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Aug 13, 2018 · 38m · 20vc

20VC: Why Partners Are There To Save Each Other From Themselves, Why Effective Reserve Allocation Is The Hardest Question In Venture & What Makes The Truly Special Board Members with Jeff Fagnan, Founding Partner @ Accomplice

Jeff Fagnan · 27m spoken Harry Stebbings · 9m spoken
0:00 / 0:00

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In this episode of The 20 Minute VC, host Harry Stebbings interviews Jeff Fagnan, Founding Partner at Accomplice, who discusses moving from committee-driven VC models to conviction-led investing, mastering reserve allocation, and fostering effective board dynamics.

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 25.2% of the talking time here. How this is scored →

Harry as informed peer 3.4 Guest teaching 5.1 Guest disagreement 1.1 Harry pushing back 1.8
05100:0010:0020:0030:003:09–7:44 · Harry as informed peer 4/10 Jeff Fagnan's Career Origins and Lessons from the Dot-Com Bubble Jeff recalls entering VC in March 2000 right before the bubble burst and how that shaped his focus on business fundamentals. Harry pushes back thoughtfully by contrasting dot-com speculation with today's real unit economics like CAC and LTV.7:44–13:58 · Harry as informed peer 3/10 Transitioning from Atlas Venture to Accomplice Jeff chronicles his transition from Seed Capital Partners to Atlas Venture, illustrating how matrixed decision-making and consensus-driven VC committees dilute conviction. He colorfully details taking a hatchet to Atlas's bloated structure.13:58–16:44 · Harry as informed peer 3/10 Embracing Individual Conviction and Learning from Missed Opportunities Jeff explains how missed opportunities like Dropbox with Drew Houston led Accomplice to ditch consensus in favor of single-partner conviction and low-cost initial bets.16:44–20:45 · Harry as informed peer 4/10 Partnership Dynamics and Reserve Allocation Strategy Jeff outlines reserve strategy, warning against forced ranking in early-stage portfolios and explaining how Accomplice treats initial checks as experimental spears before allocating follow-on capital.20:45–24:22 · Harry as informed peer 3/10 Proactive Capital Concentration and West Coast Expansion Jeff reframes price discipline, admitting that letting outside VCs re-price portfolio companies was actually a sign of slowness rather than discipline, leading to preemptive capital concentration.24:25–27:10 · Harry as informed peer 3/10 Recruiting Top Talent and Cultivating Firm Culture Jeff discusses recruiting top talent like Sam Clements, sharing the humorous exchange where Sam initially rejected VC for lack of builder energy before being won over by Accomplice's culture.27:10–31:21 · Harry as informed peer 3/10 Quick Fire Round: Favorite Books, Challenges, and Board Dynamics In a rapid-fire sequence, Jeff shares personal insights on coaching, balancing reactive inbox work with proactive thinking, and why seed-stage startups should avoid having formal boards.31:25–35:51 · Harry as informed peer 4/10 Working with Fred Destin and Investment in Perch Homes Jeff candidly evaluates working with former partner Fred Destin, highlighting his intense work ethic alongside lone-wolf tendencies, before detailing his long-term trust-based investment in Perch Homes.3:09–7:44 · Guest teaching 4/10 Jeff Fagnan's Career Origins and Lessons from the Dot-Com Bubble Jeff recalls entering VC in March 2000 right before the bubble burst and how that shaped his focus on business fundamentals. Harry pushes back thoughtfully by contrasting dot-com speculation with today's real unit economics like CAC and LTV.7:44–13:58 · Guest teaching 6/10 Transitioning from Atlas Venture to Accomplice Jeff chronicles his transition from Seed Capital Partners to Atlas Venture, illustrating how matrixed decision-making and consensus-driven VC committees dilute conviction. He colorfully details taking a hatchet to Atlas's bloated structure.13:58–16:44 · Guest teaching 6/10 Embracing Individual Conviction and Learning from Missed Opportunities Jeff explains how missed opportunities like Dropbox with Drew Houston led Accomplice to ditch consensus in favor of single-partner conviction and low-cost initial bets.16:44–20:45 · Guest teaching 5/10 Partnership Dynamics and Reserve Allocation Strategy Jeff outlines reserve strategy, warning against forced ranking in early-stage portfolios and explaining how Accomplice treats initial checks as experimental spears before allocating follow-on capital.20:45–24:22 · Guest teaching 6/10 Proactive Capital Concentration and West Coast Expansion Jeff reframes price discipline, admitting that letting outside VCs re-price portfolio companies was actually a sign of slowness rather than discipline, leading to preemptive capital concentration.24:25–27:10 · Guest teaching 4/10 Recruiting Top Talent and Cultivating Firm Culture Jeff discusses recruiting top talent like Sam Clements, sharing the humorous exchange where Sam initially rejected VC for lack of builder energy before being won over by Accomplice's culture.27:10–31:21 · Guest teaching 5/10 Quick Fire Round: Favorite Books, Challenges, and Board Dynamics In a rapid-fire sequence, Jeff shares personal insights on coaching, balancing reactive inbox work with proactive thinking, and why seed-stage startups should avoid having formal boards.31:25–35:51 · Guest teaching 5/10 Working with Fred Destin and Investment in Perch Homes Jeff candidly evaluates working with former partner Fred Destin, highlighting his intense work ethic alongside lone-wolf tendencies, before detailing his long-term trust-based investment in Perch Homes.3:09–7:44 · Guest disagreement 1/10 Jeff Fagnan's Career Origins and Lessons from the Dot-Com Bubble Jeff recalls entering VC in March 2000 right before the bubble burst and how that shaped his focus on business fundamentals. Harry pushes back thoughtfully by contrasting dot-com speculation with today's real unit economics like CAC and LTV.7:44–13:58 · Guest disagreement 2/10 Transitioning from Atlas Venture to Accomplice Jeff chronicles his transition from Seed Capital Partners to Atlas Venture, illustrating how matrixed decision-making and consensus-driven VC committees dilute conviction. He colorfully details taking a hatchet to Atlas's bloated structure.13:58–16:44 · Guest disagreement 1/10 Embracing Individual Conviction and Learning from Missed Opportunities Jeff explains how missed opportunities like Dropbox with Drew Houston led Accomplice to ditch consensus in favor of single-partner conviction and low-cost initial bets.16:44–20:45 · Guest disagreement 1/10 Partnership Dynamics and Reserve Allocation Strategy Jeff outlines reserve strategy, warning against forced ranking in early-stage portfolios and explaining how Accomplice treats initial checks as experimental spears before allocating follow-on capital.20:45–24:22 · Guest disagreement 1/10 Proactive Capital Concentration and West Coast Expansion Jeff reframes price discipline, admitting that letting outside VCs re-price portfolio companies was actually a sign of slowness rather than discipline, leading to preemptive capital concentration.24:25–27:10 · Guest disagreement 1/10 Recruiting Top Talent and Cultivating Firm Culture Jeff discusses recruiting top talent like Sam Clements, sharing the humorous exchange where Sam initially rejected VC for lack of builder energy before being won over by Accomplice's culture.27:10–31:21 · Guest disagreement 1/10 Quick Fire Round: Favorite Books, Challenges, and Board Dynamics In a rapid-fire sequence, Jeff shares personal insights on coaching, balancing reactive inbox work with proactive thinking, and why seed-stage startups should avoid having formal boards.31:25–35:51 · Guest disagreement 1/10 Working with Fred Destin and Investment in Perch Homes Jeff candidly evaluates working with former partner Fred Destin, highlighting his intense work ethic alongside lone-wolf tendencies, before detailing his long-term trust-based investment in Perch Homes.3:09–7:44 · Harry pushing back 3/10 Jeff Fagnan's Career Origins and Lessons from the Dot-Com Bubble Jeff recalls entering VC in March 2000 right before the bubble burst and how that shaped his focus on business fundamentals. Harry pushes back thoughtfully by contrasting dot-com speculation with today's real unit economics like CAC and LTV.7:44–13:58 · Harry pushing back 2/10 Transitioning from Atlas Venture to Accomplice Jeff chronicles his transition from Seed Capital Partners to Atlas Venture, illustrating how matrixed decision-making and consensus-driven VC committees dilute conviction. He colorfully details taking a hatchet to Atlas's bloated structure.13:58–16:44 · Harry pushing back 1/10 Embracing Individual Conviction and Learning from Missed Opportunities Jeff explains how missed opportunities like Dropbox with Drew Houston led Accomplice to ditch consensus in favor of single-partner conviction and low-cost initial bets.16:44–20:45 · Harry pushing back 2/10 Partnership Dynamics and Reserve Allocation Strategy Jeff outlines reserve strategy, warning against forced ranking in early-stage portfolios and explaining how Accomplice treats initial checks as experimental spears before allocating follow-on capital.20:45–24:22 · Harry pushing back 2/10 Proactive Capital Concentration and West Coast Expansion Jeff reframes price discipline, admitting that letting outside VCs re-price portfolio companies was actually a sign of slowness rather than discipline, leading to preemptive capital concentration.24:25–27:10 · Harry pushing back 1/10 Recruiting Top Talent and Cultivating Firm Culture Jeff discusses recruiting top talent like Sam Clements, sharing the humorous exchange where Sam initially rejected VC for lack of builder energy before being won over by Accomplice's culture.27:10–31:21 · Harry pushing back 1/10 Quick Fire Round: Favorite Books, Challenges, and Board Dynamics In a rapid-fire sequence, Jeff shares personal insights on coaching, balancing reactive inbox work with proactive thinking, and why seed-stage startups should avoid having formal boards.31:25–35:51 · Harry pushing back 2/10 Working with Fred Destin and Investment in Perch Homes Jeff candidly evaluates working with former partner Fred Destin, highlighting his intense work ethic alongside lone-wolf tendencies, before detailing his long-term trust-based investment in Perch Homes.

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

0:00 · Harry 100% · guest 0%0:00 · Harry 100% · guest 0%3:00 · Harry 17.2% · guest 82.8%3:00 · Harry 17.2% · guest 82.8%6:00 · Harry 25.9% · guest 74.1%6:00 · Harry 25.9% · guest 74.1%9:00 · Harry 0% · guest 100%9:00 · Harry 0% · guest 100%12:00 · Harry 14.3% · guest 85.7%12:00 · Harry 14.3% · guest 85.7%15:00 · Harry 15.4% · guest 84.6%15:00 · Harry 15.4% · guest 84.6%18:00 · Harry 24.7% · guest 75.3%18:00 · Harry 24.7% · guest 75.3%21:00 · Harry 8.6% · guest 91.4%21:00 · Harry 8.6% · guest 91.4%24:00 · Harry 10.9% · guest 89.1%24:00 · Harry 10.9% · guest 89.1%27:00 · Harry 12.8% · guest 87.2%27:00 · Harry 12.8% · guest 87.2%30:00 · Harry 7.1% · guest 92.9%30:00 · Harry 7.1% · guest 92.9%33:00 · Harry 15.4% · guest 84.6%33:00 · Harry 15.4% · guest 84.6%36:00 · Harry 100% · guest 0%36:00 · Harry 100% · guest 0%
Sharpest disagreement ▶ 24:50 Sam Clements' rejection of VC

Jeff retells founder Sam Clements forcefully rejecting his VC job offer with disdain, calling VC work terrible and lacking entrepreneurial energy.

 Hardest push from Harry ▶ 6:32 Harry challenges dot-com bubble comparison

Harry pushes back on Jeff's comparison of current market gluttony to the dot-com crash, pointing out that modern tech companies have real unit economics like LTV and CAC.

 Biggest teaching moment ▶ 21:10 Jeff dismantles the VC myth of 'price discipline'

Jeff educates the host on portfolio dynamics by revealing that congratulating themselves on 'price discipline' when rival firms re-priced their startups was actually a self-delusional cover for being slow to react to internal metrics.

 Harry holds his own ▶ 6:32 Harry demonstrates domain mastery in software unit economics

Harry showcases his industry knowledge by articulately framing the shift in software business models around customer acquisition costs and lifetime value.
the scores for every segment, with the reasoning behind each
ChapterTopicHarry as informed peerGuest teachingGuest disagreementHarry pushing backWhy
Jeff Fagnan's Career Origins and Lessons from the Dot-Com Bubble 4413 Jeff recalls entering VC in March 2000 right before the bubble burst and how that shaped his focus on business fundamentals. Harry pushes back thoughtfully by contrasting dot-com speculation with today's real unit economics like CAC and LTV.
Transitioning from Atlas Venture to Accomplice 3622 Jeff chronicles his transition from Seed Capital Partners to Atlas Venture, illustrating how matrixed decision-making and consensus-driven VC committees dilute conviction. He colorfully details taking a hatchet to Atlas's bloated structure.
Embracing Individual Conviction and Learning from Missed Opportunities 3611 Jeff explains how missed opportunities like Dropbox with Drew Houston led Accomplice to ditch consensus in favor of single-partner conviction and low-cost initial bets.
Partnership Dynamics and Reserve Allocation Strategy 4512 Jeff outlines reserve strategy, warning against forced ranking in early-stage portfolios and explaining how Accomplice treats initial checks as experimental spears before allocating follow-on capital.
Proactive Capital Concentration and West Coast Expansion 3612 Jeff reframes price discipline, admitting that letting outside VCs re-price portfolio companies was actually a sign of slowness rather than discipline, leading to preemptive capital concentration.
Recruiting Top Talent and Cultivating Firm Culture 3411 Jeff discusses recruiting top talent like Sam Clements, sharing the humorous exchange where Sam initially rejected VC for lack of builder energy before being won over by Accomplice's culture.
Quick Fire Round: Favorite Books, Challenges, and Board Dynamics 3511 In a rapid-fire sequence, Jeff shares personal insights on coaching, balancing reactive inbox work with proactive thinking, and why seed-stage startups should avoid having formal boards.
Working with Fred Destin and Investment in Perch Homes 4512 Jeff candidly evaluates working with former partner Fred Destin, highlighting his intense work ethic alongside lone-wolf tendencies, before detailing his long-term trust-based investment in Perch Homes.

Statements from this episode (13)

Assertion Not checkable as stated
Fagnan attended three IPO parties in his first month in VC
“When I joined venture, I went to three IPO parties in my first month.”
Jeff Fagnan Aug 13, 2018 ▶ 5:10
What-if
Fagnan: Joining VC a year earlier would have ended my career
“If I probably would have joined venture a year earlier, I would have done a bunch of dumb investment and probably would have been, who knows what I'd be doing now, but I don't think I would be doing what I'm doing.”
Jeff Fagnan Aug 13, 2018 ▶ 6:21
Insight
Individual partner accountability beats large VC consensus committees
“Fewer people taking deeper accountability for decisions was much better than this approach.”
Jeff Fagnan Aug 13, 2018 ▶ 12:03
What-if
Consensus decision-making cost Atlas Venture the Dropbox seed round
“And if that would have been the case, you know, Dropbox, we would have led to see the series a and probably kept a drew in Boston and it would have just changed everything.”
Jeff Fagnan Aug 13, 2018 ▶ 15:21
Assertion Supported
Atlas allowed partners to write $1M checks on individual conviction
“We set up where any partner on their own conviction could write up to a million dollar check on meeting an entrepreneur.”
Jeff Fagnan Aug 13, 2018 ▶ 15:35
Insight
Outliers are the only investments that matter in venture capital
“Consensus beat out the outliers and the outliers are the only things that matter in this business.”
Jeff Fagnan Aug 13, 2018 ▶ 16:39
Disclosure
Accomplice does not reserve follow-on capital for $1.5M seed checks
“When we write an initial seed check of say a million and a half, we are usually not reserving behind that company.”
Jeff Fagnan Aug 13, 2018 ▶ 18:52
Insight
Force-ranking early-stage portfolio companies is a dangerous practice
“Forced ranking at an early stage portfolio is really dangerous.”
Jeff Fagnan Aug 13, 2018 ▶ 19:49
Disclosure
Accomplice passed on follow-on rounds 10 to 15 times over valuation
“And I would say that's happened probably 10 to 15 times across the portfolio.”
Jeff Fagnan Aug 13, 2018 ▶ 21:18
Prediction Not checkable as stated
Accomplice concentrates capital in portfolio companies under a $50M valuation
“And for a two hundred million dollar seed-led fund, we are trying to concentrate capital at a sub-fifty million dollar valuation.”
Jeff Fagnan Aug 13, 2018 ▶ 22:28
Insight
Seed-stage startups should not have formal boards of directors
“First off, I don't think seed stage companies should have boards, I really think that they can get misdirected when all they really should be focusing on is talent aggregation and product market fit.”
Jeff Fagnan Aug 13, 2018 ▶ 30:30
Opinion
Court Cunningham is the best independent board member Fagnan has seen
“Perch Homes is founded by Court Cunningham, who we were just talking about, who is on the board of Inside Squared, is the best independent board member I've ever worked with.”
Jeff Fagnan Aug 13, 2018 ▶ 33:26
Disclosure
Fagnan's last three investments were with founders he knew for 10+ years
“My last three investments that I've made have all been with people that I've known at least for 10 years”
Jeff Fagnan Aug 13, 2018 ▶ 34:37
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