Hulme: Requiring every VC investment to be a fund-returner is flawed
Tom Hulme · Tom Hulme: Lessons from a 24x Angel Track Record, 275x on Robinhood & Making Billions on Uber |E1150 · 20VC with Harry Stebbings · May 8, 2024 · at 40:18
Tom Hulme is Managing Partner at GV. He challenges traditional venture capital dogma that insists every investment in a portfolio must be capable of returning the entire fund.
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“I think, ah, a lot of VC strategy is a lagging indicator of what did work in the past, and the test, Or the experiment that worked very well in the past is funds with 25 portfolio companies, power law of returns, and one or two return the whole fund, and then everything else drives decent return and IRR for the LPs. That has absolutely worked, but just because that has worked doesn't mean other approaches can't. And I think we see from different PE models, we even see from debt models, there's other ways to actually be very successful at kind of growth stage. So I would not want to say that I would only structure a portfolio that can deliver or return or make investments that could return the whole fund. It doesn't make sense to me.”
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