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Jul 25, 2016 · 23m · 20vc

20VC: Semil Shah on Why The Most Important Thing An Investor Can Do Is Attract Follow On & The Fundamentals of VC Branding

Semil Shah · 14m spoken Harry Stebbings · 7m spoken
0:00 / 0:00

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In this episode of The 20 Minute VC, host Harry Stebbings interviews Semil Shah, founder of Haystack, about the mechanics of building a micro-VC fund, seed-stage portfolio construction, and the art of helping startups secure follow-on capital. Semil also highlights how authentic personal branding and radical candor drive meaningful investor value.

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 34.3% of the talking time here. How this is scored →

Harry as informed peer 2.8 Guest teaching 4.7 Guest disagreement 2.7 Harry pushing back 2.3
05100:0010:0020:001:48–4:12 · Harry as informed peer 1/10 Guest Welcome and Haystack Origin Story Harry introduces Semil warmly and asks about the origin story of Haystack. Semil mildly pushes back on Harry's assumption that launching a fund was a 'momentous challenge', clarifying that he simply had no other career options.4:12–6:56 · Harry as informed peer 2/10 Fundraising Realities and LP Capital Dynamics Semil explains LP dynamics, check sizes, and fund mechanics candidly, noting he failed his initial targets. He interrupts Harry's question to ask for clarification on which fund's LPs Harry is referring to.6:56–10:21 · Harry as informed peer 5/10 Seed-Stage Portfolio Strategy and AngelList Dynamics Harry offers sharp pushback, challenging whether Semil's small check size strategy dilutes ownership to the point of unmeaningful returns. Semil educates Harry on traditional LP biases versus successful high-volume seed models like YC and AngelList.10:21–13:36 · Harry as informed peer 3/10 Guide to Series A Transitions and Seed Syndication Semil details his coaching process for guiding seed companies into Series A rounds and his informal syndication network. The exchange is collaborative with Semil offering insights on relationship-driven fundraising.13:36–15:53 · Harry as informed peer 4/10 The Role of Authenticity and VC Brand Building Harry cites Mark Suster's deliberate branding strategies to ask about VC brand building. Semil provides an insightful definition of brand as a mental shortcut, but forcefully rejects Harry's framing of follow-on support as a VC 'value add'.15:53–22:00 · Harry as informed peer 2/10 Redefining Founder Friendliness Through Radical Candor Semil redefines 'founder friendliness' as giving uncomfortable honesty rather than walking on eggshells. The segment concludes with a rapid-fire Q&A where Semil shares quick takes on tech trends and favorite VCs.1:48–4:12 · Guest teaching 3/10 Guest Welcome and Haystack Origin Story Harry introduces Semil warmly and asks about the origin story of Haystack. Semil mildly pushes back on Harry's assumption that launching a fund was a 'momentous challenge', clarifying that he simply had no other career options.4:12–6:56 · Guest teaching 5/10 Fundraising Realities and LP Capital Dynamics Semil explains LP dynamics, check sizes, and fund mechanics candidly, noting he failed his initial targets. He interrupts Harry's question to ask for clarification on which fund's LPs Harry is referring to.6:56–10:21 · Guest teaching 7/10 Seed-Stage Portfolio Strategy and AngelList Dynamics Harry offers sharp pushback, challenging whether Semil's small check size strategy dilutes ownership to the point of unmeaningful returns. Semil educates Harry on traditional LP biases versus successful high-volume seed models like YC and AngelList.10:21–13:36 · Guest teaching 4/10 Guide to Series A Transitions and Seed Syndication Semil details his coaching process for guiding seed companies into Series A rounds and his informal syndication network. The exchange is collaborative with Semil offering insights on relationship-driven fundraising.13:36–15:53 · Guest teaching 5/10 The Role of Authenticity and VC Brand Building Harry cites Mark Suster's deliberate branding strategies to ask about VC brand building. Semil provides an insightful definition of brand as a mental shortcut, but forcefully rejects Harry's framing of follow-on support as a VC 'value add'.15:53–22:00 · Guest teaching 4/10 Redefining Founder Friendliness Through Radical Candor Semil redefines 'founder friendliness' as giving uncomfortable honesty rather than walking on eggshells. The segment concludes with a rapid-fire Q&A where Semil shares quick takes on tech trends and favorite VCs.1:48–4:12 · Guest disagreement 2/10 Guest Welcome and Haystack Origin Story Harry introduces Semil warmly and asks about the origin story of Haystack. Semil mildly pushes back on Harry's assumption that launching a fund was a 'momentous challenge', clarifying that he simply had no other career options.4:12–6:56 · Guest disagreement 3/10 Fundraising Realities and LP Capital Dynamics Semil explains LP dynamics, check sizes, and fund mechanics candidly, noting he failed his initial targets. He interrupts Harry's question to ask for clarification on which fund's LPs Harry is referring to.6:56–10:21 · Guest disagreement 3/10 Seed-Stage Portfolio Strategy and AngelList Dynamics Harry offers sharp pushback, challenging whether Semil's small check size strategy dilutes ownership to the point of unmeaningful returns. Semil educates Harry on traditional LP biases versus successful high-volume seed models like YC and AngelList.10:21–13:36 · Guest disagreement 1/10 Guide to Series A Transitions and Seed Syndication Semil details his coaching process for guiding seed companies into Series A rounds and his informal syndication network. The exchange is collaborative with Semil offering insights on relationship-driven fundraising.13:36–15:53 · Guest disagreement 4/10 The Role of Authenticity and VC Brand Building Harry cites Mark Suster's deliberate branding strategies to ask about VC brand building. Semil provides an insightful definition of brand as a mental shortcut, but forcefully rejects Harry's framing of follow-on support as a VC 'value add'.15:53–22:00 · Guest disagreement 3/10 Redefining Founder Friendliness Through Radical Candor Semil redefines 'founder friendliness' as giving uncomfortable honesty rather than walking on eggshells. The segment concludes with a rapid-fire Q&A where Semil shares quick takes on tech trends and favorite VCs.1:48–4:12 · Harry pushing back 1/10 Guest Welcome and Haystack Origin Story Harry introduces Semil warmly and asks about the origin story of Haystack. Semil mildly pushes back on Harry's assumption that launching a fund was a 'momentous challenge', clarifying that he simply had no other career options.4:12–6:56 · Harry pushing back 2/10 Fundraising Realities and LP Capital Dynamics Semil explains LP dynamics, check sizes, and fund mechanics candidly, noting he failed his initial targets. He interrupts Harry's question to ask for clarification on which fund's LPs Harry is referring to.6:56–10:21 · Harry pushing back 6/10 Seed-Stage Portfolio Strategy and AngelList Dynamics Harry offers sharp pushback, challenging whether Semil's small check size strategy dilutes ownership to the point of unmeaningful returns. Semil educates Harry on traditional LP biases versus successful high-volume seed models like YC and AngelList.10:21–13:36 · Harry pushing back 1/10 Guide to Series A Transitions and Seed Syndication Semil details his coaching process for guiding seed companies into Series A rounds and his informal syndication network. The exchange is collaborative with Semil offering insights on relationship-driven fundraising.13:36–15:53 · Harry pushing back 3/10 The Role of Authenticity and VC Brand Building Harry cites Mark Suster's deliberate branding strategies to ask about VC brand building. Semil provides an insightful definition of brand as a mental shortcut, but forcefully rejects Harry's framing of follow-on support as a VC 'value add'.15:53–22:00 · Harry pushing back 1/10 Redefining Founder Friendliness Through Radical Candor Semil redefines 'founder friendliness' as giving uncomfortable honesty rather than walking on eggshells. The segment concludes with a rapid-fire Q&A where Semil shares quick takes on tech trends and favorite VCs.

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

0:00 · Harry 73.9% · guest 26.1%0:00 · Harry 73.9% · guest 26.1%3:00 · Harry 31% · guest 69%3:00 · Harry 31% · guest 69%6:00 · Harry 14.3% · guest 85.7%6:00 · Harry 14.3% · guest 85.7%9:00 · Harry 21.3% · guest 78.7%9:00 · Harry 21.3% · guest 78.7%12:00 · Harry 30.9% · guest 69.1%12:00 · Harry 30.9% · guest 69.1%15:00 · Harry 20.3% · guest 79.7%15:00 · Harry 20.3% · guest 79.7%18:00 · Harry 20.3% · guest 79.7%18:00 · Harry 20.3% · guest 79.7%21:00 · Harry 68.8% · guest 31.2%21:00 · Harry 68.8% · guest 31.2%
Sharpest disagreement ▶ 15:53 Rejecting the Conventional 'Founder Friendly' Label

Semil explicitly rejects the host's premise that conventional founder friendliness is positive, arguing that most investors walk on eggshells and lie to founders out of fear.

 Hardest push from Harry ▶ 6:56 Challenging Portfolio Return Math

Harry directly challenges Semil's core strategy, pressing whether writing small seed checks leaves him with unmeaningful ownership that fails to drive fund returns.

 Biggest teaching moment ▶ 7:05 Deconstructing LP Seed Biases vs Disruptive VC Models

Semil provides a masterclass on LP mental models, explaining why traditional investors misjudge high-volume seed portfolios compared to modern platform models like AngelList, YC, and First Round.

 Harry holds his own ▶ 14:30 Citing Suster's Snapstorms on VC Branding

Harry demonstrates strong industry context by bringing up Mark Suster's deliberate Snapstorm strategy to probe the rising phenomenon of celebrity VC branding.
the scores for every segment, with the reasoning behind each
ChapterTopicHarry as informed peerGuest teachingGuest disagreementHarry pushing backWhy
Guest Welcome and Haystack Origin Story 1321 Harry introduces Semil warmly and asks about the origin story of Haystack. Semil mildly pushes back on Harry's assumption that launching a fund was a 'momentous challenge', clarifying that he simply had no other career options.
Fundraising Realities and LP Capital Dynamics 2532 Semil explains LP dynamics, check sizes, and fund mechanics candidly, noting he failed his initial targets. He interrupts Harry's question to ask for clarification on which fund's LPs Harry is referring to.
Seed-Stage Portfolio Strategy and AngelList Dynamics 5736 Harry offers sharp pushback, challenging whether Semil's small check size strategy dilutes ownership to the point of unmeaningful returns. Semil educates Harry on traditional LP biases versus successful high-volume seed models like YC and AngelList.
Guide to Series A Transitions and Seed Syndication 3411 Semil details his coaching process for guiding seed companies into Series A rounds and his informal syndication network. The exchange is collaborative with Semil offering insights on relationship-driven fundraising.
The Role of Authenticity and VC Brand Building 4543 Harry cites Mark Suster's deliberate branding strategies to ask about VC brand building. Semil provides an insightful definition of brand as a mental shortcut, but forcefully rejects Harry's framing of follow-on support as a VC 'value add'.
Redefining Founder Friendliness Through Radical Candor 2431 Semil redefines 'founder friendliness' as giving uncomfortable honesty rather than walking on eggshells. The segment concludes with a rapid-fire Q&A where Semil shares quick takes on tech trends and favorite VCs.

Statements from this episode (14)

Insight
Semil Shah: Emerging VCs Must Build an Independent Track Record First
“No one's going to believe that you can generate deal flow and pick from the deal flow and do that in a sustainable way unless you do it because other people won't believe that you can do it.”
Semil Shah Jul 25, 2016 ▶ 2:55
Disclosure
Semil Shah Targeted $5M for Haystack Fund I But Raised $1M
“I tried to raise five, and I could only raise one.”
Semil Shah Jul 25, 2016 ▶ 4:22
Disclosure
Semil Shah Failed to Reach His Target Goal for Every Haystack Fund
“I've been unsuccessful in raising my target for every fund.”
Semil Shah Jul 25, 2016 ▶ 5:00
Insight
Semil Shah: LPs Avoid Checks Under $5M or Owning Over 10%
“Most of the people that have capital, it's not really in their interest to write checks that are smaller than five million dollars, so to speak, give or take, and then most sophisticated investors don't want to be more than 10% of a fund.”
Semil Shah Jul 25, 2016 ▶ 5:16
Opinion
Semil Shah: Y Combinator Has the Best Network Effect in Venture
“Like Combinator, which is basically the best network effect in a venture model that I've ever seen, and First Round Capital, which created a platform to basically connect founders and teams on a one-to-one basis.”
Semil Shah Jul 25, 2016 ▶ 8:08
Disclosure
Semil Shah: Some Founders Refuse to Raise via AngelList Syndicates
“And so people can either pre-fund me or have work, can go on a deal by deal basis, but I don't bring everything to AngelList. Even though I'm a big AngelList fan, sometimes entrepreneurs, for whatever reason right now, don't want, even in a private syndicate, …”
Semil Shah Jul 25, 2016 ▶ 8:53
Insight
Semil Shah: Abundant Capital Shifted Seed Fundraising to a Relationship Game
“There's so much money in seed that the boiling point is that it goes from becoming a market-based game to a relationship game, and a lot of people can't make that transition.”
Semil Shah Jul 25, 2016 ▶ 10:54
Disclosure
Semil Shah Maintains a Core Network of 80 Investors for Co-Investments
“I keep a very tight network of about 80 seed investors, angels that I know, larger VCs, and kind of executives at companies that I've all Invested with in some way or worked with in some way, and if there's ever room in any of the companies that I'm investing …”
Semil Shah Jul 25, 2016 ▶ 11:38
Assertion Not checkable as stated
Semil Shah: Series A and B Funds Cannot Afford to Share Deals
“Series A and B investing is. Those funds cannot afford to share deals, it cannot afford to not get as much ownership as possible.”
Semil Shah Jul 25, 2016 ▶ 11:58
Insight
Semil Shah: Startups Reach Series A Through Momentum or Investor Tracking
“The companies that do either fit one of two characteristics. One is that they're off to the races, and people are dying to invest in them because of the quality of the team, or the opportunity, or the market. The second category, the one that I explain I spend…”
Semil Shah Jul 25, 2016 ▶ 12:27
Insight
Semil Shah: Attracting Follow-On Capital Is an Investor's Top Priority
“Probably the most important thing any investor can do is attract follow-on capital for their investments.”
Semil Shah Jul 25, 2016 ▶ 15:28
Opinion
Semil Shah: VCs Misuse 'Founder Friendly' to Avoid Giving Honest Feedback
“I think in the way people think of founder friendly, I am not. People think founder friendly is like they walk on eggshells around other people so that they don't piss somebody off, even the founder. They're so nervous about losing deal flow or getting a negat…”
Semil Shah Jul 25, 2016 ▶ 15:56
Opinion
Semil Shah: First Round's Josh Koppelman Is an Underrated Investing Genius
“I think Josh Koppelman is an investing genius, doesn't get as much of the credit as most LPs think he's a genius, and I think he is as well.”
Semil Shah Jul 25, 2016 ▶ 20:36
Assertion Supported
Semil Shah: Fred Wilson Returned Far More Than $1B at USV
“Fred Wilson, probably five funds with Unisquare Ventures, probably all under two hundred million, so he's invested probably less than a billion dollars and has returned probably way, way more than that in a very consistent fashion.”
Semil Shah Jul 25, 2016 ▶ 20:49
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