20VC: The Memo: How to Raise a Venture Capital Fund (Part I) | The Core Lessons from Raising $400M Over The Last Four Years| The Biggest Mistakes VCs Make When Fundraising | How To Find and Build Relationships with New LPs
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch11 Jan 2023

20VC: The Memo: How to Raise a Venture Capital Fund (Part I) | The Core Lessons from Raising $400M Over The Last Four Years| The Biggest Mistakes VCs Make When Fundraising | How To Find and Build Relationships with New LPs

How To Raise a Venture Capital Fund

Over the last 4 years, I have raised around $400M across different vehicles from many different types of investors. Today I am going to break down the early stages of how to raise a venture capital fund and then stay tuned for a follow-up to this where we will break down a fundraising deck for a fund, what to do, what not to do etc. But to the first element.

Your Fund Size is Your Strategy:

The most important decision you will make is the size of fund you raise. So much of your strategy and approach will change according to your fund size target (LP type, messaging, documentation, structure etc). Remember, your fund size is your strategy. If you are raising a $10M Fund, you are likely writing collaborative checks alongside a follower, if you are raising a $75M fund, you will likely be leading early-stage seed rounds. These are very different strategies and ways of investing.

MISTAKE: The single biggest mistake I see fund managers make is they go out to fundraise with too high a target fundraise. One of the most important elements in raising for a fund is creating the feeling of momentum in your raise. The more of the fund you have raised and the speed with which you have raised those funds dictate that momentum. So the smaller the fund, the easier it is to create that heat and momentum in your raise.

LESSON: Figure out your minimum viable fund size (MVFS). Do this by examining your portfolio construction. In other words, how many investments you want to make in the fund (the level of diversification) and then alongside that, the average check size you would like to invest in each company. Many people forget to discount the fees when doing this math and so the traditional fund will charge 2% fees per year and so across the life of the fund (usually 10 years), that is 20% of the fund allocated to fees.

Example:

We are raising a $10M Fund.

20% is allocated to fees for the manager and so we are left with $8M of investable capital.

A good level of diversification for an early-stage fund is 30 companies and so with this fund size, I would recommend 32 investments with an average of $250K per company. That is the $8M in invested capital. Big tip, I often see managers raising a seed fund and are only planning to make 15 investments, this is simply not enough. You have to have enough diversification in the portfolio if you are at the seed stage. No one is that good a picker. Likewise, I sometimes see 100 or even 200 investments per fund, this is the spray-and-pray approach, and although works for some, your upside is inherently capped when you run the maths on fund sizes with this many investments.

A big element to point out in this example is we have left no allocation for reserves. For those that do not know, reserves are the dollars you set aside to re-invest in existing portfolio companies. Different funds reserve different amounts, on the low end there is 0% reserves and on the high end some even have 70% of the fund reserved for follow-on rounds.

In this example, given the size of the fund being $10M with a seed focus, I would recommend we have a no-reserves policy. Any breakout companies you can take to LPs and create SPVs to concentrate further capital into the company. This is also better for you as the manager as you then have deal by deal carry on the SPVs that are not tied to the performance of the entire fund.

So now we know we know $10M is our MVFS as we want to make at least 30 investments and we want to invest at least $250K per company. Great, next step.

Set a target that is on the lower end, you can always have a hard cap that is significantly higher but you do not want the target to be too far away that LPs question whether you will be able to raise the fund at all. This is one of the biggest reasons why many do not invest in a first time fund, they are unsure whether the fund will be raised at all.

The Team:

Alongside the size of the fund, the team composition is everything, simply put, LPs like managers who have invested in the stage you are wanting to invest in moving forward. They like to see track record.

IMPORTANT: I see so many angels write checks into breakout Series B companies and then go out and try and raise a seed fund with this as their track record. Do not do this, this does not prove you are a good seed investor but merely shows you have access at the Series B. These are very different things.

With regards to track record, in the past, TVPI or paper mark-ups were enough, now there is a much greater focus on DPI (returned capital to investors). LPs want to see that you have invested before at that stage and they also want to see that the team has worked together before. You want to remove the barriers to no. If you have not worked with the partners you are raising with before, LPs will have this as a red flag, and as team risk, it is that simple.

Navigating the World of LPs (Limited Partners)

The size of the fund you are raising will massively dictate the type of LPs that will invest in your fund.

MISTAKE: You have to change your messaging and product marketing with each type of LP you are selling to. A large endowment fund will want a very different product to a Fund of Funds.

Example: If you are a large endowment, you will invest in early funds but you want the manager to show you a pathway to them, in the future, being able to take not a $10M check but a $50M check from the endowment. Whereas the Fund of Funds will likely want you to stay small with each fund. So when discussing fund plans, it is crucial to keep these different desires in mind.

If you are raising a $10M fund, you will be too small for institutional LPs and will raise from individuals and family offices. An LP will never want to be more than 20% of the LP dollars in a fund and so the size at which an institutional LP (really the smallest fund of funds) would be interested is when you raise $25M+ and they can invest $5M. Generalisation but a good rule of thumb to have.

LP Composition of Your Fund:

Speaking of one LP being 20% of the fund dollars, it is helpful to consider the LP composition you would like to have for your fund. The most important element; you want to have a diversified LP base. A diversified LP base is important in two different forms:

  1. No LP should be more than 20% of the fund at a maximum. That said you do not want to have so many investors in your fund it is unmanageable. LPs need time and attention and so it is important to keep that in mind when considering how many you raise from. Some LPs will want preferred terms or economics for coming into the first close or being one of the first investors, if you can, do not do this. It sets a precedent for what you will and will not accept and then for all subsequent investors, they will want the same terms and rights.
  2. You want to have a diversification of LP type (endowments, fund of funds, founders, GPs at funds etc). Why? In different market cycles, different LPs will be impacted and so if you only raise from one LP type, if a market turns against that LP class, then your next fund is in danger.

Example:

We will see the death of many mico-funds ($10M and below). Why? The majority raised their funds from GPs at larger funds and from public company founders. With the changing market environment, most GPs are no longer writing LP checks and most public market founders have had their net worths cut in half by the value of their company in the public market and so likewise, are no longer writing LP checks. In this case, the next funds for these funds will be in trouble as their core LP base is no longer as active as they used to be. We are seeing this today.

Prediction:

  • 50% of the micro-funds raised in the last 2 years will not raise subsequent funds.

Going back to the question of diversification, my preference and what we have at 20VC, the majority of dollars are concentrated from a small number of investors. Of a $140M fund, we have $100M invested from 5 large institutions. These are a combination of endowments, Family Offices, a High Net Worth Individual and a Fund of Funds. The remaining $40M originates from smaller institutions or individuals, for us we have over 50 making up that final $40M. For me, I really wanted to have a community around 20VC Fund and so we have over 40 unicorn founders invested personally in the fund as LPs.

Bonus Points: The best managers select their LPs to play a certain role or help with a potential weakness the manager has. For example, I was nervous I did not have good coverage of the Australian or LATAM startup market and so I was thrilled to add founders from Atlassian, Linktree, Mercado Libre, Rappi and Nubank as LPs to help in regions where I do not have such an active presence. If you can, structure your LP base to fill gaps you have in your ability.

Status Check In:

Now we know our minimum viable fund size, we know the team composition we are going out to raise with, we know the LP type that we are looking to raise money from and we know how we want our desired fund cap table to look.

Now we are ready to move to the LPs themselves.

Fill Your Restaurant with Friendlies:

As I said, the appearance of your raise having heat and momentum is important.

Mistake: The biggest mistake I see early fund managers make is they go out to large institutional investors that they do not have an existing relationship and spend 3-4 months trying to raise from them. They lose heat, they lose morale and the raise goes nowhere.

Whatever fund size you are raising, do not do this. Fill your restaurant with friendlies first. What does this mean? Go to anyone you know who would be interested in investing in your fund and lock them in to invest. Create the feeling that progress is being made and you have momentum.

BONUS POINTS: The best managers bring their LPs with them for the fundraise journey. With each large or notable investor that invests in your fund, send an email to the LPs that have already committed to let them know about this new notable investor. This will make them feel like you have momentum, they are in a winner and many will then suggest more LP names, wanting to bring in their friends.

MISTAKE: Do not set a minimum check size, some of the most helpful LPs in all of my funds have been the smallest checks. Setting a minimum check size will inhibit many of the friendlies from investing and prevent that early momentum.

The bigger the name the incoming investor has the better. You can use it for social validity when you go out to raise from people you know less well or not at all. Different names carry different weight, one mistake I see many make is they get a big name invested in their fund but it is common knowledge to everyone that this LP has done 200 or 300 fund investments, in which case, it does not carry much weight that they invested in your fund. Be mindful of this as it can show naivety if you place too much weight on a name that has invested in so many funds.

Discovery is Everything:

The world of LPs is very different to the world of venture. 99% of LPs do not tweet, write blogs or go on podcasts. Discovery is everything. When I say discovery I literally mean finding the name of the individual and the name of the organization that is right for you to meet.

This can take the form of several different ways but the most prominent for me are:

  1. The Most Powerful: Create an LP acquisition flywheel. What do I mean by this? When an LP commits to invest in your fund. Say to them, "thank you so much for your faith and support in me, now we are on the same team, what 3 other LPs do you think would be perfect for the fund?" Given they have already invested, they already believe in you and so 90% of them will come back with 3 names and make the intro. Do this with each LP that commits and you will create an LP acquisition flywheel.

Bonus Point: The top 1% of managers raising will already know which LPs are in the network of the LP that has just committed and will ask for those 3 specific intros. They will then send personalized emails to the LP that has just committed. The LP is then able to forward that email to the potential LP you want to meet. You want to minimize the friction on behalf of the introducer and so writing the forwardable email is a great way to do this.

  1. The Most Likely to Commit: LPs are like VCs. When one of their portfolio managers makes an intro and recommendation to a potential fund investment, they will place a lot more weight on it than they would have otherwise. So get your VC friends to introduce you to their LPs, it is that simple. Remember, you have to remove the friction from the introducer. So, make sure to send the email they can forward to the LP. Make this personalized and concise.

Mistake: Many VCs do not like to introduce other managers to their LPs as they view it as competition. This is moronic. If the manager asking for the intro is really good, they will raise their fund with or without your intro. If they are not good, then you can politely say it would not be a fit for your LP and move on. Do not be too protective of your LPs from other managers.

  1. The Cold Outbound: I am not going to lie cold outbound for LPs is really hard. Here is what I would suggest:

  • Pitchbook: It is expensive and many cannot afford it but if you can, it is worth it for LP discovery. They have thousands of LPs of different types on the platform all with their emails and contact details. Those are less useful as a cold email to an LP is unlikely to convert but just finding their names and the names of their organization is what is important. You can then take that to Linkedin to then find the mutual connections you have with that person and ask for a warm intro.
  • Linkedin: Many LPs have the funds that they have invested in on their Linkedin profiles with the title "Limited Partner". If they are invested in a fund that is aligned with the strategy that you are raising for, there is a strong chance they might be a fit. For example, I invest in micro-funds and have invested in Chapter One, Scribble, Rahul from Superhuman and Todd's Fund, and Cocoa Ventures, so you see this and see I like sub $25M funds with a specific angle.
  • Clearbit: Often you will know the name of the institution but not the name or position of the person within the institution that you are looking to raise from. Download a Google Chrome Plugin called Clearbit. With Clearbit you can simply insert the URL for the organization you would like to speak with and then all the people within it will appear and you can select from title and their email will be provided. Again, if you do not want to cold email, you now have their name which you can take to your community, to ask for the intro.

MISTAKE: LPs invest in lines, not dots. Especially for institutional LPs, it is rare that an institution will meet you and invest in you without an existing relationship and without having followed your work before. A mistake many make is they go to large institutions and expect them to write a check for this fund, it will likely be at best for the fund after this one or most likely the third fund. This does not mean you should not go to them with your first fund but you should not prioritize them and you should not expect them to commit. I would instead go in with the mindset of we are not going to get an investment here, so I want to leave the room understanding what they need to see me do with this first fund, to invest in the next fund. The more detailed you can get them to be the more you can hold them to account for when you come back to them for Fund II.

Example: If they say, we want to see you are able to price and lead seed rounds and we are not sure you can right now. Great. Now when you come back to them in 12 months' time, you can prioritize the fact that you have led 80% of the rounds you invested in, and their core concern there has been de-risked.

In terms of how I think about LP relationship building, I always meet 2 new LPs every week. I ensure with every quarter, I have a check-in with them and ensure they have our quarterly update. This allows them to follow your progress, learn how you like to invest, and communicate with your LPs. It also really serves to build trust. Doing this not in a fundraising process also removes the power imbalance that is inherent within a fundraise and allows a much more natural relationship to be created.

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20VC: Why The Best CEO's Are The Best Capital Allocators, How You Can Build A Business In A Space You Are Not Passionate About & When Is The Right Time To Put The Pedal To The Metal with Josh Hannah, General Partner @ Matrix Ventures

20VC: Why The Best CEO's Are The Best Capital Allocators, How You Can Build A Business In A Space You Are Not Passionate About & When Is The Right Time To Put The Pedal To The Metal with Josh Hannah, General Partner @ Matrix Ventures

Josh Hannah is a General Partner @ Matrix Partners where he has led investments in the likes of Canva, Quora and Huddle just to name a few. However, Josh really is an innate entrepreneur himself having co-founded Betfair in 1999, the worlds first online sports marketplace which is now publicly traded on London Stock Exchange and processes more than $50bn in transactions per year. Following Betfair, Josh bought and turned around eHow where he increased traffic and revenue 30 x before selling the company to Demand Media. Josh has also made some stellar angel investments in the likes of Angellist, HotelTonight and Minted.com. In Today's Episode You Will Learn: 1.) How Josh made the transition from founding Betfair and turning around eHow to becoming a General Partner @ Matrix? 2.) Josh took large amounts of VC funding with Betfair and entirely bootstrapped his 2nd business, eHow. How did the two experiences differ and how can founders determine whether to raise VC funding or bootstrap it themselves? 3.) Why does Josh believe capital allocation has gotten worse from founders over time? How does this affect the role of VCs as board members? 4.) Why does Josh believe that people are wrong to say ideas are worthless and it is all about execution? How does Josh approach the process of idea generation? How can this be optimised? 5.) Why does Josh believe, contra to conventional wisdom, that one can build a strong business in a space that you are not passionate about? What are the potential pitfalls that can be avoided? Items Mentioned In Today's Show: Josh's Fave Book: Shoe Dog: A Memoir By The Creator of Nike, The Rise Of The Robots Josh's Fave Blog: Benedict Evans Josh's Most Recent Investment: Kinnek (On The Show On Friday! As always you can follow Harry, The Twenty Minute VC and Josh on Twitter here! Likewise, you can follow Harry on Snapchat here for mojito madness and all things 20VC. This episode was supported by Wunder Capital, the leading online investment platform that allows individuals to invest in large scale solar projects across the U.S. Wunder's solar investment funds allow you to earn up to 11% annually, while diversifying your portfolio, curbing pollution and combating global climate change. Do well by doing good and sign up for a free account here and join the thousands of people that are already achieving their investment targets.

3 Okt 201632min

20VC: Why The Evolution of Digital Media Presents A Multi $Bn Opportunity with Brit Morin, Founder & CEO @ Brit + Co

20VC: Why The Evolution of Digital Media Presents A Multi $Bn Opportunity with Brit Morin, Founder & CEO @ Brit + Co

Brit Morin is the Founder & CEO @ Brit + Co the online media and e-commerce platform that provides tools to teach, inspire, and enable creativity among women and girls. They have raised funding from some of the world's best investors including Index, General Catalyst, Intel Capital, Founders Fund and Lerer Hippeau just to name a few. As for Brit, prior to Brit + Co, Brit worked at Google in product management and before that with Apple on iTunes. In Today's Episode You Will Learn: 1.) How Brit came to found Brit + Co? 2.) How have we seen the traditional media landscape change over the last few years with the rise of digital? Does Brit agree with Marc Andreesen's assertion that print journalism is converging in quality and technique with blogs and Wikipedia? 3.) How does Brit view the competitive landscape for digital media? Is this an M&A by larger traditional media companies, will smaller startup media companies merge to form modern media powerhouses? 4.) How does Brit view the importance of niche communities? What does it take to foster and grow an organic niche community? 5.) Brit + Co is backed by some of the best funds in the world so what was Brit's approach to fundraising? How did Brit see it alter and evolve with the differing funding rounds? Items Mentioned In Today's Show: Brit's Fave Blog: The Information Brit's Fave Book: The Giver As always you can follow Harry, The Twenty Minute VC and Brit on Twitter here! Likewise, you can follow Harry on Snapchat here for mojito madness and all things 20VC. Eve make 1 perfect mattress – made with 3 layer technology and next generation memory foam. It comes packaged in a beautiful box and arrives the day after you order. You get 100 nights to try it with free return pick-up – it really is the perfect mattress for everyone. Just go online to evemattress.co.ukand enter the code 20VC for £50 off. Everybody deserves the perfect start with Eve. Cooley are the global law firm built around startups and venture capital. Since forming the first venture fund in Silicon Valley, Cooley has formed more venture capital funds than any other law firm in the world, with 50+ years working with VCs. They help VCs form and manage funds, make investments and handle the myriad issues that arise through a fund's lifetime. So to learn more about the #1 most active law firm representing VC-backed companies going public. Head over to cooley.comand also atcooleygo.com.

30 Sep 201632min

20VC: Dave Morin on Why Building A Fund Is Like A Company, Why Venture Is A Craft & The Journey To Establish Slow Ventures

20VC: Dave Morin on Why Building A Fund Is Like A Company, Why Venture Is A Craft & The Journey To Establish Slow Ventures

Dave Morin is Founder & Partner at Slow Ventures, the leading valley venture fund with investments in the likes of Slack, Pinterest, Evernote, NextDoor, Postmates just to name a few. Prior to Slow, Dave was the Co-Founder and CEO of Path, the social network that serves tens of millions of people every day. Path was acquired by Kakao in 2015. If that was not enough, he also spent several years at Facebook where he led Facebook Platform and Connect during periods of rapid innovation and growth. Today, he serves on the Board of Directors of Eventbrite, Dwell, and Hinge. In Today's Episode You Will Learn: 1.) How Dave made the transition from Facebook and Path to founding Slow Ventures? 2.) As a new entrant to VC, how does Dave look to develop pattern recognition with founders and ideas? What is the most challenging element? 3.) Why did Dave, Sam and Kevin decide to institutionalise Slow for the 'club' to the structured fund that it is today? How did that change their investment decision making process? 4.) What role does network play in the value and operations of Slow? How do they look to increase the network effect to further provide value to their companies? 5.) What role does valuation and ownership play for Dave when investing? How does that change with the larger cheques? Items Mentioned In Today's Show: Dave's Fave Book: The Alchemist Dave's Fave Blog: The Information Dave's Most Recent Investment: Perlstein Lab As always you can follow Harry, The Twenty Minute VC and Dave on Twitter here! Likewise, you can follow Harry on Snapchat here for mojito madness and all things 20VC. Eve make 1 perfect mattress – made with 3 layer technology and next generation memory foam. It comes packaged in a beautiful box and arrives the day after you order. You get 100 nights to try it with free return pick-up – it really is the perfect mattress for everyone. Just go online to evemattress.co.ukand enter the code 20VC for £50 off. Everybody deserves the perfect start with Eve. Cooley are the global law firm built around startups and venture capital. Since forming the first venture fund in Silicon Valley, Cooley has formed more venture capital funds than any other law firm in the world, with 50+ years working with VCs. They help VCs form and manage funds, make investments and handle the myriad issues that arise through a fund's lifetime. So to learn more about the #1 most active law firm representing VC-backed companies going public. Head over to cooley.com and also atcooleygo.com.

28 Sep 201627min

20VC: The 3 Things LPs Want To See From VCs & Why The Table Stakes For VCs Is Higher Than Ever with Judith Elsea, Co-Founder @ Weathergage Capital

20VC: The 3 Things LPs Want To See From VCs & Why The Table Stakes For VCs Is Higher Than Ever with Judith Elsea, Co-Founder @ Weathergage Capital

Judith Elsea is a Co-Founder @ Weathergage Capital, one of the world's leading fund of funds with over $950m AUM. Prior to Wealthergage, Judith was Chief Investment Officer of the Ewing Marion Kauffman Foundation from 1993 to 2001. As CIO, she directed a $2 billion globally diversified investment portfolio, committing over $600 million to US early stage venture funds and other private equity partnerships. She was also instrumental in the creation and implementation of the Kauffman Fellows Program, a global apprenticeship program designed to train the next generation of venture capitalists. In Today's Episode You Will Learn: 1.) How Judith made her way into the world of LPs and what makes her think venture is such an attractive asset class? 2.) What gets Judith really excited when viewing prospective fund managers for potential investments? What differentiators does Judith look for? 3.) What are the most common reasons Judith finds for her rejecting fund managers for investment? What are they not doing and how can they optimise this? 4.) To what extent do LPs have a commitment to invest in further funds having invested in one fund? Are there any situations where this changes? 5.) What are the similarities and differences between fundraising for LPs vs fundraising for startups? How should the different elements be approached? Items Mentioned In Today's Show: Judith's Fave Book: Patrick O'Brian Judith's Fave Blog: The Twenty Minute VC, a16z, Founder Collective Judith's Most Recent Investment: Felicis Ventures As always you can follow Harry, The Twenty Minute VC and Judith on Twitter here! Likewise, you can follow Harry on Snapchat here for mojito madness and all things 20VC. Eve make 1 perfect mattress – made with 3 layer technology and next generation memory foam. It comes packaged in a beautiful box and arrives the day after you order. You get 100 nights to try it with free return pick-up – it really is the perfect mattress for everyone. Just go online to evemattress.co.ukand enter the code 20VC for £50 off. Everybody deserves the perfect start with Eve. Cooley are the global law firm built around startups and venture capital. Since forming the first venture fund in Silicon Valley, Cooley has formed more venture capital funds than any other law firm in the world, with 50+ years working with VCs. They help VCs form and manage funds, make investments and handle the myriad issues that arise through a fund's lifetime. So to learn more about the #1 most active law firm representing VC-backed companies going public. Head over to cooley.com and also atcooleygo.com.

26 Sep 201631min

20VC: Intercom's Eoghan McCabe on What Makes A Truly Great CEO & What Founders Should Look For In Their Investors

20VC: Intercom's Eoghan McCabe on What Makes A Truly Great CEO & What Founders Should Look For In Their Investors

Eoghan McCabe is the CEO and co-founder of Intercom. The customer communications platform that has taken the SaaS world by storm in the last few years with 116m in VC funding from truly some of the world's best including Bessemer, Social Capital and Index Ventures. Prior to Intercom, he founded Contrast, an award-winning software design consultancy, and co-founded Exceptional, a developer tool startup acquired in 2011 and now a part of Rackspace. In Today's Episode You Will Learn: 1.) How Eoghan came to found Intercom? 2.) Question From Andy McLoughlin: What were the biggest lessons from your previous startups? 3.) How did Eoghan find the early fundraising process? How did he come to meet his angel investors? How did he get them to look beyond the product and invest in him? 4.) Eoghan raised his Series B just 6 months after his Series A. Why was this so quick? How did he select his investors? 5.) What separates good from truly great CEOs? How has Eoghan seen his own management style changed over the Intercom journey? Items Mentioned In Today's Show: Eoghan's Fave Blog: SaaStr, The Intercom Blog As always you can follow Harry, The Twenty Minute VC and Eoghan on Twitter here! Likewise, you can follow Harry on Snapchat here for mojito madness and all things 20VC. Eve make 1 perfect mattress – made with 3 layer technology and next generation memory foam. It comes packaged in a beautiful box and arrives the day after you order. You get 100 nights to try it with free return pick-up – it really is the perfect mattress for everyone. Just go online to evemattress.co.ukand enter the code 20VC for £50 off. Everybody deserves the perfect start with Eve. Cooley are the global law firm built around startups and venture capital. Since forming the first venture fund in Silicon Valley, Cooley has formed more venture capital funds than any other law firm in the world, with 50+ years working with VCs. They help VCs form and manage funds, make investments and handle the myriad issues that arise through a fund's lifetime. So to learn more about the #1 most active law firm representing VC-backed companies going public. Head over to cooley.comand also atcooleygo.com.

23 Sep 201624min

20VC: Why Valuation Is A Stupid Concept, VC Is Ripe For Disruption & Not All LPs Are Made Equal with Michael Skok, Founding Partner @ Underscore VC

20VC: Why Valuation Is A Stupid Concept, VC Is Ripe For Disruption & Not All LPs Are Made Equal with Michael Skok, Founding Partner @ Underscore VC

Michael Skok is a Founding Partner @ Underscore VC. Michael started his first software business as a teenager, spent 21 years as an entrepreneur where he founded and recruited teams that attracted over $100m in private equity for investments in multiple software companies. Over the last 13 years as a venture investor. Along the way, he also mentored and taught for 4 years at Harvard as an EIR at Harvard Business School, and spent a year interviewing entrepreneurs on a "listening tour" before founding _Underscore.VC. Michael also started the most incredible education series, 'Startup Secrets', in collaboration with Harvard iLab, check it out here. In Today's Episode You Will Learn: 1.) How Michael made his way into the wonderful world of VC with Underscore? 2.) From Michael's listening tour, what did he discover that entrepreneurs wanted in an investor? 3.) How did Michael present the innovative model of Underscore to prospective LPs? What was their response? What did Michael look for in the LPs he selected? 4.) What does Michael mean when he says you have to create minimum viable segments? 5.) How does Michael view market creation? What his framework for this? Items Mentioned In Today's Show: Michael's Fave Book: Daemon Michael's Fave Blog: Mattermark Michael's Most Recent Investment: Mautic As always you can follow Harry, The Twenty Minute VC and Michael on Twitter here! Likewise, you can follow Harry on Snapchat here for mojito madness and all things 20VC. Eve make 1 perfect mattress – made with 3 layer technology and next generation memory foam. It comes packaged in a beautiful box and arrives the day after you order. You get 100 nights to try it with free return pick-up – it really is the perfect mattress for everyone. Just go online to evemattress.co.ukand enter the code 20VC for £50 off. Everybody deserves the perfect start with Eve. Cooley are the global law firm built around startups and venture capital. Since forming the first venture fund in Silicon Valley, Cooley has formed more venture capital funds than any other law firm in the world, with 50+ years working with VCs. They help VCs form and manage funds, make investments and handle the myriad issues that arise through a fund's lifetime. So to learn more about the #1 most active law firm representing VC-backed companies going public. Head over to cooley.com and also atcooleygo.com.

21 Sep 201633min

20VC: Index's Ilya Fushman on The Key Lessons From Scaling Dropbox To 400m Users, Is Excessive Amounts Of Capital Driving Valuations Too High In The Valley & Why Venture Is Like Being On A Swim Team Not A Soccer Team

20VC: Index's Ilya Fushman on The Key Lessons From Scaling Dropbox To 400m Users, Is Excessive Amounts Of Capital Driving Valuations Too High In The Valley & Why Venture Is Like Being On A Swim Team Not A Soccer Team

Ilya Fushman is a Partner at Index Ventures where he has made investments in the likes of Slack, Intercom, Dropbox and Optimizely. Prior to joining Index, Ilya was the head of product at Dropbox. As one of Dropbox's first 75 employees, he helped build and run the company's business and corporate development functions, before taking on a product leadership role and building out Dropbox, Dropbox for Business and the developer platform. Before Dropbox, he was a principal at Khosla Ventures and the Director of Technology at the solar cell startup Solar Junction. In Today's Episode You Will Learn: 1.) How Ilya made his transition from Dropbox to return to the world of VC with Index? 2.) Does Ilya agree that to scale successfully you have to reinvent yourself every 6 months? Why does Ilya believe you must infuse an element of delight into the people side of the business? How can this be done effectively? 3.) How did Ilya and the Dropbox team look to effectively manage and scale the employee on boarding process with the growth of the company? 4.) Question from Lars @ Balderton: Does Ilya believe his extensive operational background allows him to get into deals he would otherwise not have been able to win? 5.) Question from Lars: Does Ilya believe an excess of capital is driving prices in the valley excessively high? Will we continue to see this in the coming years? Items Mentioned In Today's Show: Ilya's Fave Book: Mikhail Bulgakov: The Master & Margarita Ilya's Most Recent Investment: Slack, Culture Amp As always you can follow Harry, The Twenty Minute VC and Ilya on Twitter here! Likewise, you can follow Harry on Snapchat here for mojito madness and all things 20VC. Eve make 1 perfect mattress – made with 3 layer technology and next generation memory foam. It comes packaged in a beautiful box and arrives the day after you order. You get 100 nights to try it with free return pick-up – it really is the perfect mattress for everyone. Just go online to evemattress.co.ukand enter the code 20VC for £50 off. Everybody deserves the perfect start with Eve. Cooley are the global law firm built around startups and venture capital. Since forming the first venture fund in Silicon Valley, Cooley has formed more venture capital funds than any other law firm in the world, with 50+ years working with VCs. They help VCs form and manage funds, make investments and handle the myriad issues that arise through a fund's lifetime. So to learn more about the #1 most active law firm representing VC-backed companies going public. Head over to cooley.com and also atcooleygo.com.

19 Sep 201626min

20VC: Eero's Nick Weaver on Why You Have To Grow One Stage Ahead of Where Your Business Is At and Why If You Want A Great Customer Experience, You Have To Own All The Parts

20VC: Eero's Nick Weaver on Why You Have To Grow One Stage Ahead of Where Your Business Is At and Why If You Want A Great Customer Experience, You Have To Own All The Parts

Nick Weaver is the Founder & CEO @ Eero. The company that makes your wifi hyper fast, super simple and brilliantly efficient. Prior to founding Eero, Nick was himself a VC at Menlo Ventures where he worked with companies like Uber, Betterment, Periscope and Dropcam. Before becoming a VC, Nick co-founded StartX, the community for the best Stanford entrepreneurs providing them with the required resources to build the next generation of leading companies. In Today's Episode You Will Learn: 1.) How Nick made the move from VC with Menlo to Founder and CEO @ Eero? 2.) How can founders identify nascent and attractive markets that are ripe for disruption? 3.) How did Nick approach the pricing mechanism with Eero? Why do hardware startups need to have a greater margin than software startups? 4.) Why did Nick raise 2 rounds of funding before the product launched? Why did Nick decide he wanted to own all the parts of the production chain with Eero? 5.) How does Nick view the competitive landscape for such products? How does he view large incumbents like Netgear, compared to smaller startups like Luma? Items Mentioned In Today's Show: Nick's Fave Blog and Newsletter: Term Sheet: Dan Primack Nick's Fave Book: Man's Search For Meaning by Viktor Frankl As always you can follow Harry, The Twenty Minute VC and Nick on Twitter here! Likewise, you can follow Harry on Snapchat here for mojito madness and all things 20VC. Eve make 1 perfect mattress – made with 3 layer technology and next generation memory foam. It comes packaged in a beautiful box and arrives the day after you order. You get 100 nights to try it with free return pick-up – it really is the perfect mattress for everyone. Just go online to evemattress.co.uk and enter the code 20VC for £50 off. Everybody deserves the perfect start with Eve. Cooley are the global law firm built around startups and venture capital. Since forming the first venture fund in Silicon Valley, Cooley has formed more venture capital funds than any other law firm in the world, with 50+ years working with VCs. They help VCs form and manage funds, make investments and handle the myriad issues that arise through a fund's lifetime. So to learn more about the #1 most active law firm representing VC-backed companies going public. Head over to cooley.com and also at cooleygo.com.

16 Sep 201622min

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