Trae Vassallo, founding partner at Defy.vc, explains how fund scaling at traditional early-stage VC firms created a financing gap for smaller venture checks.
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“A lot of the venture firms that used to be early stage focused venture firms have gone from, you know, having 304 hundred million dollar funds to billion dollar funds. And these billion dollar funds are not likely investing three to four million dollars at a time. They really want to invest 10 to 15 plus million dollars at a time.”
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More from Trae Vassallo
Opinion
Venture Capital Decision-Making Does Not Scale Beyond Five Partners
“And so one of the learnings for myself was that I wasn't so sure that venture scaled well. Of making hard decisions. It's different when you have five people around a table versus 10 people around the table.”
Trae VassalloJun 4, 2018▶ 9:4920VC: What John Doerr Taught Me About Great Investing, Why Not All A Rounds Are Post-Traction and Why Despite Overfunding, There Is Still Gaps In Venture Financing with Trae Vassallo, Founding Partner @ Defy.vc
Insight
VC Fee Structures Create Adverse Incentives to Outsource Back-Office Operations
“And I will add the reason why a lot of people end up outsourcing it is because it becomes a fund expense. When you outsource it to hire someone that comes out of the management fee pool. And so there's a weird adverse incentive to want to hire the right people…”
Trae VassalloJun 4, 2018▶ 21:5120VC: What John Doerr Taught Me About Great Investing, Why Not All A Rounds Are Post-Traction and Why Despite Overfunding, There Is Still Gaps In Venture Financing with Trae Vassallo, Founding Partner @ Defy.vc
Insight
Vassallo: Tech diversity requires active participation from white male allies
“I mean, things aren't going to change unless middle class white guys are part of what's helping change what we're doing.”
Trae VassalloJun 4, 2018▶ 25:3120VC: What John Doerr Taught Me About Great Investing, Why Not All A Rounds Are Post-Traction and Why Despite Overfunding, There Is Still Gaps In Venture Financing with Trae Vassallo, Founding Partner @ Defy.vc
AssertionSupported
Good Technology Was Sold to Motorola for $500 Million
“We ultimately sold that company to Motorola for five hundred million”
Trae VassalloJun 4, 2018▶ 7:1520VC: What John Doerr Taught Me About Great Investing, Why Not All A Rounds Are Post-Traction and Why Despite Overfunding, There Is Still Gaps In Venture Financing with Trae Vassallo, Founding Partner @ Defy.vc
Opinion
Vassallo: The venture capital industry is overfunded
“The venture industry is overfunded. I mean, I don't think anyone would argue that there's, you know, not too much capital in the venture industry.”
Trae VassalloJun 4, 2018▶ 12:2120VC: What John Doerr Taught Me About Great Investing, Why Not All A Rounds Are Post-Traction and Why Despite Overfunding, There Is Still Gaps In Venture Financing with Trae Vassallo, Founding Partner @ Defy.vc
Disclosure
Defy.vc's First Series A Investment Was Pre-Revenue and Pre-Product
“In fact, our first investment was in a company that was absolutely pre-revenue. It was a Series A. They hadn't launched their product, but it was an investment in a different set of criteria.”
Trae VassalloJun 4, 2018▶ 14:1720VC: What John Doerr Taught Me About Great Investing, Why Not All A Rounds Are Post-Traction and Why Despite Overfunding, There Is Still Gaps In Venture Financing with Trae Vassallo, Founding Partner @ Defy.vc
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