Hi Everyone! 👋 Welcome to the new members of @TheFundCFO crew! We recently launched a paid tier and released our VC Fund Playbook + Models @ Streamlined.Fund! Re-linking some top 2023 posts: #67 Top VC CFO Posts & References & #65: WTF is Going On in VC (+ New Fund Model Data).

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).

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“The hard days are what make you stronger.” -Aly Raisman

VC Deep Dive: Fresh Takes From Top VCs

Dear readers, thanks for all the great feedback on our recent VC deep dive posts! We’ve gone deep on some notable VCs & unpacked some insights around building generational firms (#89 VC Deep Dive: Brad Gurley (Benchmark) + David Sacks (Craft) & #87 VC Deep Dives & Building Generational Firms). “Now more than ever, VC firms need to think strategically about their business model.”

There’s a lot of great content from notable VCs, LPs, and CFOs/finance pros on the internet if you look hard enough. The challenge this newsletter tries to overcome is 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.

Today, we’ll share some recent insights from Charles Hudson (Precursor Ventures), Jeff Morris Jr. (Chapter One), and Fred Wilson (USV).

Insights from Charles Hudson (Precursor) to VCs Launching

I started as a professional LP in 2010, investing in >100 PE/VC funds and meeting with thousands. I often reference past meeting notes and see how they map to what really has happened more than a decade later. One VC that continues to give great insights is Charles Hudson, who I met in the mid-2010’s. He recently wrote the following post which I highly recommend reading (key takeaways below):

The number one piece of advice I give to new VCs launching their investing careers

Unlike operating jobs, the feedback cycle on most venture investments is really long and winding; it often takes a very long time for the best investments to mature, and it takes many people some time to see enough companies to know what good looks like. Resisting the urge to simply do something (the classic difference between activity and productivity) is hard to overcome, but most people are well served by taking things slowly at first.

Here are my top takeaways from Charles’ recent post and former writings:

1. Access - Do you have access to companies that are good investments?

1. Judgment - Do you have the ability to determine the set of companies where you should focus your time and attention? The better the pool of companies you see, the harder it is to tell the difference between merely good and great companies.

2. Discretion - Do you have a sense for which companies to elevate for discussion and consideration; this is a combination of access and judgment, and I think it’s an essential skill when working in a partnership.

Charles writes that most venture funds evaluate new check writing investors along these three dimensions.

I’d add a fourth dimension here - winning. When you decide you want to invest in a company, how do you “win” the opportunity to invest? Founders must believe that you / your firm will add value and help them achieve a successful outcome. At the early stage, helping companies iterate rapidly to find product-market-fit is crucial.

Charles has previously noted that “product velocity, or the ability to turn investor dollars into a product with strong product-market fit, is the most significant predictor of future success. We invest in pre-launch companies, so I am betting that the people we back will be able to build what they outlined when we met. “

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