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Jul 31, 2017 · 26m · 20vc

20VC: What Metrics LPs Really Use To Measure Manager Success, Why 10 Year Fund Structures Really Do Not Work & Why Venture Is So Similar To The Movie Business with Will Porteous, General Partner @ RRE Ventures

Will Porteous · 17m spoken Harry Stebbings · 7m 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 Will Porteous, General Partner and COO at RRE Ventures, to discuss founder evaluation, flaws in traditional 10-year venture capital fund structures, and key trends in consumer tech and media. Porteous draws analogies between venture capital and the movie business while sharing executive leadership insights and career mentorship lessons.

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 30.5% of the talking time here. How this is scored →

Harry as informed peer 3.4 Guest teaching 3.8 Guest disagreement 0.8 Harry pushing back 2.0
05100:0010:0020:002:32–4:38 · Harry as informed peer 1/10 Will Porteous on His Background and Journey into Venture Capital Harry asks a broad background question about Will's entry into venture capital. Will responds with a smooth narrative detailing his transition from law to startups and eventually joining RRE. The exchange is purely introductory and conversational.4:38–8:20 · Harry as informed peer 3/10 Comparing Venture Capital to the Movie Business and Evaluating Founders Harry probes Will's analogy between venture capital and movie production, asking follow-up questions on how to stress-test founders. Harry pushes Will on where to draw the line between visionary idealism and stubbornness, which Will addresses with practical criteria.8:21–14:12 · Harry as informed peer 4/10 Flaws in 10-Year Fund Structures and LP Liquidity Will delivers a detailed critique of the traditional 10-year fund structure and proposes explicit secondary market options for LP liquidity. Harry asks informed follow-up questions regarding implementation barriers and IRR pressure, allowing Will to school the audience on fund dynamics.14:14–18:15 · Harry as informed peer 7/10 Location Awareness Tech and the Consumer Application Landscape Harry demonstrates strong host expertise by bringing up opposing viewpoints from prominent VCs Jeremy Levine and Kevin Rose regarding consumer tech investments. Will responds by validating the incumbency challenge while offering a counter-perspective grounded in grassroots distribution.18:16–24:05 · Harry as informed peer 2/10 Quickfire Round: Leadership, Mentors, and Modern Media Investments The quickfire round features rapid questions on books, media investment logic, and mentors. Will shares insightful anecdotes about working with Bill Campbell, while Harry maintains a standard, supportive quickfire pace.2:32–4:38 · Guest teaching 2/10 Will Porteous on His Background and Journey into Venture Capital Harry asks a broad background question about Will's entry into venture capital. Will responds with a smooth narrative detailing his transition from law to startups and eventually joining RRE. The exchange is purely introductory and conversational.4:38–8:20 · Guest teaching 3/10 Comparing Venture Capital to the Movie Business and Evaluating Founders Harry probes Will's analogy between venture capital and movie production, asking follow-up questions on how to stress-test founders. Harry pushes Will on where to draw the line between visionary idealism and stubbornness, which Will addresses with practical criteria.8:21–14:12 · Guest teaching 6/10 Flaws in 10-Year Fund Structures and LP Liquidity Will delivers a detailed critique of the traditional 10-year fund structure and proposes explicit secondary market options for LP liquidity. Harry asks informed follow-up questions regarding implementation barriers and IRR pressure, allowing Will to school the audience on fund dynamics.14:14–18:15 · Guest teaching 4/10 Location Awareness Tech and the Consumer Application Landscape Harry demonstrates strong host expertise by bringing up opposing viewpoints from prominent VCs Jeremy Levine and Kevin Rose regarding consumer tech investments. Will responds by validating the incumbency challenge while offering a counter-perspective grounded in grassroots distribution.18:16–24:05 · Guest teaching 4/10 Quickfire Round: Leadership, Mentors, and Modern Media Investments The quickfire round features rapid questions on books, media investment logic, and mentors. Will shares insightful anecdotes about working with Bill Campbell, while Harry maintains a standard, supportive quickfire pace.2:32–4:38 · Guest disagreement 0/10 Will Porteous on His Background and Journey into Venture Capital Harry asks a broad background question about Will's entry into venture capital. Will responds with a smooth narrative detailing his transition from law to startups and eventually joining RRE. The exchange is purely introductory and conversational.4:38–8:20 · Guest disagreement 1/10 Comparing Venture Capital to the Movie Business and Evaluating Founders Harry probes Will's analogy between venture capital and movie production, asking follow-up questions on how to stress-test founders. Harry pushes Will on where to draw the line between visionary idealism and stubbornness, which Will addresses with practical criteria.8:21–14:12 · Guest disagreement 2/10 Flaws in 10-Year Fund Structures and LP Liquidity Will delivers a detailed critique of the traditional 10-year fund structure and proposes explicit secondary market options for LP liquidity. Harry asks informed follow-up questions regarding implementation barriers and IRR pressure, allowing Will to school the audience on fund dynamics.14:14–18:15 · Guest disagreement 1/10 Location Awareness Tech and the Consumer Application Landscape Harry demonstrates strong host expertise by bringing up opposing viewpoints from prominent VCs Jeremy Levine and Kevin Rose regarding consumer tech investments. Will responds by validating the incumbency challenge while offering a counter-perspective grounded in grassroots distribution.18:16–24:05 · Guest disagreement 0/10 Quickfire Round: Leadership, Mentors, and Modern Media Investments The quickfire round features rapid questions on books, media investment logic, and mentors. Will shares insightful anecdotes about working with Bill Campbell, while Harry maintains a standard, supportive quickfire pace.2:32–4:38 · Harry pushing back 0/10 Will Porteous on His Background and Journey into Venture Capital Harry asks a broad background question about Will's entry into venture capital. Will responds with a smooth narrative detailing his transition from law to startups and eventually joining RRE. The exchange is purely introductory and conversational.4:38–8:20 · Harry pushing back 3/10 Comparing Venture Capital to the Movie Business and Evaluating Founders Harry probes Will's analogy between venture capital and movie production, asking follow-up questions on how to stress-test founders. Harry pushes Will on where to draw the line between visionary idealism and stubbornness, which Will addresses with practical criteria.8:21–14:12 · Harry pushing back 2/10 Flaws in 10-Year Fund Structures and LP Liquidity Will delivers a detailed critique of the traditional 10-year fund structure and proposes explicit secondary market options for LP liquidity. Harry asks informed follow-up questions regarding implementation barriers and IRR pressure, allowing Will to school the audience on fund dynamics.14:14–18:15 · Harry pushing back 5/10 Location Awareness Tech and the Consumer Application Landscape Harry demonstrates strong host expertise by bringing up opposing viewpoints from prominent VCs Jeremy Levine and Kevin Rose regarding consumer tech investments. Will responds by validating the incumbency challenge while offering a counter-perspective grounded in grassroots distribution.18:16–24:05 · Harry pushing back 0/10 Quickfire Round: Leadership, Mentors, and Modern Media Investments The quickfire round features rapid questions on books, media investment logic, and mentors. Will shares insightful anecdotes about working with Bill Campbell, while Harry maintains a standard, supportive quickfire pace.

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

0:00 · Harry 89.7% · guest 10.3%0:00 · Harry 89.7% · guest 10.3%3:00 · Harry 7.8% · guest 92.2%3:00 · Harry 7.8% · guest 92.2%6:00 · Harry 29% · guest 71%6:00 · Harry 29% · guest 71%9:00 · Harry 4.8% · guest 95.2%9:00 · Harry 4.8% · guest 95.2%12:00 · Harry 25.1% · guest 74.9%12:00 · Harry 25.1% · guest 74.9%15:00 · Harry 16.7% · guest 83.3%15:00 · Harry 16.7% · guest 83.3%18:00 · Harry 15.9% · guest 84.1%18:00 · Harry 15.9% · guest 84.1%21:00 · Harry 7.4% · guest 92.6%21:00 · Harry 7.4% · guest 92.6%24:00 · Harry 93.6% · guest 6.4%24:00 · Harry 93.6% · guest 6.4%
Sharpest disagreement ▶ 8:46 Rejecting the 10-year fund model

Will forcefully critiques the standard 10-year fund structure, arguing it is an outdated 40-year-old framework that creates major structural friction for both LPs and GPs.

 Hardest push from Harry ▶ 17:07 Challenging consumer excitement with VC counterexamples

Harry directly challenges optimism around consumer startups by citing Jeremy Levine's premise that incumbent advantages have crippled distribution channels.

 Biggest teaching moment ▶ 8:46 Masterclass on LP liquidity and fund structures

Will educates Harry on the mechanics of LP liquidity, detailing how defined secondary options and NAV discounts could smooth capital cycles.

 Harry holds his own ▶ 17:07 Synthesizing opposing VC market theses

Harry demonstrates high domain expertise by contrasting Bessemer's and True Ventures' conflicting perspectives on consumer tech viability to put the guest to the test.
the scores for every segment, with the reasoning behind each
ChapterTopicHarry as informed peerGuest teachingGuest disagreementHarry pushing backWhy
Will Porteous on His Background and Journey into Venture Capital 1200 Harry asks a broad background question about Will's entry into venture capital. Will responds with a smooth narrative detailing his transition from law to startups and eventually joining RRE. The exchange is purely introductory and conversational.
Comparing Venture Capital to the Movie Business and Evaluating Founders 3313 Harry probes Will's analogy between venture capital and movie production, asking follow-up questions on how to stress-test founders. Harry pushes Will on where to draw the line between visionary idealism and stubbornness, which Will addresses with practical criteria.
Flaws in 10-Year Fund Structures and LP Liquidity 4622 Will delivers a detailed critique of the traditional 10-year fund structure and proposes explicit secondary market options for LP liquidity. Harry asks informed follow-up questions regarding implementation barriers and IRR pressure, allowing Will to school the audience on fund dynamics.
Location Awareness Tech and the Consumer Application Landscape 7415 Harry demonstrates strong host expertise by bringing up opposing viewpoints from prominent VCs Jeremy Levine and Kevin Rose regarding consumer tech investments. Will responds by validating the incumbency challenge while offering a counter-perspective grounded in grassroots distribution.
Quickfire Round: Leadership, Mentors, and Modern Media Investments 2400 The quickfire round features rapid questions on books, media investment logic, and mentors. Will shares insightful anecdotes about working with Bill Campbell, while Harry maintains a standard, supportive quickfire pace.

Statements from this episode (9)

Insight
Porteous: Early-stage venture capital operates identically to the movie business
“All of us, you know, in the early stage of venture business spend our time really thinking about talent, and we could just as easily be talking about, you know, leading actors. I mean, we're looking for massively talented people who can play a leading role in …”
Will Porteous Jul 31, 2017 ▶ 4:55
Insight
Porteous: Building a startup requires 80-100 hour workweeks for 4-5 years
“Are they really ready to commit the 80 to a hundred hours a week for four to five years that it really takes to build a company?”
Will Porteous Jul 31, 2017 ▶ 5:47
Opinion
Porteous: Traditional 10-year venture fund structure no longer works
“The ten-year fund structure with a couple of extensions doesn't really work. It was invented 40 years ago, And it creates a ton of challenges for everyone involved.”
Will Porteous Jul 31, 2017 ▶ 8:46
What-if
Porteous: Secondary options in 2008 would have smoothed LP allocation shock
“The whole industry watched allocations shrink after the liquidity crisis of 2008. If LPs had had a defined exercisable secondary option in their funds. In many cases, they would have pulled it at that point, and it could have been a smoother period for everybo…”
Will Porteous Jul 31, 2017 ▶ 10:46
Insight
Porteous: Time diversification is as essential as stage or sector diversification
“Diversification by time is, is one of the most important instruments that, that we have as investors. And it's actually crucial that in composing a fund, it's not heavily concentrated in a single time period, just as you don't want it to be concentrated in a s…”
Will Porteous Jul 31, 2017 ▶ 12:12
Disclosure
Porteous: RRE's LPs demand early liquidity and double-digit net IRR
“I know that my LPs want to see two things in the first few years of the fund. They want to see early liquidity. They want to see us get well up into double digits in terms of net IRR.”
Will Porteous Jul 31, 2017 ▶ 13:08
Disclosure
Porteous: Skyhook Wireless Provided Location Software for Early Apple iPhones
“Market-leading chip companies lost 90% of their value and were replaced by software alternatives, including by one of our companies, Skyhook Wireless, which was on the iPhone.”
Will Porteous Jul 31, 2017 ▶ 14:56
Insight
Porteous: Consumer Startups Must Rely on Organic Growth Over Paid Acquisition
“I think the way we'll see new consumer experiences launched is actually going to be much more organic. You know, it's the trends, the sharing of new application experiences among communities that we as investors have to really watch for because we can't compet…”
Will Porteous Jul 31, 2017 ▶ 17:36
Opinion
Porteous: Display ad industry persists despite failing advertisers and ad tech collapse
“As we look around kind of the media landscape, I'm constantly amazed at how poorly served most advertisers are. It's part of the reason we've seen such a collapse in the ad tech sector. The fact that we still really have a display advertising industry, to me, …”
Will Porteous Jul 31, 2017 ▶ 23:35
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