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Jun 13, 2016 · 28m · 20vc

20VC: What LP's Want In VCs with Beezer Clarkson, Managing Director @ Sapphire Ventures

Beezer Clarkson · 17m spoken Harry Stebbings · 8m spoken
0:00 / 0:00

gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions

In this episode of The 20 Minute VC, host Harry Stebbings interviews Beezer Clarkson, Managing Director at Sapphire Ventures, to explore how institutional Limited Partners evaluate venture capital funds. Clarkson shares key insights on GP selection criteria, portfolio construction, market dynamics, and her initiative to bring industry transparency through OpenLP.

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 32.6% of the talking time here. How this is scored →

Harry as informed peer 2.2 Guest teaching 3.6 Guest disagreement 1.0 Harry pushing back 1.4
05100:0010:0020:002:17–6:15 · Harry as informed peer 1/10 Beezer Clarkson's Career Journey from Direct Investing to LP Harry asks standard career history questions regarding Beezer's transition from direct investing at HP and Omidyar Network to running DFJ's LP network. Beezer provides an overview of how evaluating different check sizes informed her understanding of fund creation.6:15–10:37 · Harry as informed peer 2/10 The LP Investment Process, Sourcing, and Fund Competition Harry draws comparisons between VC fundraising from LPs and startup fundraising from VCs. Beezer explains the structural differences, detailing allocation-constrained funds and long waitlists compared to startup rounds.10:38–14:31 · Harry as informed peer 2/10 GP Fundraising Cadence, Pitching Strategies, and LP Evaluation Harry explores what happens when GPs deploy funds ahead of schedule in two years rather than four. Beezer outlines the LP perspective on portfolio construction, stressing the necessity of transparent communication.14:34–18:53 · Harry as informed peer 2/10 Investment Committee Decisions, Best LP Practices, and Sapphire Strategy Harry questions whether LP branding is paradoxical, prompting Beezer to gently disagree by highlighting how established LPs build brand equity over decades. She also references Cambridge Associates research to explain manager selection dynamics across emerging and established funds.18:57–26:29 · Harry as informed peer 4/10 2016 Market Trends, Quick Fire Round, and OpenLP Initiative Harry presses Beezer on whether rapid early 2016 fundraising signals GP fear of market downturns. Beezer validates his market theory and discusses valuation shifts before moving into a lighthearted quick-fire discussion.2:17–6:15 · Guest teaching 3/10 Beezer Clarkson's Career Journey from Direct Investing to LP Harry asks standard career history questions regarding Beezer's transition from direct investing at HP and Omidyar Network to running DFJ's LP network. Beezer provides an overview of how evaluating different check sizes informed her understanding of fund creation.6:15–10:37 · Guest teaching 4/10 The LP Investment Process, Sourcing, and Fund Competition Harry draws comparisons between VC fundraising from LPs and startup fundraising from VCs. Beezer explains the structural differences, detailing allocation-constrained funds and long waitlists compared to startup rounds.10:38–14:31 · Guest teaching 4/10 GP Fundraising Cadence, Pitching Strategies, and LP Evaluation Harry explores what happens when GPs deploy funds ahead of schedule in two years rather than four. Beezer outlines the LP perspective on portfolio construction, stressing the necessity of transparent communication.14:34–18:53 · Guest teaching 4/10 Investment Committee Decisions, Best LP Practices, and Sapphire Strategy Harry questions whether LP branding is paradoxical, prompting Beezer to gently disagree by highlighting how established LPs build brand equity over decades. She also references Cambridge Associates research to explain manager selection dynamics across emerging and established funds.18:57–26:29 · Guest teaching 3/10 2016 Market Trends, Quick Fire Round, and OpenLP Initiative Harry presses Beezer on whether rapid early 2016 fundraising signals GP fear of market downturns. Beezer validates his market theory and discusses valuation shifts before moving into a lighthearted quick-fire discussion.2:17–6:15 · Guest disagreement 0/10 Beezer Clarkson's Career Journey from Direct Investing to LP Harry asks standard career history questions regarding Beezer's transition from direct investing at HP and Omidyar Network to running DFJ's LP network. Beezer provides an overview of how evaluating different check sizes informed her understanding of fund creation.6:15–10:37 · Guest disagreement 1/10 The LP Investment Process, Sourcing, and Fund Competition Harry draws comparisons between VC fundraising from LPs and startup fundraising from VCs. Beezer explains the structural differences, detailing allocation-constrained funds and long waitlists compared to startup rounds.10:38–14:31 · Guest disagreement 1/10 GP Fundraising Cadence, Pitching Strategies, and LP Evaluation Harry explores what happens when GPs deploy funds ahead of schedule in two years rather than four. Beezer outlines the LP perspective on portfolio construction, stressing the necessity of transparent communication.14:34–18:53 · Guest disagreement 2/10 Investment Committee Decisions, Best LP Practices, and Sapphire Strategy Harry questions whether LP branding is paradoxical, prompting Beezer to gently disagree by highlighting how established LPs build brand equity over decades. She also references Cambridge Associates research to explain manager selection dynamics across emerging and established funds.18:57–26:29 · Guest disagreement 1/10 2016 Market Trends, Quick Fire Round, and OpenLP Initiative Harry presses Beezer on whether rapid early 2016 fundraising signals GP fear of market downturns. Beezer validates his market theory and discusses valuation shifts before moving into a lighthearted quick-fire discussion.2:17–6:15 · Harry pushing back 0/10 Beezer Clarkson's Career Journey from Direct Investing to LP Harry asks standard career history questions regarding Beezer's transition from direct investing at HP and Omidyar Network to running DFJ's LP network. Beezer provides an overview of how evaluating different check sizes informed her understanding of fund creation.6:15–10:37 · Harry pushing back 1/10 The LP Investment Process, Sourcing, and Fund Competition Harry draws comparisons between VC fundraising from LPs and startup fundraising from VCs. Beezer explains the structural differences, detailing allocation-constrained funds and long waitlists compared to startup rounds.10:38–14:31 · Harry pushing back 1/10 GP Fundraising Cadence, Pitching Strategies, and LP Evaluation Harry explores what happens when GPs deploy funds ahead of schedule in two years rather than four. Beezer outlines the LP perspective on portfolio construction, stressing the necessity of transparent communication.14:34–18:53 · Harry pushing back 2/10 Investment Committee Decisions, Best LP Practices, and Sapphire Strategy Harry questions whether LP branding is paradoxical, prompting Beezer to gently disagree by highlighting how established LPs build brand equity over decades. She also references Cambridge Associates research to explain manager selection dynamics across emerging and established funds.18:57–26:29 · Harry pushing back 3/10 2016 Market Trends, Quick Fire Round, and OpenLP Initiative Harry presses Beezer on whether rapid early 2016 fundraising signals GP fear of market downturns. Beezer validates his market theory and discusses valuation shifts before moving into a lighthearted quick-fire discussion.

speaking balance: gold is Harry, purple is the guest (3 minute bins)

0:00 · Harry 84.4% · guest 15.6%0:00 · Harry 84.4% · guest 15.6%3:00 · Harry 9.6% · guest 90.4%3:00 · Harry 9.6% · guest 90.4%6:00 · Harry 29.8% · guest 70.2%6:00 · Harry 29.8% · guest 70.2%9:00 · Harry 16.1% · guest 83.9%9:00 · Harry 16.1% · guest 83.9%12:00 · Harry 28.6% · guest 71.4%12:00 · Harry 28.6% · guest 71.4%15:00 · Harry 15.8% · guest 84.2%15:00 · Harry 15.8% · guest 84.2%18:00 · Harry 25.1% · guest 74.9%18:00 · Harry 25.1% · guest 74.9%21:00 · Harry 14.9% · guest 85.1%21:00 · Harry 14.9% · guest 85.1%24:00 · Harry 36.2% · guest 63.8%24:00 · Harry 36.2% · guest 63.8%27:00 · Harry 100% · guest 0%27:00 · Harry 100% · guest 0%
Sharpest disagreement ▶ 18:21 Challenging the paradox of LP branding

Beezer pushes back on Harry's assertion that LP branding is paradoxical, arguing that long-tenured LPs establish clear brands through decades of market presence.

 Hardest push from Harry ▶ 20:12 Pressing on GP market timing motives

Harry challenges Beezer's observation about fast fundraising cycles by framing it as GP panic to raise money before macro storm clouds hit.

 Biggest teaching moment ▶ 15:37 Cambridge Associates data on emerging managers

Beezer educates Harry on LP portfolio strategy by citing Cambridge Associates studies showing emerging managers span both top and bottom performance quartiles.

 Harry holds his own ▶ 20:12 Framing 2016 fundraising as pre-storm panic

Harry demonstrates market insight by correctly identifying that rapid GP fundraising cycles in early 2016 reflected GP urgency ahead of expected valuation drops.
the scores for every segment, with the reasoning behind each
ChapterTopicHarry as informed peerGuest teachingGuest disagreementHarry pushing backWhy
Beezer Clarkson's Career Journey from Direct Investing to LP 1300 Harry asks standard career history questions regarding Beezer's transition from direct investing at HP and Omidyar Network to running DFJ's LP network. Beezer provides an overview of how evaluating different check sizes informed her understanding of fund creation.
The LP Investment Process, Sourcing, and Fund Competition 2411 Harry draws comparisons between VC fundraising from LPs and startup fundraising from VCs. Beezer explains the structural differences, detailing allocation-constrained funds and long waitlists compared to startup rounds.
GP Fundraising Cadence, Pitching Strategies, and LP Evaluation 2411 Harry explores what happens when GPs deploy funds ahead of schedule in two years rather than four. Beezer outlines the LP perspective on portfolio construction, stressing the necessity of transparent communication.
Investment Committee Decisions, Best LP Practices, and Sapphire Strategy 2422 Harry questions whether LP branding is paradoxical, prompting Beezer to gently disagree by highlighting how established LPs build brand equity over decades. She also references Cambridge Associates research to explain manager selection dynamics across emerging and established funds.
2016 Market Trends, Quick Fire Round, and OpenLP Initiative 4313 Harry presses Beezer on whether rapid early 2016 fundraising signals GP fear of market downturns. Beezer validates his market theory and discusses valuation shifts before moving into a lighthearted quick-fire discussion.

Statements from this episode (8)

Disclosure
Sapphire Ventures targets early-stage Series A funds in US, Europe, Israel
“We at Sapphire focus on early stage firms, US, Europe, and Israel, predominantly folks with series A exposure.”
Beezer Clarkson Jun 13, 2016 ▶ 6:44
Assertion Partly supported
Clarkson: The early-stage VC fund universe numbers in hundreds, not thousands
“There are probably even fewer funds than there are firms, than there are startups, so that database doesn't, it's hundreds, but it's not thousands.”
Beezer Clarkson Jun 13, 2016 ▶ 6:59
Disclosure
Clarkson: LPs evaluate VCs based on why founders choose their capital
“I always want to know why you, because for me, that captures the, have you thought about who you are as an investor, what you want to invest in, and why the entrepreneur is going to pick you versus all the other sources of capital that are available in the mar…”
Beezer Clarkson Jun 13, 2016 ▶ 13:50
Insight
Clarkson: Institutional LPs are "like snowflakes" with unique investment criteria
“LPs are like snowflakes, and everyone's a bit different”
Beezer Clarkson Jun 13, 2016 ▶ 14:13
Insight
Clarkson: Top LPs and VCs invest consistently rather than timing markets
“One is a commitment to the asset class over time, that timing of the market doesn't seem to be something anybody suggests. And instead it's the, you have to invest consistently over time year after year after year. So the great LPs and the great VCs do the sam…”
Beezer Clarkson Jun 13, 2016 ▶ 15:46
Assertion Supported
Clarkson: Emerging VC managers dominate both top and bottom performance tiers
“You will see that what is considered emerging managers, and these are venture funds that are on their first through fourth fund cycles. Are always represented in the best and the worst performing managers, and then the established funds, the ones who are vinta…”
Beezer Clarkson Jun 13, 2016 ▶ 16:13
Assertion Supported
Clarkson: Q1 2016 venture fundraising heavily favored established $500M+ funds
“2016 is a really interesting year. It's been something we've called the year of the haves and the have-nots, and it's still far from played out, but you've seen just an incredible amount of money being raised very quickly in the first quarter And when you dive…”
Beezer Clarkson Jun 13, 2016 ▶ 19:05
Disclosure
Sapphire Ventures recently backed a sub-$200M Bay Area Series A fund
“The most recent investment decision we made is to a fund that sits smack in our sweet spot, so it's a Bay Area based Series A fund. It's sub two hundred million, so he kind of falls into that right-sized number because they also have a only a couple of the GPs…”
Beezer Clarkson Jun 13, 2016 ▶ 25:36
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