#112 VC/LP Takes on The Market (November)

Hi everyone! đź‘‹ We’ve published >100 posts - appreciate the support/ sharing w/ friends! Welcome to our new members of @TheFundCFO crew! We recently launched a paid tier and released our VC Fund Playbook + Models @ Streamlined.Fund! Re-linking top posts: #96 The Case for 30+ Co.'s Per VC Fund, #88 Latest Takes on the State of VC, #86 VC Fund Stacks, and Full CFO Archive.

There’s a lot of great content from notable VCs, LPs, and CFOs/finance pros on the internet. Here, we’re focused on pulling out the insights out that really matter, as well as finding the most current content that overlays historical lessons with current market dynamics, which are changing faster than ever.

Every Tuesday/Thursday, we bring you actionable tools, real-world experiences, and insider insights for #VC CFOs/Finance Pros and fund managers, #LP investors, and industry enthusiasts/people who want to learn :). As a reminder:

  • Tuesday: insights + interviews. Free for everybody.

  • Thursday: deeper dives on VC GPs, CFO/COO strategy, more insights from LPs/GPs, and our take on what it all means (from 15+ yrs. of experience). Exclusive to Paid subscribers (most of whom expense these insights).

“I’ve failed over & over again in life. And that is why I succeed.” -Michael Jordan

Welcome - Wimberley Valley Chamber of Commerce

Last week, we shared our top posts from October (+September) - these ones really resonated with thousands of views, shares, and feedback! Please do us a favor and like/share if you haven’t already (or forward to a friend). In the meantime, enjoy! Re-linking here for reference!

Erik Torenberg & David Weisburd’s Turpentine VC podcast shares VC insights (often associated with the world’s top funds). Here’s why this is important:

  • Venture capital is one of the only asset classes in the world where the asset selects its investor (*great founders choose who they want to work with).

  • đź’° There is a shortage of outlier entrepreneurs but no shortage of capital (there was over $200bn invested in 2022 (*this was down from $750bn in 2021).

  • 🌍 The top 20-40 VC funds globally (out of 8000+) make up an astonishing share of the *distributed* returns…

  • đź“Š An easy way to visualize how concentrated the industry is, is to look at the pre-IPO cap tables of some of the world’s TOP listed software companies.

  • 🕵️‍♀️The same names always appear (Sequoia, USV, Accel, A16Z, Benchmark, Kleiner Perkins, Battery, Index, Greylock, Iconiq, NEA, Bessemer etc).

  • 🏆These firms have specific partners who have built reputations as experts in specialist fields & have the benefit of being the entrepreneur’s “chosen ones” -a luxury for a VC investor

  • 🤝 “Winning” a deal is one of the most difficult aspects of the VC courtship - alongside sourcing, picking & “adding value”!

All those interviewed have differing views on everything from ownership, follow-ons & portfolio construction. There is no one-size-fits-all in VC!

There are very few firms in venture capital that have a history as rich as Kleiner Perkins. Having backed iconic companies such as Genetech, Sun, Amazon, Google, Twitter, Lotus, EA, Compaq, etc., KP is without a doubt of the small handful of firms we consider when thinking about the early history of VC. More recent investments include Figma and Rippling.

Mamoon Hamid took the reins at Kleiner in 2017to go "back to the future". It was a fascinating conversation where we had a few themes:

  1. Going back to basics, and focusing on what you are uniquely positioned to succeed at. While many firms added many new products in the lead up to the peak of 2021, KP embraced essentialism, and went back to fewer products to improve firm-business model fit and focus.

  2. The need to have a clear culture and values, and using these values as a core component of hiring and maintaining cohesive teams.

  3. Why VC firms need clear OKRs to understand the quality of execution (hint: these OKRs are not just related to returns which take many, many years to become clear, but OKRs that help provide the necessary inputs to measure interim proof points).

Chart of the Day (James Heath) - Series A Valuations

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That’s all for today folks! Thanks for your support and spreading the word! Share this on Twitter or LinkedIn to help grow “the crew!”