Tag: vc

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50% of Your Portfolio Will Be Opportunistic

clover, luck, opportunistic

50% of a fund’s portfolio will come from predictable, hopefully, scalable sourcing mechanisms. It’s the community you run. The events you host. The newsletter you write and the podcast you moderate. It’ll come from existing networks that you’ve built trust with. Prior companies. Collegiate classmates. And geographical proximity.

50% will be opportunistic. Sitting next to a founder in coach. Standing in line at a coffee shop waiting for your friend, only to strike up a conversation with someone who’s been waiting even longer than you have for their friend. That friend of a friend’s spouse’s sister’s cousin you meet at your neighbor’s holiday party. Sitting next to someone who also is the proud parent of a Rottweiler at the dog park.

As such, only half your portfolio can be underwritten by an LP. Half will hardly be able to (with rare exceptions based on fund strategy). And that’s okay. Venture is a game of outliers. You need to increase the surface area for serendipity to stick. As long as most of your opportunistic deal flow is on-thesis. All in all, no more than 10% of your deals should truly be off-thesis. 20% if you have generous and/or venture-literate LPs, which often means their fund-of-fund portfolios are younger and still growing.

But of all the opportunistic deal flow out there, being open-minded of such opportunities is imperative. If you fish, you need to know when to reel it in. If you farm, you need to know when the crop is ripe enough to harvest. If you hunt, you must chase the game.

If you’re a fisher…

  • Build content libraries at scale. Increase the surface area for serendipity to stick. Meaningful and engaged distribution matters more than anything else. In an age of ephemeral attention, decide if you want to create ephemeral content (i.e. news, updates, trends) or evergreen content (i.e. timeless lessons, things that don’t change, classics). Do you want to stay on top of things or get to the bottom of things? The former requires you to stay on the rat wheel, else you disappear into obsolescence.
  • Stand for something. The hill you’re willing to die on must be unique to you, where most people would disagree. But then, you’d be the n of 1 for that belief. Highly optimized for those seeking such a perspective.
  • Host events. Stay top of mind.
  • Build super-connector networks. For some, that’s a scout program. For others, it’s a venture partner one. And others still, an emerging manager fund-of-funds.

If you’re a farmer…

  • Be more helpful than people would assume makes sense.
  • Get/stay involved in networks of aspiring entrepreneurs.
  • Nurture teams and help founders actively attract the best talent and the most enduring customers.
  • Work with founders and ecosystem builders who know how to be grateful. Do not lose the fruits of your labor because no one gave you a chance to harvest them, including yourself.

If you’re a hunter…

  • Move fast, close fast.
  • Be mobile. Be ready to meet your founders where they are at. Even if that means buying a flight out the next day. When everyone else uses a scheduling assistant and sits on Zoom, capitalize on in-person interactions with haste.
  • Know what you’re looking for before you find what you’re looking for, so that when you do come across one, even accidentally, you will have reached conviction before others have gotten to a first meeting.

Of course, most managers are often some permutation of the three. Rarely are they only one. And if they are, they are undeniably the industry’s best in each. Dare I say, as an emerging manager, it is better to spike in one than to just be proficient in all three.

Photo by Peter Burdon on Unsplash

Stay up to date with the weekly cup of cognitive adventures inside venture capital and startups, as well as cataloging the history of tomorrow through the bookmarks of yesterday!

The views expressed on this blogpost are for informational purposes only. None of the views expressed herein constitute legal, investment, business, or tax advice. Any allusions or references to funds or companies are for illustrative purposes only, and should not be relied upon as investment recommendations. Consult a professional investment advisor prior to making any investment decisions.

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When Do You Know If You’ve Grown Up as a VC? | El Pack w/ Ben Choi | Superclusters

ben choi

Ben Choi from Next Legacy joins David on El Pack to answer your questions on how to build a venture capital fund. We bring on 3 GPs at VC funds to ask 3 different questions.

Gilgamesh Ventures’ Miguel Armaza, also host of the incredible Fintech Leaders podcast, asks Ben what is the timing of when a GP should consider raising a Fund III.

Similarly, but not the same, Strange Ventures’ Tara Tan asks when an LP backs a Fund I, how do they know that this Fund I GP will last till Fund III.

Arkane Capital’s Arkady Kulik asks how one should think about building an LP community, especially as he brings in new and different LP archetypes into Arkane’s ecosystem.

Ben manages over $3.5B investments with premier venture capital firms as well as directly in early stage startups. He brings to Next Legacy a distinguished track record spanning three decades in the technology ecosystem.

Ben’s love for technology products formed the basis for his successful venture track record, including pre-PMF investments in Marketo (acquired for $4.75B) and CourseHero (last valued at $3.6B). He previously ran product for Adobe’s Creative Cloud offerings and founded CoffeeTable, where he raised venture capital financing, built a team, and ultimately sold the company.

Ben is an alum and Board Member of the Society of Kauffman Fellows (venture capital leadership) and has also served his community on the Board of Directors for the San Francisco Chinese Culture Center, Children’s Health Council, Church of the Pioneers Foundation, and IVCF.

Ben studied Computer Science at Harvard University before Mark Zuckerberg made it cool and received his MBA from Columbia Business School. Born in Peoria, raised in San Francisco, and educated in Cambridge, Ben now lives in Los Altos with his wife, Lydia, three very active sons, and a ball python.

You can find Ben on his socials here:
X / Twitter: https://x.com/benjichoi
LinkedIn: https://www.linkedin.com/in/bchoi/

Listen to the episode on Apple Podcasts and Spotify. You can also watch the episode on YouTube here.

OUTLINE:

[00:00] Intro
[05:05] Ben’s 2025 Halloween costume
[06:44] Jensen Huang’s leather jackets
[07:24] Jensen Huang’s answer to Ben’s one question
[10:05] Enter Miguel, Gilgamesh Ventures, Fintech Leaders
[14:43] What are good signals an LP looks for before a GP raises a Fund III?
[22:35] Why does Ben say ‘established’ starts at Fund IV?
[25:08] Who’s the audience for Miguel’s podcast?
[27:52] In case you want more like this…
[28:32] Enter Tara and Strange Ventures
[32:46] How does Ben know a Fund I will become a Fund III?
[36:53] How does Ben know if a GP will want to build an enduring career?
[40:58] How does Tara share a future GP she’d like to work with to Ben?
[42:43] Marriage and divorce rates in America
[43:34] What should a Fund I do to institutionalize?
[46:28] Should you share LP updates to current or prospective LPs?
[48:57] Enter Arkady and Arkane Capital
[51:09] How does one think through LP-community fit?
[1:01:31] What’s Arkady’s favorite board game?
[1:03:08] Ben’s last piece of advice to GPs
[1:09:50] My favorite Ben moment on Superclusters

SELECT LINKS FROM THIS EPISODE:

SELECT QUOTES FROM THIS EPISODE:

“The dance of fundraising is when you do have [your thesis], the LP has to figure out is this a rationalization of the past or is it actually what happened? Was this known at the time? Because if it was, we can have some confidence in the future going forward. But if it was just a rationalization of some randomness, then it’s hard to know if Fund IV or V or VI will benefit from the same pattern.” — Ben Choi

On solo GPs bringing in future partners by Fund III… “The future unidentified partner is the largest risk that we have to decide to accept. So there actually isn’t a moment where we decide this GP is going to be around for Fund III. It’s actually the dominating risk we look at and we get there, but it’s a preponderance of other things that we need to build our conviction so high that we’re willing to take that risk.” — Ben Choi

“It’s brutal. It’s a 30-year journey. For any GP who raises a single dollar from external LPs, it’s a 30-year journey.” — Tara Tan

“I don’t think anyone goes into this business to raise capital, but your ability to raise capital is ultimately what allows you to be in this business.” — Ben Choi

On community… “Your core question is how much diversity—in the technical term of diversity—can you tolerate before you lose the sense of community.” — Ben Choi

“Most letters from a parent contain a parent’s own lost dreams disguised as good advice.” — Kurt Vonnegut

“Fundraising is a journey of finding investors who want what you have to offer; it’s not convincing somebody to do something.” — Ben Choi

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

Stay up to date with the weekly cup of cognitive adventures inside venture capital and startups, as well as cataloging the history of tomorrow through the bookmarks of yesterday!

The views expressed on this blogpost are for informational purposes only. None of the views expressed herein constitute legal, investment, business, or tax advice. Any allusions or references to funds or companies are for illustrative purposes only, and should not be relied upon as investment recommendations. Consult a professional investment advisor prior to making any investment decisions.

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Insight Per Half Hour

lightbulb, dark, insight

This is a blogpost where I’ll risk sounding like an asshole. Probably am already one to some, although I try not to be.

My job—as well as all other investors, hiring managers, talent agents, sports scouts, just to name a few—is to make decisions relatively quickly when faced with the pure volume of inflows. Not necessarily investment decisions, but in a brief interaction, it’s my job to figure out if I want to continue spending time with someone. And if I do know, I need to set expectations clearly as soon as I can. Usually within the first interaction. Because of that, I find it useful to develop heuristics.

(max age at which the knowledge one has today would still be impressive) – (age today) = (# of F’s given)

Where… negative F’s is a lost cause. You’re too late to the game. Zero F’s means it’s to be expected. Expectation meets reality. And the larger the number of positive F’s given, the more impressive you are.

Let me contextualize this.

Today, I know that 7 x 8 = 56. Not impressive at all. I’m 29, at the time of writing this post. The max age knowing what 7 x 8 is, and still be impressive, is probably 5 years old.

The Pythagorean Theorem probably caps out on the “impressive scale” at 8 or 9-years old before it’s to be expected. Maybe 10. There are some pieces of knowledge that have an expiration date on impressiveness. If you know E=mc2 at 6-years old, you might be a genius. If you brag about it at 30-years old, people will wonder what you’ve done with your life. That’s not to discount the folks who spend their life on the actual intricacies of the equation. There is also an age where it starts being worrisome if you still don’t know how to do something. At 10, if you know how to file taxes, people will shower praises at you. At 40, if you don’t know how to file your taxes, people will scoff.

The interesting thing is it extends beyond simple math. In venture, there is a certain point in your career that you need to know what pre- and post-money SAFEs are. You need to know the responsibilities of a board member, if you want to be a lead investor. You need to know how to file your K-1’s. You need to know what qualifies for QSBS. If you’re three months into your job as a VC, I don’t expect you to know how to negotiate pro-rata rights when a downstream investor wants you to sell a piece of your equity so they can keep their ownership targets. If you’re a VC, and not a GP, I don’t expect you to know the difference between a 3(c)(1) and a 3(c)(7) entity and that if you have a 3(c)(1) structure, then any LP owning more than 10% will be subject to the look-through rule and every single underlying LP in theirs counts as a beneficial owner and counts towards your 100 investor cap.

There is also so much free content online at this point that the max age where someone will still be impressed by a certain skillset or knowledge will continue to decrease as media democratizes knowledge. Made even easier with AI. Although do take niche knowledge generated by AI with a grain of salt.

The second part, which is equally as important, is: How did you acquire that piece of knowledge? For instance, one of the common “Would you rather?” assessments when I first jumped into venture was: Would you rather invest in someone who graduated from MIT with a 4.0 GPA or someone who took every free computer science course online to learn to built a software product? The common consensus on our team was the latter. The latter shows drive and intrinsic motivation. Critical for someone who’s a founder. Aram Verdiyan and Pejman Nozad call it “distance travelled”, a terminology I’ve since borrowed.

As such, both the insight and the insight development matters. It’s what I look for when I have an intro conversation with a GP and/or founder. It’s what I seek when I go to an investor’s annual summit. So much so, that in my notes, I keep track of who has the highest “insight per half hour.” And I have an extreme bias towards those who have something insightful to share almost every time I have a conversation with them, as well as those who accumulate insights faster than others.

Of course, this isn’t the end all, be all heuristic, but I find it helpful as a rough rule of thumb when a GP claims to have insight in a given area.

Photo by Ethan Hoover on Unsplash

Stay up to date with the weekly cup of cognitive adventures inside venture capital and startups, as well as cataloging the history of tomorrow through the bookmarks of yesterday!

The views expressed on this blogpost are for informational purposes only. None of the views expressed herein constitute legal, investment, business, or tax advice. Any allusions or references to funds or companies are for illustrative purposes only, and should not be relied upon as investment recommendations. Consult a professional investment advisor prior to making any investment decisions.

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Woe is Me

sunset, alone, dock, woe

I was talking to an emerging manager raising a $10M fund recently. He shared a comment, likely off-the-cuff, but something I’ve heard many other emerging managers echo. “This year, most of the dollars deployed into venture has concentrated in only a few big funds.”

Not this manager in particular, but I’ve heard so many other Fund I or Fund II GPs say that. Blaming their struggle with fundraising on the world. It’s not me, but the world is conspiring against me. Or frankly, woe is me. But there is no LP who ever wants to hear that. Building a firm is hard. Building a startup, likely harder. No one said it’ll be easy. So let’s not pretend it’ll be all sunshine and rainbows. If you thought so, you’re deeply misinformed. If you’re going to be an entrepreneur of any kind, you need to take matters into your own hands. You cannot change the world (at least not yet). But you can change how you approach it.

And as an LP, that’s the mentality we’re looking for. Or as Raida Daouk once said on the pod, we like “GPs who can run through walls.”

That said, the mega funds who are raising billions of dollars are raising from institutions whose minimum check size is in the tens, if not hundreds of millions. These same institutions would never invest in an emerging manager. Their team, their strategy, and their institution isn’t built for it. When they have to deploy hundreds of millions, if not billions, a year into “venture” with a team of four or less, you’re not their target audience. So as an emerging manager, those mega funds are not your competition at least when it comes to LP capital.

You’re competing against all the other funds (likely emerging managers) at your fund size. Who can take the same check size you can take. That’s who you’re competing with. So whether you like it or not, billions going to the mega funds has, from a fundraising perspective, nothing to do with you.

If you are looking for reasons to fail, you will find one.

As the great Henry Ford once said, “Whether you think you can, or you think you can’t, you’re right.”

Photo by Johannes Plenio on Unsplash

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

Stay up to date with the weekly cup of cognitive adventures inside venture capital and startups, as well as cataloging the history of tomorrow through the bookmarks of yesterday!

The views expressed on this blogpost are for informational purposes only. None of the views expressed herein constitute legal, investment, business, or tax advice. Any allusions or references to funds or companies are for illustrative purposes only, and should not be relied upon as investment recommendations. Consult a professional investment advisor prior to making any investment decisions.

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“Venture Should Play More Like Moneyball” | Carson Monson | Superclusters | S6E9

carson monson

“The limiting downside is actually something a lot of emerging managers don’t think about. If you can turn all of your portfolio companies that don’t hit that exit velocity, if you can find a soft landing for those companies versus that’s a writeoff and they’re dead and done, that’s extra effort, but that’s an extra turn on your fund’s performance.” — Carson Monson

Carson Monson is a seasoned allocator with nearly a decade of experience backing emerging and spinout GPs across large institutions, government entities, and family offices. After stints at Greenspring, SITFO, and building a fund of funds strategy for a large European single family office, he now runs the fund of funds at CrossRange, which focuses on supporting top-tier emerging and spinout GPs.

Carson has backed everything from micro funds to high-profile managers spinning out of tier-one firms. He is deeply committed to being a thought partner and strategic resource to the GPs he supports, helping them navigate the complexities of fund building and long-term success in the VC industry.

You can find Carson on his socials here:
LinkedIn: https://www.linkedin.com/in/carson-k-monson/
X / Twitter: https://x.com/Monsson_

Listen to the episode on Apple Podcasts and Spotify. You can also watch the episode on YouTube here.

OUTLINE:

[00:00] Intro
[02:08] Wildlife and wholesome trouble
[06:03] The journey to being an LP
[10:54] How did Carson join Greenspring?
[13:55] Lessons across Greenspring
[15:46] How many deals did Greenspring do per year?
[18:46] An example of a qualitative metric worth measuring
[20:16] How many off-thesis bets is a VC allowed to make?
[21:25] When do GPs move from thematic bets to opportunistic bets?
[25:45] How much AUM should any one GP have?
[29:46] Why does Carson liked concentrated portfolios?
[30:32] The case for concentrated portfolios
[36:40] Relationships with GPs should stay at the LP partner level
[39:49] Fund strategy at Fund (n) vs Fund (n + 1)
[45:19] What the hell is ‘critical node theory?’
[49:54] Examples of great references
[52:58] The halo effect of mega funds
[58:48] How does Carson get to inbox zero
[1:02:09] Why is CrossRange different?
[1:08:17] The last time Carson had a pinch-me moment
[1:10:17] Carson’s ricotta gnocchi
[1:12:28] Post-credit scene: Ramen, gluten, Tokyo, and Tonkatsu Suzuki Pt 2

SELECT LINKS FROM THIS EPISODE:

SELECT QUOTES FROM THIS EPISODE:

On if 20% of the fund is focused on opportunistic bets… “Wealthy is a nice word. I would say [20% is] egregious. […] 10%, it’s not like it’s the right number, but it’s the number most LPs won’t contest.” — Carson Monson

“In the past, there have been GPs who are truly excellent at one thing or a couple of things, whether that’s a thesis, strategy, or an approach. And that approach makes a ton of sense at the fund size that they’re operating at or maybe a little bit larger. In the 20-teens especially, people were able to raise more and more, and strategy drift became a huge issue. That is something managers have to face the music on now. It’s almost like the idea of being a professional baseball player and grinding and working your way up and becoming excellent and an all-star baseball player. Then being, ‘Well, the motion is similar in cricket, so I’ll just go play cricket now.’ Ya some of the motions are similar, but it’s a fundamentally different sport. Strategy drift, fund size drift; it can be a really easy trap to fall into. The motions are similar, but you lose that competitive edge when you start to play a different sport.” — Carson Monson

“If you’re more concentrated, there is an ability to impact outcomes more meaningfully. I like GPs that play a critical role in the ecosystem in which they operate in. If you play a critical role—whether that’s in go-to-market motions, whether that’s in commercialization, whether that’s in branding and storytelling—there are so many ways you can play that role. Those types of GPs tend to have an ability to move the needle for their founders more—both on the upside and limiting the downside.” — Carson Monson

“The limiting downside is actually something a lot of emerging managers don’t think about. If you can turn all of your portfolio companies that don’t hit that exit velocity, if you can find a soft landing for those companies versus that’s a writeoff and they’re dead and done, that’s extra effort, but that’s an extra turn on your fund’s performance. There is a skillset in identifying that there’s still good in a company, even if it’s not going to have this massive outcome.” — Carson Monson

“Venture should play more like Moneyball. If you can get your companies on base and limit strikeouts, that is actually so impactful at a fund level. More emerging managers should try to think like CIOs, and less like individual investors, like being a portfolio manager and managing outcomes. Obviously, venture is a game of minority positions. You do not have sole control. Playing that role for your founders, it impacts performance. It impacts reputation and, in fact, your ability to win in the future.” — Carson Monson

“You cannot say, ‘I’m going to be SV Angel today, so I can be USV tomorrow.’” — Carson Monson

“A multi-billion dollar mega fund has to have a portfolio of companies whose aggregate equity value outstrips the GDP of most small nations on this planet.” — Carson Monson

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

Stay up to date with the weekly cup of cognitive adventures inside venture capital and startups, as well as cataloging the history of tomorrow through the bookmarks of yesterday!

The views expressed on this blogpost are for informational purposes only. None of the views expressed herein constitute legal, investment, business, or tax advice. Any allusions or references to funds or companies are for illustrative purposes only, and should not be relied upon as investment recommendations. Consult a professional investment advisor prior to making any investment decisions.

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Underwriting Things That Don’t Change

sequoia tree, does not change

One of the most interesting lines I heard on a podcast that Mike Maples was on was: “90% of our exit profits have come from pivots.” Which I first wrote here. Then here. It’s a line that lives rent free in my mind. Ideas, startups, roadmaps, and goals change all the time. I get it. That’s life. Very, very few folks are folks who unilaterally pursue one thing their entire lives. And of those who do, they’re not all successful.

Another friend of mine whose track record speaks for itself, having invested and involved herself in multiple boards before those companies became unicorns and even after, once told me that the idea she invests in is irrelevant. As long as it has grounds and can be adjacent to a large market. The primary thing she looks for is the founding team.

Early-stage investors obsess about people. They’re not wrong. Some are misled by these “VC-isms.” Others still have their own way of underwriting them. I don’t have a crystal ball. I’m also not the smartest person to be dishing out predictions. I have a rough idea of what will change, though I may not always be right. But I don’t know how they’ll change. Or when. So I’ve lived an investing career obsessing over things that don’t change. Or as Naval Ravikant puts it: “If you lived your life 1000 times, what would be true in 999 of them?”

I’ve written about flaws, limitations and restrictions before. But to quickly surmise:

  • Flaws are things you can overcome. Limited track record. Never managed a team. Never scaled a product. Limited access to capital.
  • Limitations are imposed by others and/or the environment. Gravity dictates that objects don’t fall upward. There are only 24 hours in a day. If you’re not based in the Bay Area, it’s harder to raise capital. Certain investors prefer co-founders and partnerships. Certain investors care about warm intros. The list goes on.
  • Restrictions are rules imposed on yourself by yourself. Batman can’t kill. You only invest in solo founders. You only invest in healthcare. You don’t invest in anyone outside the Ivy League schools. But some restrictions go deeper. You’ll never hire from a job portal again. You never hire or invest outside of your network. You won’t invest or hire having never met someone in person. You need to meet their spouse before you make a hiring decision. You don’t invest in single parents. You don’t hire anyone who doesn’t read at least one book per month. You micromanage. You don’t hire anyone who cannot curse. And yes, I’ve heard all of the above and more. My curiosity is always: Why do you impose such restrictions on yourself? What is the story you’re not telling me? Is out of a fear or admiration?

All that to say:

  • Flaws will and can change if it is a priority. But won’t change if they’re not.
  • Limitations might change, but it’s outside of your and my control. And I don’t get paid to pray to the weather gods.
  • Restrictions often don’t change.

Whether you admit it or not, certain habits are hard to change and unlearn. It’s possible. But that requires you to not only be aware of it, but also actively want to change it. Other habits are second nature. How you treat others. How you start each conversation. Why you look both ways before crossing even an empty street. Why you’ve sold yourself a particular personal narrative. Why you have to invest a certain thesis.

The world seems to always be trying to stay on top of things, but there seems to be far less dialogue around how to get to the bottom of things. To me, when it’s underwriting a person and their team, it’s about underwriting what doesn’t change rather than underwriting what could.

Photo by Hc Digital on Unsplash

Stay up to date with the weekly cup of cognitive adventures inside venture capital and startups, as well as cataloging the history of tomorrow through the bookmarks of yesterday!

The views expressed on this blogpost are for informational purposes only. None of the views expressed herein constitute legal, investment, business, or tax advice. Any allusions or references to funds or companies are for illustrative purposes only, and should not be relied upon as investment recommendations. Consult a professional investment advisor prior to making any investment decisions.

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Can Your Check Size Win You Board-Level Transparency? | Apurva Mehta | Superclusters | S6E8

apurva mehta

“A manager doesn’t generally fit into their ultimate quartile until Year 6.”

Apurva Mehta is the co-founding Managing Partner of Summit Peak Investments, a fund-of-funds that boasts a portfolio of both venture fund investments and direct investments, including the likes of Affirm, Anduril, Airtable, Opendoor, and Wish, just to name a few.

Prior to starting Summit Peak in 2018 with his co-founder, Patrick O’Connor, he previously served as Vice President and Deputy Chief Investment Officer for the Children’s Hospital Endowment Portfolio in Fort Worth, Texa. From 2008 to 2011, he was the Director of Portfolio Investments at The Juilliard School in New York City. Apurva began his career in investment consulting and investment banking at Citigroup and Lehman Brothers. He was recognized for his expertise when he was named to aiCIO Magazine’s Top Forty Under Forty in 2012 and 2013 and honored as a Rising Star by Institutional Investor. He holds a BBA in Finance from The George Washington University.

You can find Apurva on his socials here:
LinkedIn: https://www.linkedin.com/in/apurvaamehta/

Listen to the episode on Apple Podcasts and Spotify. You can also watch the episode on YouTube here.

OUTLINE:

[00:00] Intro
[01:40] Tennis
[02:45] Lehman Brothers’ impact on Apurva
[05:28] What AI is missing in investment management
[14:26] Underestimated qualitative metrics that impact a GP’s story
[22:10] Building Cook Children’s Hospital foundation portfolio from scratch
[30:24] Moving quickly as an LP
[31:32] What does Apurva look for in the first meeting?
[37:20] Ugly sweater Christmas parties
[39:56] Apurva’s favorite ugly sweaters over the years
[41:40] Post-credit scene: What does GFW mean?

SELECT LINKS FROM THIS EPISODE:

SELECT QUOTES FROM THIS EPISODE:

“A manager doesn’t generally fit into their ultimate quartile until Year 6.” — Cambridge Associates

“If everybody’s running the other way—running from the fire, let’s run into it and there’s an opportunity here.” — Apurva Mehta

“When you think about the brand-name firms, they are iconic firms, iconic names. We love the fact that they’re co-invested alongside us. Even if we could build relationships with those firms, we didn’t feel like we’d get the transparency—maybe it was because of our check size, but maybe that’s just because of how they operate—that we needed to go to an investment committee.” — Apurva Mehta

“The transparency at the brand-name firm level is not as high as it is with the kinds of firms we back.” — Apurva Mehta

“Back then, everything was white space, building around network and ecosystems […] It was easier then because the landscape was less crowded. There were 150 backable or quasi-backable seed funds in 2012. 2000 to 3000 now backable and quasi-backable funds in the market. But it was easier then to figure out what we were looking for because it was just brand new.” — Apurva Mehta

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

Stay up to date with the weekly cup of cognitive adventures inside venture capital and startups, as well as cataloging the history of tomorrow through the bookmarks of yesterday!

The views expressed on this blogpost are for informational purposes only. None of the views expressed herein constitute legal, investment, business, or tax advice. Any allusions or references to funds or companies are for illustrative purposes only, and should not be relied upon as investment recommendations. Consult a professional investment advisor prior to making any investment decisions.

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What does GP-Friendly ACTUALLY Mean? | Caroline Toch Docal | Superclusters | S6E7

caroline toch docal

“It’s a mathematical reality that the highest performing GPs in this part of the market often also have the highest kill rates, which means some things are incredible and other things are super wonky and you have to be cool with that. You can’t be doing a six across the board.” — Caroline Toch Docal

Caroline Toch Docal backs early stage fund managers as the lead of BCV’s Emerging Manager Program. She believes in investing in funds as early as the first close, which is a rare focus in the LP landscape. She’s a lifelong early stage enthusiast from her time at Venture for America to Techstars to Chief to Dorm Room Fund to now Bain Capital Ventures, where she runs the emerging manager program there which has seen quite the evolution since 2017.

You can find Caroline on her socials here:
LinkedIn: https://www.linkedin.com/in/carolinetoch/
X / Twitter: https://x.com/carolinetoch

Listen to the episode on Apple Podcasts and Spotify. You can also watch the episode on YouTube here.

OUTLINE:

[00:00] Intro
[01:33] BCV Emerge
[02:30] The 13-year summer camp experience
[07:46] From VC to LP
[09:50] Compare/contrast early stage investing to emerging GP investing
[12:51] Behind the scenes of Caroline chose to become an LP
[14:36] Caroline’s first investment
[16:24] What is a GP-friendly diligence process?
[21:27] How Caroline pre-qualifies an investment?
[24:50] Understanding if a GP REALLY believes VC is their life’s work
[26:25] Examples of long-term language
[31:05] The 3 Acts of BCV’s Emerging Manager program
[36:44] What the hell is BGH?
[38:03] Stand up comedy
[39:20] Dogs vs cats

SELECT LINKS FROM THIS EPISODE:

SELECT QUOTES FROM THIS EPISODE:

“One of the things that’s not really talked about in this part of the asset class is everything looks pretty good until you see a lot of stuff.” — Caroline Toch Docal

“Sometimes people use the referencing phase to get to know people they’d want to meet. I don’t believe that is necessarily the most GP-friendly thing to do.” — Caroline Toch Docal

“It’s a mathematical reality that the highest performing GPs in this part of the market often also have the highest kill rates, which means some things are incredible and other things are super wonky and you have to be cool with that. You can’t be doing a six across the board.” — Caroline Toch Docal

An example ‘long-term language’: “They don’t celebrate fundraising; they celebrate outcomes.” — Caroline Toch Docal

“The average anchor check for a $10-25M fund today is $4.2M. In 2017 when we started, it was less than $3M. So that’s a huge change. Related, the LP base is just concentrating. Using that same size as a benchmark, they have 25% fewer LPs than in 2020.” — Caroline Toch Docal

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For podcast show notes: https://cupofzhou.com/superclusters
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Stay up to date with the weekly cup of cognitive adventures inside venture capital and startups, as well as cataloging the history of tomorrow through the bookmarks of yesterday!

The views expressed on this blogpost are for informational purposes only. None of the views expressed herein constitute legal, investment, business, or tax advice. Any allusions or references to funds or companies are for illustrative purposes only, and should not be relied upon as investment recommendations. Consult a professional investment advisor prior to making any investment decisions.

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The Last Job

old, elderly, last

Ever since I became an LP, albeit small, but a dedicated one, when people ask me what kinds of funds I invest in, I, of course, share the usual:

  • Funds I and II
  • Pre-seed and seed managers (ideally first checks)
  • Both emerging investors (limited track record) and emerging managers (extensive track records, but first-time managers)
  • Industry-agnostic, but little overlap with my existing portfolio
  • Geographically-agnostic
  • Bias towards concentrated portfolios
  • Bias towards sub $50M funds

These are all boilerplate demographics. And I’m happy to qualify each one, but they’re all traits that, more or less, I seek alongside a lot of other emerging manager-focused institutions share. But one additional thing I share with others is that I look for GPs who believe venture is the last job they’re ever going to have.

The world’s best founders bet their entire lives on the success of an idea. The literal definition of all eggs in one basket. Along that journey they’ll raise capital from a variety of people, some of whom will take board seats and be their trusted partners. The last thing a founder would want is someone who “retires” 3-4 years into the job because they didn’t have the intestinal fortitude to stick with the business. They leave a vacant hole in the board. They leave their founders by the wayside. These founders need someone who has their back no matter what.

And even if not, these GPs are the folks founders can call at 3AM in the morning, and these GPs have jumped out of bed before they’ve even picked up the number. They’re primed even on the weekends. Even on vacation. It’s borderline not healthy, but the GPs love this craft as much as the founders love theirs. To them, this job and the all shit that comes with it is the utopia.

The truth is things can change. Will change. But at the time of our investment, I need to believe that every GP I back has no Plan B, that they’re going to figure it out no matter what. And more importantly, they need to believe that. That they’ve been put on this planet to do so. That they will help their portfolio companies figure it out no matter what. And the more concentrated their portfolio, the more they must help. Incentives align.

It’s hard to describe what that exactly looks like because different people exhibit that differently. It’s also one of those things you can’t just say, but comes out in the small things you do, over time. It’s like glitter. Deep and enduring intentions have a way of sticking with you. They’re hard to shake off. And in their darkest, character-building moments, they shine.

And by function of that, we will too. Giving up should not, cannot exist in their vocabulary. I err towards GPs who run through walls. And if they can’t, they need to believe with every fiber of their body they can and will it into existence. Even if they don’t know the answer, they will figure it out quickly. Naturally, they have an extremely high rate of iteration. Their decks, weekly updates, and even their memos will go through sweeping evolutions over the course of a few short months. And that pace will only get faster.

I like investing in people who want long careers in venture. And that will lead us towards two kinds of people:

  1. The kind of person who wants to get rich on fees
  2. And the person who would do this even if they didn’t get rich because they love this craft.

The first cohort will likely have all right answers. They know the jargon. The modelling. The narratives LPs want to. They know exactly how big their Fund III and IV and V looks. How big, their check size. And everything will be explained as a function of today’s dollars, today’s terms, today’s environment. A few deep references will unveil how they treat others. Why they change jobs. What did they say at the job interview every time.

The latter cohort will have a world view. The way the world will look 30-40 years from now. Not in terms of technology, but people. They don’t try to get on top of things though it’s part of their job. They get to the bottom of things. They’re laser focused during conversation. They’re not looking at the notifications on their phone. They’re looking at the small details of the conversation and their mind turns in ways that you haven’t seen others turn. And they often look at things that don’t change. They can go really deep in areas any rational person will have taken at face value. There’s a natural obsessive quality they have about them.

They notice things others do not. And they have a thoughtful reason to things people take for granted. They show evidence that their shower thoughts revolve around this. They wake up in the middle of the night thinking about this. They consume information from various sources and all roads somehow still lead to Rome. In this case, venture.

Photo by Sven Mieke on Unsplash

Stay up to date with the weekly cup of cognitive adventures inside venture capital and startups, as well as cataloging the history of tomorrow through the bookmarks of yesterday!

The views expressed on this blogpost are for informational purposes only. None of the views expressed herein constitute legal, investment, business, or tax advice. Any allusions or references to funds or companies are for illustrative purposes only, and should not be relied upon as investment recommendations. Consult a professional investment advisor prior to making any investment decisions.

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Where Does Intuition Come From? | Yiwen Li | Superclusters | S6E6

yiwen li

“The intuition part comes from activities of creativity that change your perspective.” — Yiwen Li

Yiwen Li is a seasoned investor with a successful track record of investing in AI, blockchain, and healthcare tech while developing global business partnerships to fast-scale the business.

Yiwen is currently Head of Venture Investments at Bayview Development Group, a global family office with diverse exposure public market, private equity, venture, and real estate. Prior, she was a Principal at Alumni Ventures, responsible for end-to-end multi-stage investments focused on blockchain and fintech. She was Director for Corporate Strategy at Masimo (Nasdaq: MASI). She built an innovation pipeline in healthcare connectivity and data analytics. She was Director for Corporate Development at NantHealth (Nasdaq: NH), where she established the international business division. Yiwen started her career at Capital Group in equity research.

Yiwen is an Advisory Board member of C-Sweet. She served on the board of Give2Asia as the chairman of the finance committee and a member of the investment committee. She was an advisory board member for the Asia Society where she co-founded the “Asian Women Empowered” initiative. She was recognized as the” Top 50 Women Leaders in San Jose 2024 and 2025”, “Top 50 Women in 2019” and the “Most Inspirational Women in Web 3”. Yiwen is also the author of one of the best sellers “Make the World Your Playground”, inspiring women to find their unique path. She is a frequent speaker on innovation and emerging technology trends.

Yiwen holds a Master from the London School of Economics and a Master from the University of Vienna. She also graduated from the Venture Capital program at UC Berkeley and the Private Equity Program at Wharton. She was selected to be one of the ” Young American Leaders” at Harvard Business School. Yiwen is a recipient of the European Union’s Erasmus Mundus scholarship. She is fluent in Mandarin and German, worked and lived in Europe, Asia, and US.

You can find Yiwen on her socials here:
LinkedIn: https://www.linkedin.com/in/yiwenli999/

Listen to the episode on Apple Podcasts and Spotify. You can also watch the episode on YouTube here.

OUTLINE:

[00:00] Intro
[02:07] Yiwen’s childhood
[05:00] Jazz singing
[06:14] The value of learning languages
[09:01] How to build intuition around emerging managers
[14:51] Getting to the bottom of a GP’s motivation
[16:33] What percent of GPs are not in VC for the right reasons?
[19:47] Does success fuel or inhibit ambition?
[24:17] The cost of knowledge is cheaper
[24:56] Competitive edges in the current world
[27:06] Why creative activities matter
[31:21] Advice to emerging LPs
[32:42] Post-credit scene

SELECT LINKS FROM THIS EPISODE:

SELECT QUOTES FROM THIS EPISODE:

“The entrepreneur’s [life] is a life where you’re eating glass every day.” — Yiwen Li

“For the first time, the cost of knowledge is becoming cheaper.” — Yiwen Li

“It’s the easiest time to create a company. It’s also the most difficult time to maintain the competitive edge of that company.” — Yiwen Li

“The intuition part comes from activities of creativity that change your perspective.” — Yiwen Li

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

Stay up to date with the weekly cup of cognitive adventures inside venture capital and startups, as well as cataloging the history of tomorrow through the bookmarks of yesterday!

The views expressed on this blogpost are for informational purposes only. None of the views expressed herein constitute legal, investment, business, or tax advice. Any allusions or references to funds or companies are for illustrative purposes only, and should not be relied upon as investment recommendations. Consult a professional investment advisor prior to making any investment decisions.

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