“Some of the best investments, as we look back in history, were never obvious at the moment the investments were made. You may not have to be contrarian, but you have to have a variant perception than the rest of the market. Maybe you saw the team differently. You saw the space growing differently. That, to us, inherently, is a single decision maker-type thought process at the earliest stage, when it’s less about metrics. It’s more about how you evaluate the talent and the team.” – Sean Warrington
Sean Warrington leads private market investing at Gresham Partners, a $10 billion multi-family office based in Chicago. Known for being a transparent and user-friendly LP, he and the Gresham team aim to simplify the fundraising process — offering single-check investments, a streamlined diligence process, and prompt, candid feedback to GPs.
[00:00] Intro [03:29] Who is Jeff French? [05:26] The metrics for success for a junior LP [07:20] The 3 chapters of Sean’s evolution as an LP [11:05] Sean’s first investment [14:44] When GPs put LPs on strict timelines [16:53] One archetype of GP that Sean is excited about [19:37] What it looks like to be thoughtful when growing AUM [23:16] What most LPs don’t understand about solo GPs [25:58] What happens when a GP leaves a partnership [27:33] The definition of LP/GP alignment [30:47] Reference archetypes and how to find them [35:32] How to manage bandwidths in a small team [38:58] Frameworks for taking calls [42:26] How much does Sean travel? [43:25] Why coffee chats don’t work [45:30] What Sean’s changed his mind on about investing [47:12] What did Jason Kelce’s retirement mean to Sean? [49:36] Post-credit scene
“If you’re 60-70% of the time picking good managers, I think you’re pretty good at this industry.” – Sean Warrington
“Frameworks are not foolproof. What they’re designed to do is help us focus on places where we can get to an eventual yes.” – Sean Warrington
“We don’t want a slow no. A slow no is bad for everybody.” – Sean Warrington
“Some of the best investments, as we look back in history, were never obvious at the moment the investments were made. You may not have to be contrarian, but you have to have a variant perception than the rest of the market. Maybe you saw the team differently. You saw the space growing differently. That, to us, inherently, is a single decision maker-type thought process at the earliest stage, when it’s less about metrics. It’s more about how you evaluate the talent and the team.” – Sean Warrington
“One thing LPs are bad at remembering is we are exceptionally diversified investors. For us, to have anything even be 1% – even a manager being a single percent of the overall pool of capital – is very difficult to do. Many times we’re talking about basis points.” – Sean Warrington
“The big risk that LPs don’t appreciate… There’s this view that these two- and three-person teams coming together create this better judgment. What they’re not factoring in is that these are somewhat forced marriages. These are people who may or may not have long histories together. They may not have great bedside manner when they’re in the thick of it.” – Sean Warrington
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.
“Most references will not give a negative reference about someone, but you will have to understand and listen between the lines. What is a good or a bad reference? They might say, ‘I really like him as a person. He’s really nice.’ But this is a person that’s worked together with you in a team, and you’re not saying he’s great with founders or finding the best deals. Maybe he’s not that good.” – Raviv Sapir
Raviv Sapir is an early-stage investor at Vinthera, a fund of funds and venture firm with a hybrid strategy that combines VC fund investments with direct startup investments. With a background in tech and finance, an MBA from HEC Paris, and years of experience mentoring startups and supporting LPs, Raviv brings a sharp eye for high-conviction opportunities and a practical approach to venture. He previously held product roles at leading Israeli startups and served in a technological unit within the Israeli Defense Forces. His work across geographies, sectors, and investment stages gives him a uniquely holistic and global perspective on the venture ecosystem.
[00:00] Intro [03:31] Swimming since he was 7 [09:49] Breaking down each GP’s track record and dynamics in a partnership [11:25] Telltale signs that a partnership will last [12:50] An example of questionable GP dynamics [21:45] Virtual partnerships [25:43] GPs working out of coworking spaces [28:30] Commonly held LP assumptions [32:16] A big red flag GPs often say [34:27] What does Raviv look for during reference calls? [39:41] How does the diligence change for a Fund I/II vs Fund III/IV? [42:26] Qualitative traits Raviv likes to see in a Fund I GP vs Fund II+ GP [44:04] Ideal cadence of reporting and LP/GP touchpoints [46:03] Role of the LPAC across different funds [48:47] Diligence as a function of check size [54:37] What’s Raviv’s favorite episode of Venture Unlocked? [56:23] The podcasts that Raviv listens to
“Some of the small funds perform better but a lot of them–… they perform much worse because the variance in their performance is so big. You might have good odds of succeeding with a small fund but very high odds of performing way worse than the bigger funds.” – Raviv Sapir
“GPs are great at selling. ‘Every time is the best time to invest.’” – Raviv Sapir
“Most [references] will not give a negative reference about someone, but you will have to understand and listen between the lines. What is a good or a bad reference? They might say, ‘I really like him as a person. He’s really nice.’ But this is a person that’s worked together with you in a team, and you’re not saying he’s great with founders or finding the best deals. Maybe he’s not that good.” – Raviv Sapir
“‘Interesting’, especially in the US, is used in a negative way.” – Raviv Sapir
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.
“A lot of family office principals, unless they’ve worked in finance – they should not be solely making the decision on which RIA to hire.” – Scott Saslow
Scott Saslow is the founder, CEO, and family office principal for ONE WORLD. He’s also the founder and CEO of The Institute of Executive Development, as well as the author of Building a Sustainable Family Office: An Insider’s Guide to What Works and What Doesn’t, which at the time of the podcast launch is the only book written for family office principals by a family office principal. Scott is also the host of the podcast Family Office Principals where he interviews principals on how families can be made to be more resilient. Prior, he’s also found independent success at both Microsoft and Seibel Systems.
[00:00] Intro [02:09] The significance of ‘ojos abiertos’ [05:49] Scott’s relationship with his dad [07:46] The irony of Scott’s first job [11:19] Family business vs family office [13:50] The corporate structure of a family office [17:39] From multi family office to single family office [18:54] The steps to pick a MFO to work with [22:37] The 3 main functions a family office has [31:00] Why Scott passed on SpaceX [36:07] Why Scott invested in Ulu Ventures [44:23] What makes Dan Morse special
“A lot of family office principals, unless they’ve worked in finance – they should not be solely making the decision on which RIA to hire.” – Scott Saslow
“The three main functions that family offices tend to have are investment management, accounting and taxes, and estate planning and legal.” – Scott Saslow
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.
The title says it all. I’m four seasons in and I’m fortunate to have learned from some of the best and most thoughtful individuals in the LP industry. I often joke with friends that Superclusters allows me to ask dumb questions to smart people. But there’s quite a bit of truth there as well. I look back in Season 1, and I’m proud to see the evolution of my questions as well.
There was a piece back in 2022 where Johns Hopkins’ Jeff Hooke said that “75% of funds insist they are in the top quartile.” To my anecdotal knowledge, that seems to hold. I might say 75% of angel investors starting their first funds say they’re top quartile. And 90% of Fund IIs say their Fund Is are top quartile. So the big looming question as an LP is how do you know which are and which aren’t.
And if we were all being honest with each other, the first five years of returns and IRRs really aren’t indicative of the fund’s actual performance. In fact, Stepstone had a recent piece that illustrated fewer than 50% of top-quartile funds at Year 5 stay there by Year 10. 30% fall to second quartile. 13% slip to third. 9% fall from grace to the bottom quartile. But only 3.7% of bottom-quartile funds make it to the top quartile after its 10-year run (on a net TVPI basis).
I’ve enjoyed every single podcast episode I’ve recorded to date. And all the offline conversations that I’ve had because of the podcast itself. Nevertheless, it’s always fascinating when I learn something for the first time on the podcast while we’re recording. Excluding the longer lessons some of our guests have shared (I’m looking at you Evan, Charlotte, and much much more), below are the many Twitter-worthy (not calling it X) soundbites that have come up in the podcast so far.
“Entrepreneurship is like a gas. It’s hottest when it’s compressed.” — Chris Douvos
“I’m looking for well-rounded holes that are made up of jagged pieces that fit together nicely.” — Chris Douvos
“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.” — Jamie Rhode
“Sell when you can, not when you have to.” — Howard Lindzon
“When you think about investing in any fund, you’re really looking at three main components. It’s sourcing ability. Are you seeing the deals that fit within whatever business model you’re executing on? Do you have some acumen for picking? And then, the third is: what is your ability to win? Have you proven your ability to win, get into really interesting deals that might’ve been either oversubscribed or hard to get into? Were you able to do your pro rata into the next round because you added value? And we also look through the lens of: Does this person have some asymmetric edge on at least two of those three things?” — Samir Kaji
“85% of returns flow to 5% of the funds, and that those 5% of the funds are very sticky. So we call that the ‘Champions League Effect.’” — Jaap Vriesendorp
“The truth of the matter, when we look at the data, is that entry points matter much less than the exit points. Because venture is about outliers and outliers are created through IPOs, the exit window matters a lot. And to create a big enough exit window to let every vintage that we create in the fund of funds world to be a good vintage, we invest [in] pre-seed and seed funds – that invest in companies that need to go to the stock market maybe in 7-8 years. Then Series A and Series B equal ‘early stage.’ And everything later than that, we call ‘growth.’” — Jaap Vriesendorp
“[When] you’re generally looking at four to five hundred distinct companies, 10% of those companies generally drive most of the returns. You want to make sure that the company that drives the returns you are invested in with the manager where you size it appropriately relative to your overall fund of funds. So when we double click on our funds, the top 10 portfolio companies – not the funds, but portfolio companies, return sometimes multiples of our fund of funds.” — Aram Verdiyan
“If you’re overly concentrated, you better be damn good at your job ‘cause you just raised the bar too high.” — Beezer Clarkson
“[David Marquardt] said, ‘You know what? You’re a well-trained institutional investor. And your decision was precisely right and exactly wrong.’ And sometimes that happens. In this business, sometimes good decisions have bad outcomes and bad decisions have good outcomes.” — Chris Douvos
“Miller Motorcars doesn’t accept relative performance for least payments on your Lamborghini.” — Chris Douvos
“The biggest leverage on time you can get is identifying which questions are the need-to-haves versus nice-to-haves and knowing when enough work is enough.” — John Felix
“In venture, we don’t look at IRR at all because manipulating IRR is far too easy with the timing of capital calls, credit lines, and various other levers that can be pulled by the GP.” — Evan Finkel
“The average length of a VC fund is double that of a typical American marriage. So VC splits – divorce – is much more likely than getting hit by a bus.” — Raida Daouk
“Historically, if you look at the last 10 years of data, it would suggest that multiple [of the premium of a late stage valuation to seed stage valuation] should cover around 20-25 times. […] In 2021, that number hit 42 times. […] Last year, that number was around eight.” — Rick Zullo (circa 2024)
“The job and the role that goes most unseen by LPs and everybody outside of the firm is the role of the culture keeper.” — Ben Choi
“You can map out what your ideal process is, but it’s actually the depth of discussion that the internal team has with one another. […] You have to define what your vision for the firm is years out, in order to make sure that you’re setting those people up for success and that they have a runway and a growth path and that they feel empowered and they feel like they’re learning and they’re contributing as part of the brand. And so much of what happens there, it does tie back to culture […] There’s this amazing, amazing commercial that Michael Phelps did, […] and the tagline behind it was ‘It’s what you do in the dark that puts you in the light.’” — Lisa Cawley
“In venture, LPs are looking for GPs with loaded dice.” — Ben Choi
“If I hire someone, I don’t really want to hire right out of school. I want to hire someone with a little bit of professional experience. And I want someone who’s been yelled at. […] I don’t want to have to triple check work. I want to be able to build trust. Going and getting that professional experience somewhere, even if it’s at a startup or venture firm. Having someone have oversight on you and [push] you to do excellent work and [help] you understand why it matters… High quality output can help you gain so much trust.” — Jaclyn Freeman Hester
“LPs watch the movie, but don’t read the book.” — Ben Choi
“If it’s not documented, it’s not done.” — Lisa Cawley
“If somebody is so good that they can raise their own fund, that’s exactly who you want in your partnership. You want your partnership of equals that decide to get together, not just are so grateful to have a chance to be here, but they’re not that great.” — Ben Choi
“When you bring people in as partners, being generous around compensating them from funds they did not build can help create alignment because they’re not sitting there getting rich off of something that started five years ago and exits in ten years. So they’re kind of on an island because everybody else is in a different economic position and that can be very isolating.” — Jaclyn Freeman Hester
“Neutral references are worse than negative references.” — Kelli Fontaine
“Everybody uses year benchmarking, but that’s not the appropriate way to measure. We have one fund manager that takes five years to commit the capital to do initial investments versus a manager that does it all in a year. You’re gonna look very, very different. Ten years from now, 15 years from now, then you can start benchmarking against each other from that vintage.” — Kelli Fontaine
“We are not in the Monte Carlo simulation game at all; we’re basically an excel spreadsheet.” — Jeff Rinvelt
“A lot of those skills [to be a fund manager] are already baked in. The one that wasn’t baked in for a lot of these firms was the exit manager – the ones that help you sell. […] If you don’t have it, there should be somebody that it’s their job to look at exits. ” — Jeff Rinvelt
“Getting an LP is like pulling a weight with a string of thread. If you pull too hard, the string snaps. If you don’t pull hard enough, you don’t pull the weight at all. It’s this very careful balancing act of moving people along in a process.” — Dan Stolar
“Going to see accounts before budgets are set helps get your brand and your story in the mind of the budget setter. In the case of the US, budgets are set in January and July, depending on the fiscal year. In the case of Japan, budgets are set at the end of March, early April. To get into the budget for Tokyo, you gotta be working with the client in the fall to get them ready to do it for the next fiscal year. [For] Korea, the budgets are set in January, but they don’t really get executed on till the first of April. So there’s time in there where you can work on those things. The same thing is true with Europe. A lot of budgets are mid-year. So you develop some understanding of patterns. You need to give yourself, for better or worse if you’re raising money, two to three years of relationship-building with clients.” — David York
“Many pension plans, especially in America, put blinders on. ‘Don’t tell me what I’m paying my external managers. I really want to focus and make sure we’re not overpaying our internal people.’ And so then it becomes, you can’t ignore the external fees because the internal costs and external fees are related. If you pay great people internally, you can push back on the external fees. If you don’t pay great people internally, then you’re a price taker.” — Ashby Monk
“You need to realize that when the managers tell you that it’s only the net returns that matter. They’re really hoping you’ll just accept that as a logic that’s sound. What they’re hoping you don’t question them on is the difference between your gross return and your net return is an investment in their organization. And that is a capability that will compound in its value over time. And then they will wield that back against you and extract more fees from you, which is why the alternative investment industry in the world today is where most of the profits in the investment industry are captured and captured by GPs.” — Ashby Monk
“I often tell pensions you should pay people at the 49th percentile. So, just a bit less than average. So that the people going and working there also share the mission. They love the mission ‘cause that actually is, in my experience, the magic of the culture in these organizations that you don’t want to lose.” — Ashby Monk
“The thing about working with self-motivated people and driven people, on their worst day, they are pushing themselves very hard and your job is to reduce the stress in that conversation.” — Nakul Mandan
“I only put the regenerative part of a wealth pool into venture. […] That number – how much money you are putting into venture capital per year largely dictates which game you’re playing.” — Jay Rongjie Wang
“When investing in funds, you are investing in a blind pool of human potential.” — Adam Marchick
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.
Recently, I’ve had a lot of conversations with LPs and GPs on excellence. Can someone who has never seen and experienced excellence capable of recognizing it? The context here is that we’re seeing a lot of emerging managers come out of the woodwork. Many of which don’t come from the same classically celebrated institutions that the world is used to seeing. And even if they were, they were in a much later vintage. For instance, a Google employee who joined in 2024 is very different from a Google employee in 2003.
And there seem to be two schools of thought:
No. Only someone who is fortunate enough to be around excellent people in an excellent environment can recognize excellence in others. Because they know just how much one needs to do to get there. Excellence recognizes excellence. So there’s this defaulting to logos and brands that are known concentrations of excellence. Unicorns. Top institutions. Olympians. Delta Force. Green Beret. Three Michelin-starred restaurants.
Yes. But someone must constantly stretch their own definition of excellence and reset their standards each time they experience something more than their most excellent. The rose growing in concrete. The rate of iteration and growth matters for more. Or as Aram Verdiyan onceput it to me, “distance travelled.”
Quite possibly, a chicken and egg problem. Do excellent environments come first or people who are born excellent and subsequently create the environment around themselves?
It’s a question many investors try to answer. The lowest hanging fruit is the outsourcing of excellence recognition to know excellent institutions and known excellent investors. The ex-Sequoia spinout. Ex-KKR. Ex-Palantir. First engineer at Uber. Or hell, they’re backed by Benchmark. Or anchored by PRINCO.
It’s lazy thinking. The same is true for VC investors and LP investors. As emerging manager LPs (and pre-seed investors), we’re paid to do the work. Not paid to have others do the work for us. We’re paid to understand the first principles of excellent environments. To dig where no others are willing to dig.
To use an extreme example, a basketball court can make Kobe Bryant an A-player, but Thomas Keller look like a C-player. Similarly, a kitchen will make Thomas Keller an A-player, but Ariana Huffington a C-player. Environments matter.
When assessing environments and doing references, that’s something that you need to be aware of. What does the underlying environment need to have to make the person you’re diligencing an A-player? Is the game they have willingly chosen to play and knowledgeable enough to play have the optimal environment that will allow them to be an A-player? Is the institution they’re building themselves conducive to elicit the A out of the individual?
Ideally, is there evidence prior to the founding of their own firm that has allowed this player to shine? Why or why not?
Did they have a manager that pushed them to excel? Was there a culture that allowed them to shine? Were they given the trust and resources to thrive?
References
And so, that leads us to references. I want to preface with two comments first.
One, as an investor, you will NEVER get to 100% conviction on an investment. It’s one of the few superlatives I ever use. Yes, you will never. Unless you are the person themselves, you will never understand 100% about a person. And naturally, you will never get to 100% conviction because there will always be an asymmetry of information.
Two, so… your goal should not be to get to total symmetry of information, nor 100% conviction. Instead, your goal is to understand enough about an opportunity so that you can sufficiently de-risk the portfolio. What that means is that when you meet a fund manager (or a founder, for that matter) across 1-2 meetings, you write down all the risk factors you can think of about the investment. You can call it elephants in the room, or red or yellow flags. Tomato. Tomahto.
Then, rank them all. Yes, every single one. From most important to least important. Then, somewhere on that list — and yes, this is deeply subjective — you draw a line. A line that defines your comfort level with an investment. The minimum number of risks you can tolerate before making an investment decision. For some, say those investing in early stage venture or in Fund I or II managers, that minimum number will be pretty high. For others, those whose job is to stay rich, not get rich, that minimum tolerance will be quite low. And that’s okay.
There’s a great line my partner once told me. You like, because; you love, despite. In many ways, the art of investing in a risky asset class is understanding your tolerance. What are you willing to love, despite?
The purpose of diligence, thereinafter, is to de-risk as many of your outstanding questions till you are ready to pull the trigger.
In regards to references, before you go further in this blogpost, I would highly recommend Graham Duncan’s essay “What’s going on here, with this human?” My buddy, Sam, also a brilliant investor, was the person who first shared it with me. And I’m a firm believer that this essay should be in everyone’s reference starter pack. Whether you’re an LP diligencing GPs. Or a VC doing references on founders. Or a hiring manager looking to hire your next team member.
Okay, let’s get numbers out of the way. Depending on the volume of investments you have to make, the numbers will vary. The general consensus is that one or two is too little, especially if it’s a senior hire or a major investment. Kelli Fontaine’s40 reference calls may also be on the more extreme side of things. Anecdotally, it seems most investors I know make between five and ten reference calls. Again, not a hard nor fast rule.
That said, there is often no incentive for someone to tell a stranger bad things about someone who supported them for a long time. It’s why most LPs fail to get honest references because they haven’t established rapport and trust with a founder over time. Oftentimes, even in the moment. So, the general rule of thumb is that you need to keep making reference calls until you get a dissenting opinion. Sometimes, that’s the third call. Other times, is the 23rd call. If you’ve done all the reference calls, and you still haven’t heard from others why you shouldn’t invest, then you haven’t done enough (or done it right).
A self-proclaimed coffee snob once told me the best coffee shops are rated three out of five stars. “Barely any 2-4 stars. But a lot of 5-stars and a lot of 1-stars. The latter complaining about the baristas or owner being mean.” I’m not sure it’s the best analogy, but the way I think about references is I’m trying to get to the ultimate 3-star review. One that can highlight all the things that make that person great, but also understand the risks, the in’s and out’s, of working with said person.
For me, great references require trust and delivery.
Establishing trust and rapport. What you share with me will never find its way back to the person I am calling about.
Is the reference themselves legit? Is this person the best in the world at what they do?
How well does this reference know said person? Have they seen this person at both their highs and lows? At their best and at their worst.
The finer details, the possible risks, and how have they mitigated them in the past.
I will also note that off-list references are usually much more powerful than on-list references. Especially if they don’t know you’re doing diligence on the person you’re doing diligence on. But on-list references are useful to understand who the GP keeps around themselves. After all, you are the average of the people you hang out with most. As the one doing the reference checks, I try to get to a quick answer of whether I think the reference themselves is world-class or not.
While I don’t necessarily have a template or a default list of questions I ask every reference, I do have a few that I love revisiting to set the stage.
Also, the paradox of sharing the questions I ask is simply that I may never be able to use these questions again in the future. That said, references are defined by the follow-up questions. Rarely, if ever, on the initial question. There’s only so much you can glean from the pre-rehearsed version.
So, in good faith, here are a few:
Does the reference know them well?
If I told you this person was [X], how surprised would you be? Now there are two scenarios with what I say in [X]. The first is I pick a career that is the obvious “next step” if I were to only look at the resume. Oftentimes, if a person’s been an engineer their entire life, the next step would be being an engineering executive, rather than starting a fund. So, I often discount those who wouldn’t find it surprising. Those that say it is surprising, I ask why. The second scenario is where I pick a job that based on what I know about the GP in conversations is one I think best suits their skillset (that’s not running their own fund), and see how people react. The rationale as to why it’s surprising or not, again, is what’s interesting, not the initial “surprising/not surprising” answer itself.
If you were invited to this person’s wedding, which table do you think you’d be sitting at?
Have you ever met their spouse? How would you describe their spouse?
Understanding their strengths and weaknesses
Who’s the best person in the world at X? Pick a strength that you think the person you’re doing a reference on has. See what the reference says. Ask why the person they thought of first is the best person in the world at it. If the reference doesn’t mention the GP I’m diligencing, then I stop to consider why.
What are three adjectives you would use to describe your sibling? I’ve written about my rationale for this question before, so I won’t elaborate too much here. Simply, that when most people describe someone else, they describe the other person comparatively to themselves. If I say Sarah is smart, I believe Sarah is smarter than I am. Or… if I say Billy is curious, I believe Billy is more curious than I am.
If I said that this person joined a new company, knowing nothing about this new company, what would your first reaction be?
Congratulate this person on joining!
Do a quick Google or LinkedIn search about the company.
As an angel, consider investing in the company (again, knowing nothing else)
How would you rate this person with regards to X, out of 10? What would get this person to a 10? Out of curiosity, who’s a 10 in your mind?
If you were to hire someone under this person, what qualities would you look for?
If you were to reach out to this person, what do you typically reach out about?
I hate surprises. Is there something I should know now about this person so that I won’t be surprised later?
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.
“When investing in funds, you are investing in a blind pool of human potential.” – Adam Marchick
Over the past twenty years, Adam Marchick has had unique experiences as a founder, general partner (GP), and limited partner (LP). Most recently, Adam managed the venture capital portfolio at Emory’s endowment, a $2 billion portfolio within the $10 billion endowment. Prior to Emory, Adam spent ten years building two companies, the most recent being Alpine.AI, which was acquired by Headspace. Simultaneously, Adam was a Sequoia Scout and built an angel portfolio of over 25 companies. Adam was a direct investor at Menlo Ventures and Bain Capital Ventures, sourcing and supporting companies including Carbonite (IPO), Rent The Runway (IPO), Rapid7 (IPO), Archer (M&A), and AeroScout (M&A). He started his career in engineering and product roles at Facebook, Oracle, and startups.
[00:00] Intro [03:14] Who is Kathy Ku? [06:20] Lesson from Sheryl Sandberg [06:39] Lesson from Justin Osofsky [07:46] How Facebook became the proving grounds for Adam [09:26] The cultural pillars of great organizations [10:40] When to push forward and when to slow down [12:39] Adam’s first investment: Dell [14:20] What did Adam do on Day 1 when he first became an LP [17:00] Emory’s co-investment criteria [20:02] Private equity co-invests vs venture co-invests [21:15] Teaser into Akkadian’s strategy [23:03] Underwriting blind pools of human potential [29:03] Why does Adam look at 10 antiportfolio companies when doing diligence? [32:11] What excites and scares Adam about VC [35:36] Engineering serendipity [37:52] Where is voice technology going? [39:45] How does Adam think about maintaining relationships? [43:20] Thank you to Alchemist Accelerator for sponsoring! [44:20] If you enjoyed this season finale, it would mean a lot if you could share it with 1 other person who you think would love it!
“What’s so freeing is when you can bring your personality to work. It’s so much less cognitive load when you can be yourself.” – Sheryl Sandberg’s advice to Adam Marchick
“Take your work seriously, not yourself.” – Adam Marchick
“Be really transparent, and even document and share your co-investment criteria.” – Mike Dauber, Sunil Dhaliwal’s advice to Adam Marchick
“For an endowment doing co-invests, you should never squint.” – Adam Marchick
“When investing in funds, you are investing in a blind pool of human potential.” – Adam Marchick
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.
“The thing about working with self-motivated people and driven people, on their worst day, they are pushing themselves very hard and your job is to reduce the stress in that conversation.”
It’s something Nakul Mandan from Audacious said in a Superclusters episode earlier in Season 4. And a line that’s been gnawing at me for the past few weeks. Particularly, “your job is to reduce the stress in that conversation.” So it got me thinking… Are the entrepreneurs I back stressed (enough)?
I know what you’re thinking. But before you come at me with pitchforks and torches, here me out. If you get to the end of this essay and still feel as strongly, feel free to take a swing at me.
First off, let me define some terms in the above question. An “entrepreneur” is someone who starts something that doesn’t exist in the world already. To me, that is a startup founder, a local restaurant, an emerging fund manager, and so on. I use this term pretty liberally. “Enough” is in moderation. A balance of feeling the pressure and urgency, but not enough to make one go insane. By definition, entrepreneurs — people who dare challenge the world and create something that hasn’t existed before — are ambitious. And ambitious, action-oriented doers are, to Nakul’s point, often hard on themselves. So everything in moderation. As a friend once told me, if you’re doing anything ambitious, a third of your days will be epic. A third will be okay. And a third will absolutely suck. As long as your days feel like that proportionally, you’re on the right track.
So… are the entrepreneurs I back stressed (enough)?
Let’s start with no. Are they the underdog still, pre-product-market fit, stagnating, losing market share, and/or in a crisis?
If not, carry on. It’s okay to not be stressed all the time. In fact, it’s probably not helpful to be stressed all the time.
If so — that they are the underdogs, stagnating or in a crisis — AND they’re not feeling stressed, I do wonder from time to time. And I’d be lying if some part of me didn’t feel buyer’s remorse. Because that means one of three things:
They’ve lost their ability to care. About the product. The market. The team. Or simply, their own ambition. That’s the worst.
Conversely, they don’t feel comfortable enough to be vulnerable with me. And that, in part, not to sugarcoat things, is because of me.
They never cared enough or were ambitious enough in the first place. And that’s something I have to take back to the drawing board so that I learn the next time around.
Nevertheless, regardless of which of the three, it warrants a conversation. A difficult one. One where I try to understand their current motivations, what’s changed. If their motivations still hold true, then I, in Danny Meyer’s words, add “constant, gentle pressure.” For those curious, Chapter 9 of his book. Nevertheless, my job is to give them the activation energy to hopefully get them back on track.
If things change, great. I eventually go back to the first question. Are the entrepreneurs stressed? If not, then I let them on a few things:
I’ll spend less time time with them to prioritize the rest of my portfolio.
If they have any of the money left, they can keep the money. FYI, if it wasn’t my personal angel money, but someone else’s capital (of which I’m a fiduciary), depending on how much they have left, it may lead to a different conclusion. But in general, I view it as a write-off.
Wish them the best of luck in their next chapter.
If they feel the fire burning again (for good reason), they should let me know. And I’m happy to have another conversation.
Now… what happens if the entrepreneurs are stressed. Then I try to figure out if it’s anxiety or stress. Let me define.
Anxiety is caused by things you cannot control. For instance, the market. Other people you cannot control. Or black swan events. Stress, on the other hand, is caused by things you can control. Your own mistakes. Mistakes made by people you hired. Volume of work that needs to be done. Procrastination. Mistakes that can be actively mitigated. For instance, missing the deadline for a quarterly report. Missing payroll due to insufficient funds. Layoffs. Bad performance. Media, publicity, and perception. Something Danny Meyer calls, “writing a great last chapter.” As Danny Meyer puts it, “the worst mistake is not to figure out some way to end up in a better place after having made a mistake.”
If it’s anxiety, my role is to calm the founders. Be the mental support they need. Help them see the bigger picture. Build contingency plans.
If it’s stress, my role is to help them build an action plan. Help get key decision-makers and doers in the same room. Get the founders in front of advisors who can help them think through key considerations and check their blind side (assuming it’s not me. Most of the time it isn’t.). Of course, you need to timebox “thinking” time. There’s a great saying. “There are no right choices; only choices we make right.”
And finally, help the entrepreneurs execute the plan. Sometimes, that requires getting my hands dirty. And that’s what I’m here for. To increase the metabolism of the organization. Or at the very minimum, leadership. Stress is often caused by indigestion of tasks that need to be done.
Alas, the job of an investor, given we’re not in the driver’s seat, that we don’t always have complete information, is to reduce the stress of the founder when we have that conversation. More often than not, ambitious founders are hard enough on themselves.
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.
“The first layer is setting up your own strategy. The second layer is portfolio construction. How do you do your portfolio construction based on the strategy you set out to do? And then manager selection comes last. Within the portfolio construction target, how do you pick managers that fit that ‘mandate?’” – Jay Rongjie Wang
Jay Rongjie Wang is the founding Chief Investment Officer of Primitiva Global, where she runs a family-backed Multi-asset Strategy. She also works extensively with emerging VC managers, and sits on the Selection Committee of Bridge Funding Global.
Jay’s background uniquely combines software engineering (at the world’s largest fintech platform) and institutional investing (at top funds including Fidelity and Sequoia), as well as general management (3x executive in tech startups). Jay has lived in 5 different countries across 9 major cities, giving her a global perspective.
Jay obtained her B.A and M.Sci in Physics from Cambridge University and M.B.A from INSEAD. In 2023 she was listed as an Entrepreneurial Pioneer Under 35 by Hurun Wealth.
[00:00] Intro [04:12] Life atop a Daoist mountain [10:27] Qigong and tai chi [12:21] What is dao? [19:18] The weapon that Jay specializes in [21:08] Why did Jay leave the Daoist temple? [24:24] The motivations behind Jay’s career shifts [30:05] The difference between underwriting a VC fund and a fund-of-funds [33:08] How does Jay get to know a fund manager? [36:31] The 3-layer process for building an allocation strategy [38:01] Picking the initial asset class [45:29] How much Jay allocates to venture [48:43] What does “reasonably diversified” mean? [49:15] Figuring out the portfolio construction model [54:59] At what point do you stop maximizing for portfolio returns? [56:57] How Jay calculates a 200X target return on direct investments [57:53] Data on returns as a function of portfolio size [1:01:42] The biggest challenge once you’ve picked your strategy [1:04:40] Selecting the right fund managers [1:14:17] The difference between guqin and piano [1:18:42] Intuition versus discipline [1:24:08] Post-credit scene [1:27:47] Thank you to Alchemist Accelerator for sponsoring! [1:28:48] If you enjoyed this episode, it would mean a lot if you could share it with one friend who’d also get a kick out of this!
“If you have the deal flow and you have the energy and have the skills to construct your own portfolio, then funds-of-funds obviously are more complimentary than necessary.” – Jay Rongjie Wang
“The first layer is setting up your own strategy. The second layer is portfolio construction. How do you do your portfolio construction based on the strategy you set out to do? And then manager selection comes last. Within the portfolio construction target, how do you pick managers that fit that ‘mandate?’” – Jay Rongjie Wang
“The later the stage you go, […] capital becomes more anonymous, and […] the more you converge to public market returns.” – Jay Rongjie Wang
“I only put the regenerative part of a wealth pool into venture. […] That number – how much money you are putting into venture capital per year largely dictates which game you’re playing.” – Jay Rongjie Wang
“Your average median of a fund-of-funds is higher than a venture capital fund, and the variance, the standard deviation, is lower. So it is possible for a VC fund to have 40%, 50%, or higher IRR. It’s much, much less likely for a fund-of-funds to achieve that, but also the likelihood of losing money is much, much lower for a fund-of-funds.” – Jay Rongjie Wang
“The reason why we diversify is to improve return per unit of risk taken.” – Jay Rongjie Wang
“Bear in mind, every fund that you add to your portfolio, you’re reducing your upside as well. And that is something a lot of people don’t keep in mind.” – Jay Rongjie Wang
“Once you have a strategy, the hardest thing for me is to stick to that strategy because you just meet those amazing managers, amazing funds all the time.” – Jay Rongjie Wang
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.
Undeniably, one of the most insightful books I read this year has been Setting the Table by Danny Meyer. Someone I’ve been a long time fan of. If you’re no stranger to this humble blog, you’ll notice his cameos throughout previouspieces I’ve written. I am also remarkably late to the game. The book came out in 2008. And to this day, is as timeless as it was over a decade and a half back. Thank you, Rishi and Arpan for gifting me a copy.
That book has led to blogposts like this and this. To finally cold email him (yay, he replied! Danny, if you’re reading this, thank you for making my day, hell, and a good portion of my year!). New ways on how I support GPs. More intentional ways to hire. Inspired me to take on two more writing projects and a new podcast series in 2025 (don’t worry, Superclusters isn’t going anywhere, but expanding). And I’m sure it’s only the tip of the iceberg.
And as one last fanboy moment for Danny, there’s a line he has on page 220. A line the late and great Stanley Marcus of Neiman Marcus fame once told him. “The road to success is paved with mistakes well handled.” A line I haven’t stopped thinking about since I read it.
There’s a saying in the entrepreneurial world that it takes between 10 and 15 miracles for a startup to succeed. Each miracle is a trial by fire. A right of passage. A test of character. I’ve always believed that the job of an investor is not to be helpful all the time, or share celebrations on social media, or facilitate just connections. Despite having done many of the above myself, those are all, in my mind, table stakes. Rather, the job of an investor is to be there for at least one of those critical points of failure and to be extremely valuable. To help an entrepreneur handle their mistake well, to borrow Stanley Marcus’ line.
“If I hire someone, I don’t really want to hire right out of school. I want to hire someone with a little bit of professional experience. And I want someone who’s been yelled at.”
While it makes for a great clickbait title, the lesson extends further. One only gets yelled at by making a mistake. One learns not by making mistakes, but the public embarrassment of that mistake. If someone learn of the negative aftermath of a mistake, one won’t get the feedback mechanism necessary to grow from that experience. To analogize it to elementary math, if my afterschool teacher didn’t slap me with a ruler every time I got 9+8 wrong, it would have taken me a lot longer to learn that lesson. If no one catches you accidentally making an inconsistent calculation on the balance sheet, you may never learn from that mistake.
All that to say, someone who’s been yelled at made the mistake, received the feedback mechanism to improve, and learned to handle it better next time.
So, in my long preamble, and not to bury the lead, 2025 will be the year of big mistakes. Maybe. Hopefully, well handled. 2024 was the year of laying the groundwork. A lot of which were made explicit via this blog. I’m not saying I haven’t made any mistakes. Yes, I’ve left the toilet seat up. I should have asked for more concrete examples during certain podcast interviews. Almost forgot to file my annual tax extension. Forgot to mention a sponsor at an event (luckily my co-host had my back). Made the rookie intern mistake at work. Twice. Different things, but nevertheless twice. But those mistakes will be small compared to the ones I’ll make next year.
Nevertheless, here are the hallmarks of 2024!
2024’s Most Popular
Timeless Content for the Weary Investor — Our society spends quite a bit of time focusing on results, outputs, and success. All of which are lagging indicators of the blood, sweat and tears people put in. So instead, earlier this year, I thought it’d be interesting to compile a list of content that some of the most successful investors (LPs and VCs alike) consume. What goes in their information diet? What are the inputs? Some results may surprise!
The Science of Selling – Early DPI Benchmarks — With the economy outside of AI hitting a standstill and hitting record low numbers in terms of liquidity, I’ve found a constant stream of new readers via this blogpost. Many of which I imagine to be fiduciaries and capital allocators. I do hope that one day there is more content on selling and exiting positions in a liquidity-constrained environment though. Although, I may just put out a blogpost on secondaries in the new year, inspired by a number of conversations I’ve had this year already.
How to Break into VC in 2024 — It may be obvious by now that there’s no one set path to get into venture. I’ve worked with colleagues who ranged in majors from history to food science to economics to computer engineering. Additionally, those who have been a founder, a banker, a consultant, a product manager, an artist, an athlete, an actress, a public relations specialist, and the list goes on. But if you were looking for the closest thing to a silver bullet, maybe this essay would be a great place to start.
Five Tactical Lessons After Hosting 100+ Fireside Chats — Surprisingly, this has stayed as a perennial blogpost. I realize even now looking back, how much I’ve learned since, but nevertheless a good starting point for those who want to interview others.
The Non-Obvious Emerging LP Playbook — The first blogpost I wrote on the topic of being an LP. Still my longest one to date. Since then, I’ve learned an LP comes by many a name. Capital allocator. Asset owner. And more specifically, the difference between multi-family offices and single family offices. Family businesses. Access versus asset class LPs. And more.
Non-obvious Hiring Questions I’ve Fallen in Love with — I’ve been lucky enough to spend quite a bit of time around talent magnets this year. And in the surplus of applications, they’re forced to quickly differentiate signal from noise. And these are some of the questions I’ve heard them use. And well, have also used myself when hiring these past two years.
All-Time Most Popular
This list hasn’t changed much this year. One can say I have yet to outdo myself. Which may be true. I admittedly, also haven’t shared these blogposts much on Twitter. In fact, over 70% of this year’s posts never touched LinkedIn or Twitter. When in the past, I invested a bit more time in expanding to new audiences. For any essay that did go a little viral this year, it was because of you, my readers. So thank you!
This year was the year of LP content. Also, the year where I stopped using as many headers in my blogposts. Interestingly enough. It wasn’t any conscious decision, but at some point I just slowed my pace down. Excluding this blogpost and a few others. I wonder if I’ll use less next year.
So, to share them chronologically, here are some of my personal favorites:
The Proliferation of LP Podcasts — I wrote this back in March at the beginning of Season 2 of Superclusters, and I still stand by this today. At the beginning of every content adoption curve, the question is: WHERE can I find this content? But as the content becomes fully adopted, in this case around being a capital allocator, the question will become: WHO do I want to / choose to listen to?
From Demo Day to First Meeting: My Demo Day Checklist — There are times we have to make fast decisions when faced with a volume of options. Going to Demo Days and choosing who to follow up with is just one of such cases. I’m happy this year I’ve codified that practice when going to VC accelerator Demo Days. And I imagine it’s only a matter of time, before we’re faced with the volume of YC Demo Days, but for funds.
The Power Law of Questions — As I’ve grown as an LP, I find myself being a lot more intentional with questions I ask fund managers. This blogpost serves as a record of questions I found myself asking quite often this year.
Emerging Manager Products versus Features — In the startup world, the concept of products and features have become quite prevalent. One is a standalone business. The other is more of a subclause than a clause, incapable of being a product offering in of and itself. As I spend time thinking about an asset class, where the simplest, and likely, most facetious way of describing it, is we sell money, this blogpost serves as “value-adds” that deserve their own fund versus ones that should be built within a larger shop.
Shoe Shopping — One of my posts where the title almost has nothing to do with the blogpost itself. But an observation of what differentiates VC funds beyond what they pitch the public.
! > ? > , > . — Another one of those blogposts where it’s hard to guess what it’s about from the title itself. Likely my worst essay title to date. Or best? A product of my gripe that most people don’t know how to ask for feedback. And good news! Some readers of this blog have reached out since asking for more directed feedback.
Three E’s of Fund Discipline — A lot of GPs focus on entry discipline. A lot of LPs in 2024 focus on exit discipline. Both are equally as important, but both often forget about the third kind of fund discipline. Executional discipline. I give examples of each in this essay, which hopefully can help as a reminder for what is needed out of a great fund manager. A separate job description from just being a good investor. In fact, you can be the latter without ever needing to raise or manage your own fund, and still make the Midas List.
Anecdotal Telltale Signs of Exceptionalism — One of the blogposts I imagine will continuously be updated. As even in 2025, I’m making edits to this one. This, at the end of the day, may just sit as an easter egg hidden in the deep corners of this blog. But for me, it will be a public log of things I’ve noticed, things I like, and things that I’ve seen work well for really exceptional people I get to meet and be friends with.
With that, 2024 comes to a close. See you all in the new year!
4/12/2025 Edit: Added in Anecdotal Telltale Signs of Exceptionalism as one of 2024’s most memorable blogposts. One of the few blogposts that is likely to be dynamic, as opposed to static.
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.
“Diversification is your one free lunch.” – Charissa Lai
Charissa has experience in Investing, Strategy and Relationship Management across Private Equity and Investment Banking. She’s gained global perspective from having worked and lived in South Africa, England, Canada, China and the USA. Her expertise includes selecting fund managers and co-investments, developing alternatives strategies and building relationships. She’s a recipient of 2016 Women in Capital Markets Emerging Leaders Award with CPPIB. She serves as a Board Director at the Toronto Humane Society.
Charissa holds an MBA from Northwestern University and an HBSc. from University of Toronto.
[00:00] Intro [03:51] When Charissa first met the Dalai Lama [07:08] Charissa’s early career [08:02] Charissa’s rejection from her dream job [11:01] Why did Charissa switch from computer science to investment banking [12:16] How Charissa became an LP [14:24] Pinch-me moments for Charissa [16:04] Building the investment process for a $70B pension fund [18:37] The duration of partner roles is quite telling [20:58] Assessing buyout track records [25:01] Buyout loss ratios [26:36] When buyouts and VC are getting more and more similar [28:19] The value of vintage diversification [32:51] How Charissa thinks about personal portfolio allocation [40:22] The one VC fund that Charissa invested in [42:53] Charissa’s beer can chicken [47:13] What memory does Charissa cherish? [49:26] Post-credit scene [54:38] Thank you Alchemist Accelerator for sponsoring! [55:39] If you enjoyed this episode, a like, comment, or share would mean the world!
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.