20VC: Semil Shah on How To Raise An Institutional Venture Fund, Why LPs Mostly Have Reserve Allocation Theory Wrong & Why IPOs and Acquisitions Are Severely Constrained

Semil Shah is the founder of Haystack, an early stage investment firm now investing out of it’s fourth fund, with previous investments in the likes of Instacart, DoorDash, Giphy, OpenDoor & Managed by Q. Semil is also a Venture Partner @ GGV Capital, one of the leading multi-stage funds and in the past he has also been a consultant to the likes of Kleiner Perkins, DFJ, General Catalyst and more. If that was not enough, Shah also has an extensive career in media having been a contributor for both TechCrunch and the Harvard Business Review in the past. Due to all of this, Shah is known for being on the speed dial of some of the industry’s most respected VCs with the likes of Marc Andreessen naming him one of his ’55 Unknown Rockstars in Tech’. In Today’s Episode You Will Learn: 1.) How Semil made the transition from the world of writing to investing alongside some of the best in venture with Haystack? 2.) Why do more and more managers want to introduce institutional capital into their LP base? What are the advantages? What are the drawbacks? Where does Semil see most managers going wrong when pursuing institutional capital for the first time? 3.) What does Semil mean when he states the importance of "pre-marketing"? How open is one in these pre-discussions with potential LPs? What is the right amount of time to be pre-marketing for? How does Semil determine whether to adopt a piece of LP advice and when not to? 4.) In the raising process, why does Semil never like to the use the deck when meeting in person? What core elements of the presentation did LPs always hone in on? What tips does Semil have to potential managers to ensure they can pitch at any time, not just the boardroom? 5.) How has moving from non-institutional to institutional fund, changed how Semil thinks about reserve allocation? Why does Semil believe that the majority of LPs have a wrong thesis to reserve allocation? 6.) Why does Semil believe the VC business model is severely constrained in terms of exits through IPO and acquisition? What does this mean for the use of secondaries? How will managers need to incorporate this into their strategy? Items Mentioned In Today’s Show: Semil’s Fave Blog: AVC  Semil’s Most Recent Investment: Ironclad As always you can follow Harry, The Twenty Minute VC and Semil on Twitter here! Likewise, you can follow Harry on Snapchat here for mojito madness and all things 20VC. Lattice is the #1 performance management solution for growing companies. With Lattice, it’s easy to launch 360 performance review cycles as often as you want. And you also get a continuous feedback system with OKR goal tracking, real-time feedback, and 1-on-1 meetings to make sure employees get feedback between reviews. Find out why the likes of CoinBase, PlanGrid, Birchbox and WePay trust Lattice as their performance management solution by heading over to lattice.com to start investing in your people. That’s Lattice.com. Recurly, the company powering subscription success, with Recurly’s enterprise-class subscription management platform providing rapid time-to-value without requiring massive integration effort and expense and they have the ability to not only increase revenue by 7% but also reduce the all-important churn rate. That is why thousands of customers from Twitch to HubSpot to CBS Interactive trust Recurly as their subscription management platform. Check them out on recurly.com that really is a must.