John Felix is the Head of Emerging Managers at Allocate where he leads manager diligence and product innovation within the emerging manager ecosystem. Prior to joining Allocate, John worked at Bowdoin College’s Office of Investments, helping to invest the $2.8 billion endowment across all asset classes, focusing on venture capital. Prior to Bowdoin, John worked at Edgehill Endowment Partners, a $2 billion boutique OCIO. At Edgehill, John was responsible for building out the firm’s venture capital portfolio, sourcing and leading all venture fund commitments. John started his career at Washington University’s Investment Management Company as a member of the small investment team responsible for managing the university’s now $15 billion endowment. John graduated from Washington University in St. Louis with a BSBA in Finance and Entrepreneurship.
[00:00] Intro [02:35] The band that started it all [08:43] How did a band of 3 become a band of 5? [10:39] What bands served as inspiration for John? [13:37] Lessons on building teams and trust [19:48] The mischance that led John into the endowment world [22:34] What John learned under 3 different CIOs [26:20] What does concentration mean for Washington University’s endowment? [33:53] Portfolio construction perspectives at an endowment [36:26] The flaws of GP commits [41:25] How has John’s approach to emerging managers changed over the years? [44:17] What is key person risk? [47:06] One of the biggest challenges emerging managers face [50:45] Balancing over- and under-diligencing an emerging manager [56:28] What are traits that GPs think are unique but actually aren’t? [1:03:36] What makes a great cold email? [1:08:40] As a sports fan, do the highs or lows hit harder? [1:11:53] Thank you to Alchemist Accelerator for sponsoring! [1:12:54] Let me know if you enjoyed this episode with a like, comment or share!
“Being too dogmatic about things or having too black or white views will prohibit a lot of LPs from making really, really good investments.” – John Felix
“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
Recently I’ve been hearing a lot of power law this, power law that. And you guessed right, that’s VC and LP talk. Definitely not founder vocabulary. Simply, that 20% of inputs lead to 80% of outputs. For instance, 20% of investments yield 80% of the returns.
Along a similar vein… what about questions? What 20% of questions lead to 80% of answers you need to make a decision? Or help you get 80% of the way to conviction in a deal?
‘Cause really, every question after those delivers only marginal and diminishing returns. And too much so, then you end up just wasting the founder’s or GP’s time. As the late Don Valentineonce said, “[VC] is all about figuring out which questions are the right questions to ask, and since we don’t have a clue what the right answer is, we’re very interested in the process by which the entrepreneur get to the conclusion that he offers.”
While I can’t speak for everyone, here are the questions that help me get to 80% conviction. For emerging GPs.
I’m going to exclude “What is your fund strategy?” Because you should have either asked this at the beginning or found out before the meeting. This question informs if you should even take the meeting in the first place. Is it a fit for what you’re looking for or not? There, as one would expect, you’d be looking into fund size, vertical, portfolio size, and stage largely. Simple, but necessary. At least to not waste anyone’s time from the get go.
Where are you at as a GP by Fund III? What does Fund I and II look like by Fund III?
Discipline. In the first 4 years of a fund, you’re evaluated on nothing else except for the discipline and the prepared mind that you have going in. All the small and early DPI and TVPI mean close to nothing. And it’s far too early for a GP to fall into their respective quartile. In other words, Fund I is selling that promise. The prepared mind. Fund II is selling Fund I’s strategy and discipline. Fund III, you’re selling the returns on Fund I.
Vision. Is this GP thinking about institutionalizing a firm versus just a fund? How are they thinking about creating processes and repeatability into their model? How do they think about succession and talent? And sometimes I go a few steps further. What does Fund V look like? And what does the steady state of your fund strategy look like?
What value do you bring to your portfolio companies?
This is going to help with reference calls and for you to fact check if an investor actually brings that kind of value to their portfolio companies. So, in effect, the question to portfolio companies would be: How has X investor helped you in your journey?
On the flip side, even during those reference calls, I like asking: Would you take their check if they doubled their ownership? And for me to figure out how high can they take their ownership in a company before the check is no longer worth it. There are some investors who are phenomenal $250K pre-seed/seed checks for 2.5-5% ownership (other times less), but not worth their value for $2-3M checks for the same stages. To me, that’s indicative of where the market thinks GP-market fit is at.
I also love the line of questioning that Eric Bahn once taught me. “How would you rate this GP on a scale of 1 to 10?” Oftentimes, founders will give them a rating of 6, 7, 8, or if you’re lucky 9. And the follow up question then becomes, “What would get this investor to a 10?” And that’s where meaty parts are.
Of course, it’s important to do this exercise a few times, especially with the top performers in their portfolio to truly have a decent benchmark. And the ones that didn’t do so well. After all, our brand is made by our winners. And our reputation is made by those that didn’t.
In the trifecta of sourcing, picking, and winning, this is how GPs win deals.
How do you resolve conflict or disagreement in the partnership?
This is really prescient in a partnership. Same as a co-foundership. If someone says, we never disagree, I’m running fast in the other direction. Everyone disagrees and has conflicts. Even twins and best friends do. If you don’t, you either have been sweeping things under the rug or one (or both or all) of you doesn’t care enough to give a shit. Because if you give a damn, you’re gonna have opinions. And not all humans have the same opinions. If everyone does, realistically, we only need one of you.
Hell, Jaclyn Freeman Hester even goes a step further and asks, How would you fire your partner?
Jaclyn on firing partners and team risk
Personally I think that last question yields interesting results and thought exercises, but lower on my totem pole (or higher if you want to be culturally accurate) of questions I need answers to in the initial meetings.
How are you finding companies? How are you building your pipeline?
This is always a question I get to, but especially valuable, when I ask it to spinouts. Building a repeatable and scalable sourcing pipeline is one of the cruxes of being a great fund manager. But in the age when a lot of LPs are shifting their focus to spinouts from top-tier funds, it’s an important reminder that (a) not all spinouts are created equal, and (b) most often, I find spinouts who rely largely on their existing “brand” and “network” without being able to quantify the pillars of it and how it’s repeatable.
For (a), a GP spinning out is evaluated differently than a partner or a junior investment member. A GP is one who manages the LP relationships, and knows intimately the value of what goes in an LPA, on top of her/his investing prowess. And the further you go down the food chain, the less visibility one gets of the end to end process. In many ways, the associates and analysts spinning out need the most help, but are also most willing to hustle.
Which brings me to (b). Most spinouts rely on the infrastructure and brand of their previous firm, and once they’ve left, they lose that brand within a year’s time. Meaning if they don’t find a way or have an existing way to continue to build deal flow, oftentimes, they’ll be left with the leftovers on the venture table. This question, for me, gives me a sense of whether an investor is a lean-in investor or a lean-back investor. The devil’s in the details.
What are the top 3 reasons I shouldn’t invest?
This is a test to see how much self-awareness a founder/GP has. The most dangerous answer is saying “There are no reasons not to invest.” There are always reasons not to. The question is, are you aware of them? And can you prioritize which risks to de-risk first?
In many ways, I think pitching a Fund I as illustrating the minimum viable assumption you need to get to the minimum viable product. And Fund II is getting to the minimum lovable strategy (by founders and other investors in the ecosystem). And with anything that is minimally viable, there are a bunch of holes in it.
Another way to say the above is also, “If halfway through the fund we realize the fund isn’t working, what is the most likely reason why?”
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.
Beezer Clarkson leads Sapphire Partners‘ investments in venture funds domestically and internationally. Beezer began her career in financial services over 20 years ago at Morgan Stanley in its global infrastructure group. Since, she has held various direct and indirect venture investment roles, as well as operational roles in software business development at Hewlett Packard. Prior to joining Sapphire in 2012, Beezer managed the day-to-day operations of the Draper Fisher Jurvetson Global Network, which then had $7 billion under management across 16 venture funds worldwide.
In 2016, Beezer led the launch of OpenLP, an effort to help foster greater understanding in the entrepreneur-to-LP tech ecosystem. Beezer earned a bachelor’s in government from Wesleyan University, where she served on the board of trustees and currently serves as an advisor to the Wesleyan Endowment Investment Committee. She is currently serving on the board of the NVCA and holds an MBA from Harvard Business School.
Chris Douvos founded Ahoy Capital in 2018 to build an intentionally right-sized firm that could pursue investment excellence while prizing a spirit of partnership with all of its constituencies. A pioneering investor in the micro-VC movement, Chris has been a fixture in venture capital for nearly two decades. Prior to Ahoy Capital, Chris spearheaded investment efforts at Venture Investment Associates, and The Investment Fund for Foundations. He learned the craft of illiquid investing at Princeton University’s endowment. Chris earned his B.A. with Distinction from Yale College in 1994 and an M.B.A. from Yale School of Management in 2001.
You can find Chris and Beezer on their socials here.
[00:00] Intro [03:07] Beezer’s childhood dream [04:29] How Chris was let go from his $4.15 job at Yale [08:09] Concentrated vs diversified portfolios [09:30] First fund that Beezer and Chris invested [11:42] Funds that CD and Beezer passed on and regret [16:07] Favorite term in the LPA? Or not? [19:18] What piece of advice did a GP in their portfolio share with them? [23:15] What’s something that Beezer/CD said to a GP that they regret saying? [28:06] What’s the most interesting fund model they’ve seen to date? [33:20] What fund invested in 2020-2021 inflated valuations that they’ve reupped on? [40:18] Events that they went to once but never again [44:24] Life lessons from CD & Beezer [54:02] The founding story of Open LP [55:02] Thank you to Alchemist Accelerator for sponsoring! [57:58] If you learned something new in this episode, it would mean a lot if you could drop a like, comment or share it with your friends!
Tom Landry (who’s actually the correct attribution for the quote: “A coach is someone who tells you what you don’t want to hear, who has you see what you don’t want to see, so you can be who you have always known you could be.”)
“If you’re overly concentrated, you better be damn good at your job ‘cause you just raised the bar too high.” – Beezer Clarkson
“Conviction drives concentration, and that you should be so concentrated as to be uncomfortable because otherwise you’re de-worsified, not diversified.” – Chris Douvos
“[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
“Sometimes I treat GPs like I treat my teenage children which is: Every word out of a teenager’s mouth is probably a lie designed to make them look better or to hide some malfeasance.” – Chris Douvos
“May we be blessed by a weak benchmark.” – David Swensen
“Miller Motorcars doesn’t accept relative performance for least payments on your Lamborghini.” – Chris Douvos (citing hedge fund managers)
“At the end of the day, the return on an asset is a function of the price you paid for it and the capital it consumes.” – Chris Douvos
Jaclyn Freeman Hester is a Partner at Foundry. She joined in 2016 with a passion for supporting the next generation of entrepreneurs and investors. Jaclyn leads direct investments in early-stage companies, often collaborating with Foundry’s partner funds. She loves working closely with founders to solve hard problems and think about the human elements of business. She invests across B2B and consumer companies that exhibit strong end-user empathy and use technology to empower individuals, unlock potential, and improve experiences.
Jaclyn helped launch Foundry’s partner fund strategy, building the portfolio to nearly 50 managers. Bringing her unique GP + LP perspective, Jaclyn has become a go-to sounding board for emerging VCs.
Jaclyn first fell in love with entrepreneurship while earning her JD/MBA at CU Boulder (Go Buffs!). There, she served as Executive Director of Startup Colorado, where she got to know Foundry and the incredible Boulder/Denver startup community the firm helped catalyze. In her brief stint as a practicing attorney, Jaclyn advised clients in M&A transactions and early-stage financings. She also witnessed the founder journey first-hand, working closely with her husband and his family as they built a B2B SaaS company, FareHarbor (acquired by BKNG).
Jaclyn loves the Boulder lifestyle, but her heart will always be on the East Coast, having grown up a New England “beach kid.” She is the proud mother of three humans and three dogs and is a blue-groomer-on-a-sunny-day skier and 9-hole golfer. In her glimpses of free time, you can find Jaclyn enjoying live music, especially at Red Rocks and in Telluride, two of the most magical places in the world.
[00:00] Intro [03:24] The significance of Kara Nortman in Jaclyn’s life [13:59] Lesson on recognizing effort from Dan Scheinman, Board Member at Zoom [18:27] The question to disarm GPs learned from Jonathon Triest at Ludlow Ventures [23:37] The differences between being a board member and an LPAC member [32:04] Turnover within institutional LPs [33:58] The telltale signs of team risk in a partnership [41:25] How to answer “How do you fire your partner?” [44:05] Foundry’s portfolio construction [53:22] What makes Lan Xuezhao at Basis Set so special? [59:59] What does Shark Tank get right about venture? [1:03:37] Jaclyn’s Gorilla Glue story [1:05:51] What keeps Jaclyn humble today? [1:12:11] What will Jaclyn do after Foundry’s last fund? [1:16:28] Jaclyn’s closing thought for LPs [1:18:10] Thank you to Alchemist Accelerator for sponsoring! [1:20:46] If you enjoyed this episode, a like, a comment, a share will go a long way!
Ertan Can is the Founder of Multiple Capital, a fund of funds focused on investing in micro VC funds in Europe and has been a limited partner in top funds you’ve heard of including Entrepreneur First and Angular Ventures, just to name a few. He’s done his tour of duty in the asset management world at JP Morgan to covering investor relations topics at Thomson Reuters to investing in startups at a family office. Ertan is also a founding member of 2hearts, a community dedicated to building tomorrow’s tech society with cultural diversity.
He is also a proud MBA graduate from the ESCP Business School and a long time student of finance and law catalyzed by his time at Frankfurt and London.
[00:00] Intro [02:21] Ertan’s childhood [05:36] Why Luxembourg? [15:03] Which countries do European GPs set up their funds? [19:46] How did Ertan switch the family office strategy from direct to fund investing? [24:42] How has Ertan’s underwriting process evolved over time? [28:04] Do similar pitch deck formats make it easier or harder to make investment decisions? [30:34] Referrals and warm intros ranked by source [36:10] Geographies that Multiple Capital invests in [37:44] Red flags for Multiple Capital [43:48] How do solo GPs build sounding boards to check their blindside? [49:04] The (un)predictability of outlier investments [1:00:41] How does Ertan think about bringing on Venture Partners in a fund of funds? [1:08:25] The decision-making framework behind an “angel” LP investment and a FoF check [1:12:01] Where Ertan shares his unfiltered thoughts [1:20:14] Ertan’s experience around giving GPs feedback [1:27:05] Cockroaches and superheroes [1:34:08] Thank you to Alchemist Accelerator for sponsoring! [1:36:44] If you enjoyed this episode, it would mean the world to us if you gave us a like, comment, or share!
“Our work is to increase the probability of having some of the outliers as early as possible in as small as possible funds because like a fund, that will lead to a power law in our portfolio.” – Ertan Can
Aram Verdiyan is a Partner at Accolade. Previously, he worked on the investment team at Andreessen Horowitz. Before that, Aram worked in BD, sales and marketing at Aviatrix, a cloud native enterprise software company. Aram worked at Accolade from 2012 to 2015 as a Senior Investment Associate and at Deloitte Consulting LLP. He holds an M.B.A from the Stanford Graduate School of Business (GSB) and a B.S. from the George Washington University.
[00:00] Intro [02:36] How did Pejman Nozad influence the way Aram thinks about people [04:06] Aram’s ‘distance traveled’ [05:45] What did imposter syndrome look like in Aram’s life? [06:36] How Aram cold emailed his way into Accolade Partners [09:03] The first case study Aram did at Accolade [10:10] When track record is NOT just TVPI, DPI, or IRR [15:05] The case for concentrated fund of funds’ portfolio construction [22:42] Telltale signs of “great” deal flow [26:32] When does due diligence start for prospective funds for Accolade? [27:50] Primary sources of data for Accolade [29:00] The variables that impact fund of funds’ team size [30:24] How many fund investments should each individual FoF partner have? [35:13] The case for consistent check sizes [36:20] The common mistake GPs make when it comes to LP concentration limits [41:27] How Accolade started investing in blockchain funds [44:52] Blockchain engineering talent as a function of bear markets [47:15] Time horizons for blockchain funds [50:38] Luck vs skill [53:41] Aram’s early fundraising days at Accolade [57:38] Thank you to Alchemist Accelerator for sponsoring! [1:00:14] If you enjoyed the episode, drop us a like, comment or share!
“[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
“We don’t have varying levels of conviction.” – Aram Verdiyan
Jaap Vriesendorp is one of the managing partners of Marktlink Capital, an investment manager from the Netherlands investing over $1b into private equity and venture capital funds. Marktlink Capital’s LPs are almost exclusively Dutch (tech) entrepreneurs from companies such as Booking.com, Adyen and Hellofresh. At Marktlink Capital Jaap focusses on selecting venture and growth funds across Europe and the US. Before Marktlink Capital, he spent the majority of his time at McKinsey where he was one of the leaders of McKinsey’s practice for Venture Capital, Unicorns & Startups in Europe. Besides work, Jaap enjoys sports, mountains, technology, comic books, music and art.
He holds an MBA from INSEAD and is a guest lecturer at the Rotterdam School of Management (Erasmus University). He occasionally shares his views on private market investing on Medium.
[00:00] Intro [03:04] The significance of Mount Pinatubo in Jaap’s life [06:23] One Shell Jackets [08:45] The entrepreneurial gene in the Vriesendorp family that dates back to Jaap’s grandfather [14:32] The 1-year time constraint of starting Welt Ventures [17:43] What did the transition to becoming an investor look like for Jaap [20:28] The 3 traits that define a community [24:03] How often does Jaap host events? [25:30] How does Marktlink Capital have 1000 LPs? [27:15] What was Marktlink’s pitch to their LPs? [28:32] What is the typical individual LP’s allocation model to VC/PE? [29:41] Why is VC/PE uncorrelated to the public markets? [35:10] The 3 facts that define Welt Ventures’ portfolio construction model [38:28] Exit windows matter more than entry windows [42:15] Diversification in PE = Concentration in VC [47:42] 3 types of emerging GPs that deliver alpha [49:35] Which European fund has a really unique thesis? [51:44] Which school did Jaap apply to but not get in? [53:55] Thank you to Alchemist Accelerator for sponsoring! [56:31] If anything resonated with you in today’s episode, we’d be honored to earn a like, comment, or share!
“We set out to achieve three things with the community:
We wanted people to have fun with each other. And when entrepreneurs meet entrepreneurs, good stuff happens even if you don’t bring any content.
We wanted to bring the absolute best type of propositions. So in terms of sales, it means sales almost without being sales where you offer something that people really want.
Organized knowledge in a way that nobody does.” – Jaap Vriesendorp
“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
Peter Teneriello has been a career-long investor in the private markets. He has experience as an allocator across a range of institutional types, from wealth management firms to pensions and endowments, and helped launch the venture capital program for the Texas Municipal Retirement System. Other past experiences of his have included leading finance/operations for a venture-backed startup, in addition to vetting investments for a family office and working with their portfolio companies. Over the years he has also written about his investing experience on Medium and Substack.
He is a graduate of the University of Notre Dame as well as the Kauffman Fellows Program, an executive education program focused on venture capital and innovation leadership. He wears many hats.
[00:00] Intro [03:57] The origin of Peter’s nickname [05:16] How was boxing formative to who Peter is today? [07:25] The art of the first conversation with a GP [11:46] How did TMRS deploy $1B into VC and PE annually? [19:45] Looking at the underlying portfolio of companies [24:06] How overlap in venture portfolios affect re-up decisions [26:55] Marks from an LP perspective [30:52] Qualitative vs quantitative information [34:45] Signal vs noise in the private markets [40:46] When Peter shaved his head in front of an entire lecture hall [45:09] The most recent update to the Peter OS [51:17] Thank you to Alchemist Accelerator for sponsoring! [53:53] If you enjoyed the episode, consider dropping a like, comment or share as it really helps me create content that is interesting to you
“Don’t overweight the quantitative over the qualitative.” – Peter Teneriello
“It’s not to be in the consensus out of a misguided sense of self-preservation; it’s approaching your life’s work with creativity and conviction and treating it like the art that it is.” – Peter Teneriello
Last week, Youngrok and I finally launched our episode together on Superclusters. In the midst of it all, we wrestle with the balance between the complexity and simplicity of questions to get our desired answer. Of course, we made many an allusion to the DGQ series. One of which, you’ll find below.
In many ways, I started the DGQ series as a promise to myself to uncover the questions that yield the most fascinating answers. Questions that unearth answers “hidden in plain sight”. Those that help us read between the lines.
Superclusters, in many ways, is my conduit to not only interview some of my favorite people in the LP landscape, but also the opportunity to ask the perfect question to each guest. Which you’ll see in some of the below examples.
Asking Abe Finkelstein about being a Pitfall Explorer and how it relates to patience (1:04:56 in S2E1)
What Ben Choi’s childhood was like (2:44 in S1E6) and how proposing to his wife affects how he thinks about pitching (1:05:47 in S1E6)
How selling baseball cards as a kid helped Samir Kaji get better at sales (45:05 in S1E8)
In doing so, I sometimes lose myself in the nuance. And in those times, which happen more often than I’d like to admit, the questions that yield the best answers are the simplest ones. No added flare. No research-flexing moments. Where I don’t lead the witness. And I just ask the question. In its simplest form.
For the purpose of this essay, to make this more concrete, let’s focus on a question LPs often ask GPs.
“Tell me about this investment you made.“
In my mind, ridiculously simple question. Younger me would call that a lazy question. In all fairness, it would be if one was not intentionally aware about the kind of answer they were looking to hear OR not hear.
The laziness comes from regressing to the template, the model, the ‘what.’ But not the ‘why’ the question is being asked, and ‘how’ it should be interpreted. For those who struggle to understand the first principles of actions and questions, I’d highly recommend reading Simon Sinek’s Start with Why, but I digress.
Circling back, every GP talks about their portfolio founders differently. If two independent thinkers have both invested Company A, they might have different answers. Won’t always be true, but if you look at two portfolios that are relatively correlated in their underlying assets AND they arrive at those answers in the same way, one does wonder if it’s worth diversifying to other managers with different theses and/or approaches.
But that’s exactly what makes this simple question (but if you want to debate semantics, statement) special. When all else is equal, VCs are left to their own devices unbounded from artificial parameters.
Then take that answer and compare and contrast it to how other GPs you know well or have invested in already. How do they answer the same question for the exact same investment? How much are those answers correlated?
It matters less that the facts are the same. Albeit, useful to know how each investor does their own homework pre- and post-investment. But more so, it’s a question on thoughtfulness. How well does each investor really know their investments? How does it compare to the answer of a GP I admire for their thoughtfulness and intentionality?
(Part of the big reason I don’t like investing in syndicates because most outsource their decision-making to larger logos in VCs. On top of that, most syndicate memos are rather paltry when it comes to information.)
The question itself is also a test of observation and self-awareness. How well do you really know the founder? Were you intentional with how you built that relationship with the founder? How does it compare to the founder’s own self-reflection? It’s also the same reason I love Doug Leone’s question, which highlights how aware one is of the people around them. What three adjectives would you use to describe your sibling?
Warren Buffett once described Charlie Munger as “the best thirty-second mind in the world. He goes from A to Z in one go. He sees the essence of everything even before you finish the sentence.” Moreover in his 2023 Berkshire annual letter, he wrote one of the most thoughtful homages ever written.
As early-stage investors, as belief checks, as people who bet on the nonobvious before it becomes obvious, we invest in extraordinary companies. I really like the way Chris Paikdescribes what we do. “Invest in companies that can’t be described in a single sentence.”
Invest in companies that can’t be described in a single sentence
And just like there are certain companies that can’t be described in a single sentence — not the Uber for X, or the Google for Y — their founders who are even more complex than a business idea cannot be described by a single sentence either. Many GPs I come across often reduce a founder’s brilliance to the logos on their resume or the diplomas hanging on their walls. But if we bet right, the founders are a lot more than just that.
Of course, the same applies to LPs who describe the GPs they invest in.
In hopes this would be helpful to you, personally some areas I find fascinating in founders and emerging GPs and, hell just in, people in general include:
Their selfish motivations (the less glamorous ones) — Why do this when they can be literally doing anything else? Many of which can help them get rich faster.
What part of their past are they running towards and what are they running away from?
All the product pivots (thesis pivots) to date and why. I love inflection points.
If they were to do a TED talk on a subject that’s not what they’re currently building, what would it be?
Who do they admire? Who are their mentor figures?
What kind of content do they consume? How do they think about their information diet?
What promises have they made to themselves? No matter how small or big. Which have they kept? Which have they not?
How do they think about mentoring/training/upskilling the next generation of talent at their company/firm?
The DGQ series is a series dedicated to my process of question discovery and execution. When curiosity is the why, DGQ is the how. It’s an inside scoop of what goes on in my noggin’. My hope is that it offers some illumination to you, my readers, so you can tackle the world and build relationships with my best tools at your disposal. It also happens to stand for damn good questions, or dumb and garbled questions. I’ll let you decide which it falls under.
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.
Winter Mead is the Founder and Managing Member of the investment firm Coolwater Capital, which exclusively focuses on emerging managers and technology investments. Coolwater is an academy for training, building and scaling emerging managers, a curated community of VC investors and early-stage investment specialists, and an investment firm. Coolwater has helped launch over 175 emerging managers, establishing strong ties and trust with these managers, who form the foundation of the Coolwater community. Winter is also the author of “How To Raise A Venture Capital Fund”.
Prior to Coolwater, he played a key role in an evergreen investment fund at SAP, co-founded the LP transparency movement called #OpenLP, and served on the committee for the Institutional Limited Partners Association (ILPA), which sets the standards for the private equity industry. Winter’s extensive experience includes private equity and venture capital roles in San Francisco, institutional fund investments, direct technology investments, and angel investing.
He also served as junior faculty at Stanford Graduate School of Business, holding degrees from the University of Oxford and Harvard University, and now resides in Utah with his family, passionately solving business challenges.
[00:00] Intro [03:14] Why Winter biked across Spain with a flask of maple syrup in his back pocket [05:55] How did Amy Lichorat change Winter’s career? [07:15] How did Winter get into Hall Capital Partners? [10:34] What makes Hall Capital Partners special? [13:49] How office design affects the team’s ability to learn [23:49] The value of living in the Bay Area [27:17] Where to meet founders and VCs in the Bay Area [33:35] Institutional checks vs angel checks [38:58] Two of Winter’s decision-making frameworks for angel investments [41:58] How to build an LP investment thesis [52:53] The interplay of fear and diligence [59:44] Two rookie mistakes that emerging LPs make [1:05:34] The chip on Winter’s shoulder [1:09:03] Thank you to Alchemist Accelerator for sponsoring! [1:11:39] If you enjoyed this episode, consider subscribing and/or sharing!
