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Large Venture Funds Charge 2-and-20 Fees for Passive Investing
“You are essentially acting as a long only public equity investor, right? You're not, you know, actively, you know, managing the company. They've got their own HR team. They're doing all their own hiring. You know, they've got a 20 person product team. They've …”
Venture Capital Fee Structures Must Change for Large Funds
“You know, we really try to understand has the magic bond been broken between GPs and LPs, which, you know, leads us to, you know, like we think the fee structures need to change to accommodate for that.”
CMU Endowment Is Willing to Pay 2.5% Fees and 30% Carry
“If you're raising you know, that early stage fund, the core five hundred million dollar Series A fund, charge us your, you know, two and a half and 20, and if you're good enough, two and a half and 30. We're okay with that, right?”
Carnegie Mellon Endowment Does Not Screen VC Managers for Founder Friendliness
“Yeah, I mean, we do not, when we're sourcing and we're doing reference work, that is not something we try to dig out. Like we want the most founder friendly GPs. That's not something we source for.”
Mature Venture Funds Yield a Median 8% Net IRR
“The median IRR is about eight percent net for that asset class, and the top quartile is a bit higher, 15%, but the MOIC is about two and a half x, right?”
Carnegie Mellon Targets 25-Year, Three-Fund Commitments With New VCs
“And when we back a new manager, we want to back them for at least three funds. So call it, you know, 25 years of an illiquid relationship.”
CMU Endowment Conducts 20 Reference Calls for New VC Funds
“I mean, we're, the way we think about referencing, you know, when we do a new fund, we're looking for at least 20 references calls, right?”
CMU's Private Investments Were Self-Funding for Three Years
“From a liquidity perspective, we've been fortunate compared to most endowments where that private equity book has been self-funding the past three years, so our distributions Have paid for our capital calls over the past three years. Now, the sub asset classes…”
Mega-Scale Venture Funds Are the Highest-Margin Businesses Ever Created
“These business models, these GPs are creating are some of the best high margin businesses Ever created, right?”
Carnegie Mellon Requests Detailed Financial Metrics for Top 10 Fund Assets
“We ask for trending revenue, trending gross profit, and trending free cash flow for the top 10 nabs of every, every fund of we underwrite.”
CMU Endowment Targets a 4x Net Return on Venture Fund Investments
“And so for us, when we do a venture fund, our target is a forex net. That's our goal.”
Recent VC Partnership Turnover Exceeds Previous Eight Years Combined
“The amount of change you've seen at partnerships over the past two years is the most I've seen combined in my, you know, eight year histories in LP.”
Kumar: Carnegie Mellon's academics are as rigorous as or superior to Stanford
“Academically, I would say that CMU is absolutely at par, and if not, maybe in some cases, more rigorous than Stanford.”
Index Ventures Has the Most Performance-Driven Culture Seen by CMU
“And they don't, they are the most performant driven culture that we see.”
Carnegie Mellon Backed a China Fund Returning Over 20x Net
“We had a fund out of China that produced over a 20 X net return to LPs.”
CMU Endowment Invested in Only One Sector Fund in 3.5 Years
“You know, we've done one new sector focus fund over the past three and a half years.”
CMU Endowment Prefers Cash Distributions Over Stock to Avoid Pricing Lags
“We like them to distribute cash versus stock. Reason being, if they distribute stock to us, there is sometimes a time lag between when we sell that and when others sell that, and so there could be a one to two percent pricing discrepancy on that versus them di…”
Carnegie Mellon Rarely Invests in VC Spinout Funds
“Yeah, we historically have not done many, if any, spinouts.”
CMU's Venture Book Is Self-Funding for the First Time Since 2021
“We are thankful to say that we're now self-funding in our venture book this year, which is give us a round of applause. I mean, it's the first time since 2021.”
CMU's 2012 VC Fund Will Add 3x Return in Year 13
“This is a 13 year fund that is essentially going to do an extra three turns on the fund in its 13th year.”
CMU Is 5 to 10 Percentage Points Overweight Venture Versus Peers
“I'd say we're overweight venture, but I call it anywhere from five to 10 points versus most other endowments of our size. We're underweight hedge funds and real assets, which would be real estate and natural resources”
CMU Focuses GP Diligence on Interpersonal and Partnership Risk
“Perspective on strategy, not so much. We are very much trying to find interpersonal risk and partnership risk. Those are, two things that we are really digging.”
Early-Stage Venture Funds Require 15 to 18 Years to Liquidate Fully
“If you're in an early-stage venture fund, it's gonna take at least 15 years for that fund to be wrapped up, probably 18. Right. To be fully done. All positions liquidated.”
CMU Independently Underwrites Top 10 NAVs for Manager Diligence
“20, 21 caused us to create new muscles in regards to underwriting as a group as well. And so for any re-up or any new manager, we diligence, we'll look at the top 10 company navs. Within that general partnership, we'll underwrite those companies ourselves. And…”
Carnegie Mellon Never Re-Ups in VC Funds Out of Loyalty
“Us, no. I mean, we are in an extreme performance-driven culture.”
Venture Needs Multiple Years of Strong Liquidity to Fully Recover
“It's been such a dearth of liquidity over the past three years that, like, one year is not gonna solve the industry's problem, right? So we're gonna need, like, multiple years of really good liquidity to get back to a normal state”
CMU Endowment Commits at Least $10M to $80M-$1B Funds
“For us and our commitment size, which at the low end, call it ten million bucks anything from at the low end, we'll do an eighty million dollar fund at the high end, you know, anywhere from 400 to a billion, right?”
Hacker: Duolingo bypassed seed rounds using NSF university grants
“We never raised seed or pre-seed. This was because we had these NSF grants. So we built this project inside the university. So Series A was our first round.”
Venture Capital Represents Nearly 25% of Carnegie Mellon's Total Endowment
“For us, venture globally is a little less than 25%, the total endowment, so almost half of that private equity book.”
Carnegie Mellon's Endowment Backed Kevin Hartz's A-Star
“Kevin Hart's at A-Stars is, is, is a new partner of ours, and he was at Founders Funds for a few years.”
Carnegie Mellon Allocates 85% of Its $4B Endowment to Equity
“We manage four billion on behalf of the university. And so starting at the highest level, we think of equity and fixed income as kind of the two parts of the endowment. 85% of the endowment is equity. 15% is fixed income. That is our allocation. And we manage …”