.
  • Maybe it’s the fact that at an early stage, that they have both a CEO and president. In other words, competing personalities in leadership.
  • Surprisingly large team for pre-seed startup.
  • Or, simply, I don’t know their space well enough, albeit adjacent to mine.

The more I thought about it, the more I realized I was just making excuses. I could circumvent most of these “reasons” with just a little effort on my part. And the fact that I was introduced to them by someone I really respect in the industry didn’t make it any easier. In fact, that alone was one of the strongest driving forces for me to want this deal to work out. The truth is, I just wasn’t excited about the product. And I had been spending time – arguably wasting theirs – trying to find my excitement. But I couldn’t, no matter how hard I tried.

I know it may be completely self-serving here. Call it immaturity or naivete. As a scout, I live by a self-imposed rule that every deal I refer, I want to be their greatest champion – their greatest evangelist – when I do so. In other words, if I had the capital, I would invest in each and every one I refer. On the same token, every deal I refer is just the start of an exciting long-term relationship. Post-referral, during diligence, post-investment and even if the deal doesn’t close. But for this startup, I just felt myself dragging my feet through knee-deep water just to meet with them over time.

Thinking I was in over my head, I hit up two mentors of mine in the space to give me the reality check I thought I needed. I thought and was, borderline, hoping they’d say, “You’re a sucker to bring personal emotions into an investment.” Or “Suck it up. Stop being a millennial/snowflake.” But neither did. I also told another friend last night and she replied, “It’s what makes you human. And I think people need to know about this side of VC.”

So, I’m writing this now in hopes that it will contextualize some of the decisions we make on this side of the table. I made the decision with the expectation that I’d be forgotten or passed on by them when they raise a future round. If they ask me again, it’ll be an honor and a privilege. And maybe my disposition will change in 1-2 years’ time. But it’s naive of me to expect that. Nevertheless, I still wish them the absolute best, and I hope they become the rock-star success they set out to be.

Photo by Bruce Jastrow on Unsplash

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#unfiltered #18 Naivety vs Curiosity – Asking Questions, How to Preface ‘Dumb’ Questions, Tactics from People Smarter than Me, The Questions during Founder-Investor Pitch

asking questions, naivete vs curiosity, how to ask questions

Friday last week, I jumped on a phone call with a founder who reached out to me after checking out my blog. In my deep fascination on how she found and learns from her mentors, she shed some light as to why she feels safe to ask stupid questions. The TL;DR of her answer – implicit trust, blended with mutual respect and admiration. That her mentors know that when she does ask a question, it’s out of curiosity and not willing ignorance – or naivety.

But on a wider scope, our conversation got me thinking and reflecting. How can we build psychological safety around questions that may seem dumb at first glace? And sometimes, even unwittingly, may seem foolish to the person answering. The characteristics of which, include:

  • A question whose answer is easily Google-able;
  • A question that the person answering may have heard too many times (and subsequently, may feel fatigue from answering again);
  • And, a question whose answer may seem like common sense. But common sense, arguably, is subjective. Take, for example, selling losses and holding gains in the stock market may be common sense to practiced public market investors, but may feel counter-intuitive to the average amateur trader.

We’re Human

But, if you’re like me, every so often, I ask a ‘dumb’ question. Or I feel the urge to ask it ’cause either I think the person I’m asking would provide a perspective I can’t find elsewhere or, simply, purely by accident. The latter of which happens, though I try not to, when I’m droning through a conversation. When my mind regresses to “How are you doing?” or the like.

To fix the latter, the simple solution is to be more cognizant and aware during conversations. For the former, I play with contextualization and exaggeration. Now, I should note that this isn’t a foolproof strategy and neither is it guaranteed to not make you look like a fool. You may still seem like one. But hopefully, if you’re still dying to know (and for some reason, you haven’t done your homework), you’re more likely to get an answer.

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