The Ledger
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D'Augelli: VCs cannot practically increase ownership in top breakout companies
“And so our, you know, call it 20 to 25% at the beginning. If we do everything right, we'll own between 17 and 20% at outcome. But I think it's very difficult over time with success to continue to buy ownership.”
D'Augelli: In highly uncertain markets, knowing more leads to worse decisions
“As an aside, there's an awesome academic paper called Investing in the Unknown and Unknowable, which argues that in markets with many unknowns and things you cannot know, Knowing more actually leads to worse decisions for an investor, and rather they should fo…”
True Ventures targets 20% seed ownership with $2M median checks
“And so, you know, to dive in on True, we manage funds of roughly three hundred million, and really focus on leading the first round of institutional capital, usually pre-seed or seed, with investments of 500 K to three and a half million, targeting 20 to 25% i…”
D'Augelli: Single-lead priced equity rounds build better companies than co-led deals
“We have a meaningful bias towards priced equity rounds with a single lead who have really deep pockets. Somewhat self-serving, but we also think it's the best way to go build very important companies.”
D'Augelli: True Ventures' best investments like Ring and Splice looked weird
“I would say in most of our successful companies over time, they were not perceived as successful in the beginning. Things like Ring or Splice are companies that Today, I think people are like, that's, those are really interesting businesses, but there were kin…”
D'Augelli: Half of Ring's products were defective when True Ventures invested
“50% of their products at that point didn't work.”
D'Augelli: Music creator tools was the least popular VC category
“I don't think he could have chosen a less popular category for VCs than the intersection of music and creator tools.”
D'Augelli: Overpacked VC calendars hinder investment performance and serendipity
“So I think VC is a strange job where doing more doesn't often correlate to improve performance. And I argue filling your calendar with lots of meetings doesn't create the space for luck and serendipity to occur.”
D'Augelli: Aspiring VCs should join emerging funds with high workloads
“If you're going to join a venture fund, joining one that is new, where they have lots to do with people that you like, and you're aligned with their values, is super important.”
True Ventures has backed 28 founders twice and eight founders thrice
“We've backed 28 people twice. We've backed eight people three times.”
True Ventures deployed $50M to $60M each into Ring and Peloton
“And so in some of our biggest companies, things like Ring or Peloton or Zymergen, we started with a small check and over time invested 50, sixty million dollars.”
True Ventures generates full fund returns from one or two investments
“In each fund, we've shown an ability to partner with one or two founders where our investment in the company over time will end up returning the entire fund. It, Duo Security, HashiCorp, Peloton.”
True Ventures makes initial investment decisions in a non-consensus manner
“At True, decisions are driven by an individual protagonist on the investment team, often with support of one or more others on the team, but are often made in a non-consensus way.”
D'Augelli: Founders are never surprised when True stops follow-on funding
“I have not yet had an experience where someone was surprised when we said it wasn't working. And often it's a conversation with them where they are aware before we are.”
Ring founder Jamie Siminoff spent $200K on an option for Ring.com
“At the time, you know, we were only raising three and a half million dollars. The ultimate cost for Ring.com would be a million dollars. But he said, hey, I have an option to buy it for a million dollars, but spending 200 K a day.”
D'Augelli: The video doorbell market was zero dollars when True backed Ring
“When we invested, the doorbell market was zero dollars.”
True Ventures targets 45 to 50 initial investments per fund
“In each fund, we'll make between 45 and 50 initial investments in reserve really heavily.”