May 27, 2022 · 48m · news
Aydin Senkut: How I Scaled from a $4M Angel Fund to $900M AUM | 20VC #890 · 20VC with Harry Stebbings
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of 20VC, host Harry Stebbings interviews Aydin Senkut, founder of Felicis, to explore his journey from early Google employee to scaling a premier venture capital firm. Aydin shares valuable lessons on navigating high market valuations, transitioning from angel investing to institutional fund management, and cultivating a venture culture centered on empathy and resilience.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 16.5% of the talking time here. How this is scored →
Harry as informed peer 4.4 Guest teaching 5.5 Guest disagreement 1.9 Harry pushing back 3.0
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 21:51 Aydin dismissing data-driven crossover funds at early stage
Aydin rejects Harry's concern over crossover firms, arguing that early stage investing requires artistic judgment and original thinking that mega-fund data cannot replicate.
Hardest push from Harry ▶ 20:50 Harry challenging Aydin on early-stage price inflationHarry refuses to accept a relaxed view on crossover funds, citing Coatue's London data capabilities and pressing Aydin directly on whether price inflation will squeeze Series A firms.
Biggest teaching moment ▶ 7:50 Aydin breaking down valuation compounding mathAydin educates Harry by running a compounding inflation calculation, demonstrating that today's $20M pre-money valuation is mathematically equivalent to $10M from ten years prior.
Harry holds his own ▶ 15:15 Harry pressing on board seat constraints for 40-50 leadsHarry demonstrates strong industry expertise by challenging Aydin on the physical impossibility of maintaining board seats and high touch founder support across 40 to 50 lead deals.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Aydin's Path to Venture Capital | 2 | 4 | 1 | 0 | Harry opens with an invitation for Aydin to share his path into venture capital in a few minutes. Aydin walks through his background at Google and how being an outsider forced him to start his own firm. Harry simply commiserates over early career VC rejections. | |
| Transitioning from Angel Investor to VC | 4 | 5 | 2 | 2 | Harry cites Josh Kopelman's perspective on shifting from angel investor to VC. Aydin reframes his shift as unleashing a broader, unorthodox strategy that went against standard seed-focused firm playbooks. Harry presses briefly on whether being out of standard buckets made fundraising for Fund I brutal. | |
| Navigating High Valuations and Ownership in Today's Market | 5 | 7 | 2 | 4 | Harry brings up inflated early stage valuations ($20M-$40M pre-launch) and asks how to analyze the market. Aydin educates Harry using inflation math and compounding, showing $20M today equals $10M a decade ago, and argues that company upside outweighs entry price. Harry challenges Aydin on how first-check ownership constraints factor into that logic. | |
| Deployment Pace, Scale, and Portfolio Diversification | 5 | 6 | 2 | 5 | Harry asks about compressed deployment paces dropping from multi-year cycles to 12 months. Aydin quotes Antifragile and advice from LP boards regarding stage mix and portfolio diversification across 40 to 50 companies. Harry pushes back on the operational burden of holding board seats across 40 to 50 lead investments. | |
| Crossover Funds and the Series A Landscape | 6 | 6 | 3 | 6 | Harry cites Tiger Global's markdowns and questions if crossover hedge funds will squeeze Series A VCs by entering earlier with proprietary data like Coatue's. Aydin counters that data cannot replace early qualitative judgment, operating experience, or seeing around corners. Harry challenges Aydin directly, asking if his warning on price inflation is overly negative. | |
| Building Teams and Defining Success with Empathy | 5 | 5 | 2 | 3 | Aydin describes firm scaling stages and hiring for growth mindset over pure resume metrics. Harry invokes Doug Leone's Sequoia quote that performance comes before family to probe Felicis's core principle. Aydin reframes firm culture around success with empathy. | |
| Learning from Missed Opportunities and the Art of Yes | 4 | 6 | 2 | 3 | Harry asks about past firm mistakes and lessons. Aydin shares missing Airbnb's early round due to overthinking legal risk, then educates Harry on VC as a positive outlier business where selectivity metrics matter far less than saying yes to big winners. Harry probes if major misses were close decisions or outright rejections. | |
| Portfolio Construction, LP Distributions, and Quickfire Round | 4 | 5 | 1 | 1 | Harry inquires about public stock distribution strategies for LPs and executes a quickfire round. Aydin breaks down hardware versus software recurring revenue predictability (Fitbit vs Apple/Shopify) and the ethics of stock distribution. The episode concludes with quickfire reflections on independent thinking and EQ. |
Statements from this episode (17)
Senkut: No venture firm would hire him before he launched Felicis
“I actually was thinking maybe I should work at a firm first and learn the ropes before I started. But I didn't really have a typical background and Nobody really wanted to give me a job”
Senkut: Felicis's $41M debut fund backed Rovio, Shopify, and Fitbit
“The very first fund we had was only forty one million, and we invested in Rovio in Finland from that. The whole round was bigger than our whole firm. Shopify's A round and Fitbit's B round”
Senkut: Experiencing LP fundraising is necessary for building a VC firm
“For people that get into VC and that never seen that side of it, like, some people never see the VC fundraising, and I feel it's a very necessary part of it, like, it's a very necessary part of franchise and firm building.”
Senkut: Optimizing for unlimited upside outweighs initial valuation and ownership constraints
“I think what we decided as a firm is the only thing that matters for us is to be in the world's best companies, because out of all the things that you can optimize for unlimited upside is the single most important one, right?”
Senkut: Shopify and Canva grew 10 to 20 times larger than expected
“But what I have seen with all the great companies we had, whether it be like Shopify or Canva or Adyen, it ended up being like 20 to 10 to 20 times bigger than what we expected.”
Senkut: The ideal VC fund portfolio size is 40 to 50 companies
“I really do think that in venture, the ideal size is around 40, 50 companies and not 20.”
Senkut: 2021 round sizes and valuations jumped 50% to 150% over expectations
“We had a great plan with the new fund and all of a sudden all the round sizes and valuations ended up like 50 to 150% higher than we expected.”
Stebbings: Crossover Funds Will Cause Inflation in Series A Valuations
“What happens then, I think, is they move earlier into the A, and the early B, but the A, and suddenly they jack up the prices there, because you've suddenly got this excess demand for the constrained supply of great companies, and I think we're gonna see this …”
Senkut: Crossover funds focus 99% of their investments on enterprise software
“All these people have been 99% focused on enterprise software. So any other vertical, you don't have as much impact because they're not investing in everything. They're primarily investing in enterprise software, and it might grow from there.”
Senkut: Selecting Right People Is 100x Harder Than Picking Startups
“We think that picking companies is hard. I think picking people is like a hundred times harder, right?”
Senkut: Passed on Airbnb at a $2.5M valuation cap in 2008
“I still have an email from 2008 from Brian Chesky. I didn't. We really like you. You sure you don't want to invest at like 2.5 million dollar cap, right? Like I just overthought the risk.”
Senkut: Low acceptance rates don't build great VC firms, hits do
“You cannot build a great franchise just turning down companies. You have to say yes to some great companies. Otherwise, there's no way, you know, like everybody talks about, we're so selective, you know we meet thousand companies and we only say to 10. Absolut…”
Senkut: Venture capital cannot scale without 100x to 1000x return bets
“Because if you don't get that hundred X or thousand X type of bets, you know, like, this is not a business that's gonna scale with, like, just two, three X type of investments, if you know what I mean.”
Senkut: Felicis prefers distributing post-IPO stock to LPs over managing positions
“Then I realized that our responsibility to our LPs is not managing their public stock is to be in great companies. And that's why we like to give them the stock, because listen, maybe for some, the right context is to sell the stock right then and there.”
Senkut: Felicis intentionally filled its first LP board with its toughest skeptics
“We didn't construct a board with all the LPs that were just like in our favor and just kept telling us we're doing a good job. We put the most skeptical ones on our board, the toughest ones”
Senkut: Felicis invested in Living Carbon for genetically enhanced carbon-capturing trees
“So one of the latest investments that just got public is this company called Living Carbon. So I think this area is going to be increasingly more interesting. And we said yes, because this is an amazing company that managed to biologically enhance trees to cap…”