Venture Unlocked

New Ep! Amy Saper of Uncork Capital spoke with Samir Kaji about how startups should embrace constraints to foster creativity, and her learnings from being at Accel, X, Uber, and Stripe. This episode is sponsored by Grasshopper Bank. Listen to the whole discussion at https://lnkd.in/eycV58i

Start-ups are hard and founders deserve better. New Ep! Samir Kaji is joined by Benjamin Sun, co-founder of Primary Venture Partners, a seed-stage fund based in New York. Ben shares his journey from investment banking to startup founder, and eventually to co-founding Primary, which has backed companies like Coupang and Jet (acquired by Walmart). Ben provides deep insights into venture math and the intricacies of completing a GP-led secondary. He discusses his background and the inspiration behind starting Primary in 2015. Ben talks about the challenges he faced as a founder and the importance of truly understanding the business as a VC. He explains Primary's hands-on approach, emphasizing the need for a high seed-to-A graduation rate and how their impact team supports portfolio companies. The conversation covers the metrics used to measure success and the importance of waiting for the right investment opportunities. Ben explores the changing landscape of venture capital, strategies for finding alpha and generating returns, and the importance of sector specialization and deep sector expertise. He also touches on deal flow challenges at the seed stage and the role of incubations in lowering the cost basis. The discussion concludes with exploring GP-led secondaries and the potential for strip sales as a liquidity and realization path for seed investors. So many great nuggets in this episode, listen at https://lnkd.in/eycV58i

Venture Capital is more about people than track record. Samir Kaji speaks with Lindel Eakman of Foundry. Lindel has been an investor in funds and companies since the early 2000s when he started at UTIMCO. In their conversation, Lindel talks about being one of the first investors in Union Square Ventures, his preference for smaller partnerships, and the art of conducting quality reference calls on GPs. Hear the whole conversation at https://lnkd.in/eycV58i

"There's a mass extinction event coming for early & mid-stage companies" Tom Loverro, General Partner at IVP is Samir Kaji's guest as part of the Venture Unlocked Shorts series intended to go deep on a single topic. We revisit Tom’s Twitter post from early 2023 (https://lnkd.in/eMyqa7x9), which spoke to the market shift that was in motion and the difficulties start-ups would face in a capital-constrained market. Specifically, he spoke about 2024 as being a time of reckoning for many companies that were built with growth at all costs mentality. We went through that original post, and what’s transpired since then, including why it’s time for well-positioned startups to go on offense again. Listen to the whole conversation at https://lnkd.in/eycV58i

There will always be inflections that are non-obvious. Mike Maples, Jr stopped by to talk about his new book, Pattern Breakers, with Samir Kaji. They discussed finding greatness in non-consensus startups, the story of Twitch from Justin.TV, and why great companies need insights and inflection points. Hear the whole episode at https://lnkd.in/eycV58i and check out Mike's book at https://lnkd.in/eMq6TwTT.

New Ep! TX Zhuo of Fika Ventures and Samir Kaji discuss raising a Fund I, evolving decision-making frameworks, and what founder first means to them. Here TX talks about calling 700 LPs for their first raise. Listen to the whole discussion at https://lnkd.in/eycV58i

We hear about the Emerging Manager landscape, fundraising, and the need for liquidity from the perspective of an LP. Michael Kim of Cendana Capital stops by to talk with Samir Kaji in another of our LP Unlocked Series. Listen to the whole discussion at https://lnkd.in/eycV58i.

Today, we conclude another amazing year of gathering a leading group of venture fund managers and LP investors for our flagship Beyond Summit 2024 by Allocate. The Allocate team is very grateful for your partnership! Samir Kaji Hana Yang Austen McGregor Nic Millikan, CAIA, CFA John Felix Eitan M. Peter Epstein View our recap video.

Small VC funds vs. Large VC funds by the numbers: By now, most people have definitely concluded that in VC, small funds outperform their larger fund counterparts. Our view, both heuristically and backed by our own data, is that small funds can materially outperform, but there is a clear added dimension of risk that shouldn't be ignored. First, what does our data say by fund size? Keep in mind that the data below is from 253 funds, with only pre-2019 vintage years being included (to eliminate the J-curve effect and our belief that 4-5 years need to pass before a directional stance can be taken on a fund). Also, the mean performance numbers may look inflated, but they include some large outliers and have mainly (by our measure) very high quality fund managers. Also, we expect final DPI will show a softening of perhaps 20-40% in these numbers over time as markdowns continue. TLDR: Small funds (0-100MM) definitely can outperform when successful, but come with a much higher level of volatility (and even this data set has survivorship bias). The challenge for risk mitigation for small funds is discovery, diligence, and building an appropriate level of diversification through picking multiple of these funds. This can be very time intensive and laborious for most investors (given nearly 70% of current VC managers raised funs that fall in this range) Large VC funds can be fundamentally different products when it comes to risk/return through the inherent characteristics they possess, including 1)More Series B and later exposure given the higher % of reserves these funds hold for follow-on relative to seed funds 2) more portfolio companies 3) typically larger teams and brands. Also, many larger brands staple offerings of early stage + growth, which by definition will provide lower volatility and should provide liquidity sooner (in theory). However, the tradeoff for less manager risk/lower vol is a tighter band of potential outcomes, with top-end DPI outliers being very rare given the basic math of venture (especially when premium carry is taken into account). At the end of the day, each investor needs to assess their own constraints of time, risk, and return expectations to develop a portfolio of VC funds that makes sense for them. Here is the data: Small Funds (0-100MM): Mean TVPI: 4.3 Standard Deviation: 2.4 Median Portfolio Companies: 26 Mid-Sized Funds (100-250MM): Mean TVPI: 3.6 Standard Deviation: 2.0 Median Portfolio Companies: 24 Mid-Large (250-500MM): MeanTVPI: 3.0 Standard Deviation: 1.2 Median Portfolio Companies: 35 Large (500MM+): Mean TVPI: 2.7 Standard Deviation: 0.9   Median Portfolio Companies: 43  #VentureCapital #InvestmentStrategy #PrivateMarkets #VCInsights #RiskManagement #PortfolioManagement #Allocate

Meghan Reynolds of Altimeter and Samir Kaji discuss the liquidity crunch and why GPs must start getting creative in showing returns earlier. This episode was sponsored by Sydecar Listen to the whole conversation at https://lnkd.in/eycV58i