limited partner

“It's a fair question, and I wish I had a better answer, but once you get into the mechanics of how a venture fund works in terms of the way limited partners give you money, the way that you deal with taxes, etc., it is very difficult to innovate at all on the …”

“The average LP will add one new manager every two to three years.”

“At first round, over 70% of our limited partners are non-profit”

“Because at the end of the day, an LP that's deciding whether to invest in venture wants outsized multiple performance, I think generally above a three X net, and the math is just harder in order to get there, particularly as fund size increases.”

“If I'm an LP, and I want to be competitive over the next 10 to 20 years, I better be extra nice, have fun with my GPs, and be available to answer questions around fund management, connecting them to new people, giving hard feedback when it's needed, but being …”

“In 2008, the Kauffman report came out, and it basically said to LPs, you should only be in the top decile of VC managers. It's a fantastic asset class, but only if you're in the elite.”

“If a GP has the ability to close with an LP, if an LP wants to give a GP money, take the money. That's always been my philosophy and approach.”

“I think a better way to think about it is, how much is the commit relative to what the nest egg is for the GP? How much is the GP going to actually feel this one, two, three percent?”

“And a lot of this thinking started when the fund sizes started to become large and people started living off of the management fees. So the incentives started to diverge from the limited partners incentives, and people started thinking of it as an investing bu…”

“If you were a LP that had been exposed to venture capital for the past 30 years, it'd be interesting, you would notice that some of your biggest gains were the years right prior to the resets, in like, oh, one and oh, nine.”

“It is some level of delusion. If you actually believe That all of these companies are worth what they were worth six months ago, then and you're saying that with a straight face to your limited partners, and I think you're losing trust, right? A hundred percen…”

“I think one is like on AngelList now, there's really no excuse not to have some kind of track record before you go talk to an institutional LP.”

“I remember an LP telling me a long, long time ago, like just when I was starting that typically they'll stay with good managers for five funds and they assume that three of them will be so, so maybe two to three X funds. One of them will be a complete turd and…”

“I meet two new LPs every single week, even when I'm not raising, because I think if you ever meet them when you're raising for the first time, you've got no chance.”

“If you go meet an institutional LP, they're predisposed to passing on your first fund, primarily out of the fact of like, they probably don't think you're going to raise your first fund or deploy it well, if you do.”

“I think that like, if you're not getting name checked by institutional LPs and other people aren't talking about what you're doing, it's almost impossible to raise institutional capital, whether it's a three million dollar check or thirty million dollar check …”

“I wouldn't be shocked if that evaporates in the next 12 months. If the appetite for the new, the next one just is, is gone. If it's just evaporates at the LP level”

“If you're not growing, I think it makes sense to mark it down. If it's growing at a decent rate, I think if you're not Fidelity or a late stage investor, I think it's a waste of your time to mark up or mark down because I asked all my LPs this question. They s…”

“So one LP will purchase another LP's position and the range of discount that we're seeing actually is anywhere from. But what's more common Is actually 40% or 50% from last round mark. And so you're talking about a pretty significant discount to last round val…”

“When it comes to LPs within funds, we've definitely seen an increase in appetite to sell positions. And also sometimes sell positions and name brand, you know, name brand companies that are actually just great companies.”

“I have a basic belief that it never hurts to ask twice, but I never ask three times, right? So if there's an email that doesn't get responded to, I don't feel bad about asking again. After two, after I'm ignored twice, that's okay. I just move on.”

“The number one factor in, in whether an LP says yes or no is just timing, right?”

“We have since changed that where we do have a data room, but the data room is a preliminary data room and it is intentionally incomplete. And the reason it's intentionally incomplete is I want to see an LP. If we offer the data room, I want to know they looked…”

“So I meet two new LPs every single week when I'm not fundraising. At the end of each meeting, I asked for two new LP intros. They make them, so I have a flywheel of four new LPs per week.”

“It's an easy job and that it's very, very slow, but it's very hard to get good at it, right? It's very, it's another order of magnitude slower feedback loop than venture, which is pretty slow.”

“Most funds, I mean, when you're big, it's different, but most funds that aren't huge have a few core anchors, right? They really do. And typically those relationships are trust driven, right? They are trust driven. That's why they're anchors. The rest, it is t…”

“I don't think that they spend enough cycles on it. But I actually think some of the great ones do.”

“A lot of LPs also pre-spent future budgets, if that makes any sense. If you were raising a fund every 18 months, and I thought you were raising every three years, I had two choices. Either I pull from future year budgets, or I reduce my check so that I stay co…”

“That's not true. I think LPs are being more selective and making new investments. I know we are, I know others that are, They're absolutely making new investments.”

“And I've heard LPs that used to say, hold on to all your winners all the time are now saying, well, I meant that. But in context, there are times when it could be useful.”

“If you're an LP that has a, as a sort of existing book of venture business, and you've got it over different times, you will a hundred percent see that people will value their companies differently.”

“The last thing, and they'll, they'll cut corners, and they'll invest in someone that didn't finish high school, and they'll invest in the 10,000th, whatever, but if they're, if they perceive an edge, they'll take the risk at the, rather than the person that sl…”

“I mean, I think probably in 2016, 17, like a lot of funds were really oversubscribed quickly, but being in that moment where the power shifts, where there's a dearth of capital on the LP side, and there's that, that is a ideal time to scale a program. To build…”

“From an LP's perspective, the way that you're able to do that is to make sure that you are investing consistently across every vintage. You're not trying to time the market.”

“I'm pretty worried for venture as an asset class. I think 21 will be some pretty bad numbers and a really shitty vintage, and I think people are artificially keeping numbers high, and I don't think LPs have quite the understanding of how bad it is.”

“What you tell your LP is, just make sure you stick to it and do it. That's actually the best advice I can give for any emerging fund manager. It's like, look, define what you're gonna do, and do exactly that, and don't go out, don't go, don't stray from it at …”

“The returns mightn't be three X venture returns, but you know, the competition is the small cap return of 11%. You know, if you're delivering high, mid, high teens, it may be that the LPs think that's great, and that's the bet they're taking.”

“Yeah. Yeah. Yeah. I mean, best case scenario, you don't have anyone more than 10%, but if you're raising a fifty million dollar fund or a hundred million dollar fund and you can, you know, secure a 10, 20, thirty million dollar check and they're long term alig…”

“If you're an LP and you want to be in the early stage fund, you will often, very often with top tier brands, have to put in two times that into another fund to get that one dollar in the other, and you don't get your pick of which fund. Very often you have to …”

“I just don't know that there's this massive DPI pressure. If you have a hot, if you have a hot hand.”

“I see that appetite having faded since 2021, and I do not see a resurgence of finding tiny new managers.”

“I do think that investors are very, very, very focused on DPI now.”

“If I'm a limited partner and I have distributed my venture allocation evenly, I wouldn't sleep well at night.”

“LPs are uncomfortable with change. LPs say that they're looking at the new generation and the Vanguard. But they are comfortable when the old leadership is still actively involved in the fund. It does make LPs more comfortable whether they're writing, investin…”

“It's entirely plausible that 10 super big exits cover the entire nut from the LP perspective, such that it's still a good business.”