Michael Kim

Founder & Managing Partner, Cendana Capital · 1 appearance on the record.

computed by AI from the episodes · how this works → · full disclaimer →

investorfounder@MKRocks ↗LinkedIn ↗cendanacapital.com ↗

In 2010, Michael Kim established Cendana Capital as a fund-of-funds dedicated to backing seed-stage venture funds and emerging managers. Through Cendana, he has anchored early-stage venture firms such as Forerunner Ventures, IA Ventures, and K9 Ventures.

16statements → 6claims → 2claims resolved → 4/5average certainty → 2.5/5average debate potential → 4.4/5argument clarity · the sources → 26said about them ↓

2 supported 0 partly supported 0 contradicted 1 not yet assessed 3 not checkable as stated how the 6 claims stand · each chip opens the sources

4 predictions · 2 assertions · 3 opinions · 5 insights · 2 disclosures · every statement was checked. The predictions and assertions are the 6 claims: statements the public record can support or contradict. 2 are resolved, 1 is not yet assessed, and 3 name no date, number or outcome precise enough to check. Everything else (opinions, insights, what ifs, disclosures) can never be settled by the record, so it carries no assessment.

The record, in short

What the tape says about how Michael argues and how the claims held up. Everything they said, and everything said about them, is in the tabs below.

Their most notable supported claim

Prediction Held up

Kim: Cendana Capital has zero interest in becoming a multi-billion dollar fund

“So we have zero interest in becoming a multi-billion dollar asset gatherer and living off our fees and having swanky offices.”

Michael Kim Jul 6, 2016 ▶ 26:09 20VC: What It Takes To Raise A VC Fund & Investing in First Time Fund Managers with Michael Kim @ Cendana Capital

Expressed certainty vs assessment result

none yet certainty 1

none yet certainty 2

none yet certainty 3

100% certainty 4

100% certainty 5

weighted support: a fully supported claim counts one, a partly supported claim counts half. Each filled bar is clickable and opens exactly those claims; "none yet" means nothing said at that certainty level has resolved yet

Argument clarity: do they answer the question? how? →

4.4 / 5 directness 4.2 · coherence 4.9 · precision 4.7 · compression 3.9

redirected or did not address 3 of 17 assessed questions (18%). Watch them ▸

This is a score against a rubric. It is not a rank. Every host question → answer exchange is scored with names hidden on directness, coherence, precision and compression, 1–5 each, on meaning alone: disfluencies are ignored, and only raw unedited episodes count. This is the score that measures thought. Every scored exchange, scores shown → · The rubric and its checks →

How they sound: speaking style how? →

224 words/min while actually speaking · 17 um and uh per 1k words

Measured by listening to the audio itself: 3,530 words across 1 episode of raw-level tape, transcribed verbatim with every um and uh kept, each one attributed only where the alignment onto our timed stream is unambiguous. These are measurements of speaking style. We do not rank them: across this corpus, fluency and argument quality are nearly uncorrelated (ρ≈0.2), and smooth talking does not signal clear thinking. How it's measured →

How the interview went all their pushback → series average →

Across 1 rated episode:

host pushback ▾ 5/10

pushed back at the host ▾ 2/10

setup questions received 65%

host pushback: the hardest questions Harry asked, tap to play ▶ 11:26“You said that about adverse selection. Is it, is it not, not adverse selection? It's just purely optionality because you are an LP in a fund.” ▶ 7:17“Do you agree that even if it is dumb money, ah, is that a bad thing, do you think? Is, does that not all still go to the funding of innovation?” ▶ 16:31“So, so how do you respond to that, then? I'm intrigued.”

when Michael pushed back ▶ 7:24“Well, let's take a step back and talk a little bit about taxonomy.” ▶ 11:37“Well, there's some of that, and I think that that's the dynamic that we hope to, uh, to take advantage of, where we are working very closely with our fund managers.”

What they said16 What others said26 Episodes1

Everything Michael Kim said on 20VC that made the record, most notable first. Filter by type, assessment or year in the ledger →

Opinion

Kim: Most LPs invest via social proof and preserve failing VC funds

“I think most LPs are social proof investors. I think that there's a substantial dynamic of you don't get fired for buying IBM. And venture funds are hard to kill. A lot of them should have been killed, but they're 10 to 12 year vehicles.”

Michael Kim Jul 6, 2016 ▶ 22:43 20VC: What It Takes To Raise A VC Fund & Investing in First Time Fund Managers with Michael Kim @ Cendana Capital

Opinion

Kim: Most VC fund of funds are terrible asset gatherers

“I think most venture capital fund of funds are terrible. They're asset gatherers. They want AUM. They want management fee. A lot of them don't even charge carry.”

Michael Kim Jul 6, 2016 ▶ 25:14 20VC: What It Takes To Raise A VC Fund & Investing in First Time Fund Managers with Michael Kim @ Cendana Capital

Insight

Kim: Micro VC seed funds now outperform larger traditional venture funds

“Ultimately, I think our thesis proved out these smaller funds do outperform, and these smaller funds have effectively become early stage venture capital today.”

Michael Kim Jul 6, 2016 ▶ 5:32 20VC: What It Takes To Raise A VC Fund & Investing in First Time Fund Managers with Michael Kim @ Cendana Capital

Insight

Kim: Early-stage LP direct investing suffers from severe adverse selection

“At the high level, I do think that there are substantial issues with LPs investing directly. First and foremost is adverse selection. If an opportunity is available to the LP, why are they being shown this? Is something wrong with the company? Does the fund ma…”

Michael Kim Jul 6, 2016 ▶ 9:41 20VC: What It Takes To Raise A VC Fund & Investing in First Time Fund Managers with Michael Kim @ Cendana Capital

Insight

Kim: Top VCs maximize ownership and squeeze LPs out of Series A

“If there is, at the earliest stages, a company that is High quality with high quality investors coming in. LPs are probably the last in line in terms of getting access to that. So imagine a seed funded company by one of our fund managers, a high quality firm l…”

Michael Kim Jul 6, 2016 ▶ 11:59 20VC: What It Takes To Raise A VC Fund & Investing in First Time Fund Managers with Michael Kim @ Cendana Capital

Insight

Kim: 1% seed stakes do not move the needle in typical exits

“The typical venture exit is between 50 to a hundred million. If you own 10% of that company, that's ten million dollars back at a hundred million dollar exit. Ten million back to a seed fund is very meaningful. If you own one percent, you get the same kind of …”

Michael Kim Jul 6, 2016 ▶ 16:50 20VC: What It Takes To Raise A VC Fund & Investing in First Time Fund Managers with Michael Kim @ Cendana Capital

Prediction Not publicly verifiable

Kim predicts long-term seed startup mortality rate will be 25% to 30%

“And, you know, I do think that the longer term sort of steady state mortality rate is probably 25% to 30%, but I don't think it's 80%, but we'll see.”

Michael Kim Jul 6, 2016 ▶ 21:54 20VC: What It Takes To Raise A VC Fund & Investing in First Time Fund Managers with Michael Kim @ Cendana Capital

Opinion

Kim: Party rounds are the absolute worst early-stage financing structure

“Now, the absolute worst scenario, and Mark Suster actually talks about it in his recent post on both sides of the table, are these party rounds. I don't think these party rounds are happening as often, but these party rounds are where 20 plus individuals, you …”

Michael Kim Jul 6, 2016 ▶ 8:23 20VC: What It Takes To Raise A VC Fund & Investing in First Time Fund Managers with Michael Kim @ Cendana Capital

Prediction Not checkable as stated

Kim predicts only 1-2 of Cendana's 18 funds will reach Sequoia status

“I would say that to be realistic, maybe one or two out of You know, the 18 plus funds that we work with may ultimately emerge in that category”

Michael Kim Jul 6, 2016 ▶ 15:44 20VC: What It Takes To Raise A VC Fund & Investing in First Time Fund Managers with Michael Kim @ Cendana Capital

Assertion Not checkable as stated

Kim: Institutional LPs have already exhausted their 2016 annual capital budgets

“A lot of them did, and so now institutional LPs are largely out of capital for the year. A number of LPs I know have already spent their budget or have already allocated their budget to these re-ups, and it's also not just in the U.S. There are a lot of re-ups…”

Michael Kim Jul 6, 2016 ▶ 19:41 20VC: What It Takes To Raise A VC Fund & Investing in First Time Fund Managers with Michael Kim @ Cendana Capital

Disclosure

Kim: Cendana Capital's seed portfolio mortality rate is currently under 10%

“I will tell you that through our portfolio, Of 700 companies or more, our mortality rate right now is less than 10%. What I mean by that is companies that have shut down, companies that have been written as zero.”

Michael Kim Jul 6, 2016 ▶ 21:41 20VC: What It Takes To Raise A VC Fund & Investing in First Time Fund Managers with Michael Kim @ Cendana Capital

Insight

Kim: Startups can achieve substantial traction with just $500,000

“Contrast that to today, where it's almost an order of magnitude cheaper to start a company, you can get substantial traction with 500,000 dollars.”

Michael Kim Jul 6, 2016 ▶ 4:12 20VC: What It Takes To Raise A VC Fund & Investing in First Time Fund Managers with Michael Kim @ Cendana Capital

Prediction Not checkable as stated

Kim predicts SoftTech VC will build a multi-generational platform like Greylock

“And if you look at the absolute top tier VC funds, they've done a phenomenal job of generational shift, and, you know, the older generation handing off to the younger generation, certainly firms like Greylock, have transformed themselves, and I think that is t…”

Michael Kim Jul 6, 2016 ▶ 24:27 20VC: What It Takes To Raise A VC Fund & Investing in First Time Fund Managers with Michael Kim @ Cendana Capital

Prediction Held up

Kim: Cendana Capital has zero interest in becoming a multi-billion dollar fund

“So we have zero interest in becoming a multi-billion dollar asset gatherer and living off our fees and having swanky offices.”

Michael Kim Jul 6, 2016 ▶ 26:09 20VC: What It Takes To Raise A VC Fund & Investing in First Time Fund Managers with Michael Kim @ Cendana Capital

Assertion Supported

Kim: US seed rounds in 2016 typically range from $1M to $2M

“The composition of a seed round, which today is about one to two million in the U S sometimes larger as large as three million.”

Michael Kim Jul 6, 2016 ▶ 7:52 20VC: What It Takes To Raise A VC Fund & Investing in First Time Fund Managers with Michael Kim @ Cendana Capital

Disclosure

Cendana operates a direct fund targeting Series B and C portfolio companies

“Specifically to Sandana, we do have a direct investment fund. So we have a standalone fund that invests directly into the portfolio companies of our fund managers. The idea here is that we would invest at the early growth stage, so series B or C. These compani…”

Michael Kim Jul 6, 2016 ▶ 10:10 20VC: What It Takes To Raise A VC Fund & Investing in First Time Fund Managers with Michael Kim @ Cendana Capital

The other half of the tape: Michael Kim's own voice is left out of every number here. Other people bring the name up 25 times in 11 episodes on 20VC. 1 statement on the record names them. every mention, with the transcript →

Who brings them up most Harry Stebbings 20 Rob Go 3 Dave McClure 2

Statements about Michael Kim, by other people (1)

Insight

Venture math should focus on probability distributions, not ownership percentages

“But the point that I was making with Michael is that ownership really isn't the math that we use to kind of think about how we invest. We really think more in terms of number of investments and the likely probability distribution of finding large outcomes. And…”

Dave McClure Aug 15, 2016 ▶ 8:56 20VC: 500 Startups' Dave McClure on Whether Unicorns Are Necessary For Venture Returns & Why Ownership Is Not The Math To Think About When Investing