The Ledger
Every statement that passed quotation and attribution checks. Mix any filter with any other: certainty 1/5, debate potential 5/5, or both at once.
why aren't all 34 resolved? a statement only gets an assessment when the public record can support or contradict it. opinions and what-ifs never can, and 0 checkable ones are still open, waiting for their date. predictions held up or didn't; assertions are supported or contradicted. on every card: ▮▮▮▮▮ certainty · ▮▮▮▮▮ debate potential. speakers are clickable
Patel: $100M seed funds are awkwardly sized tweeners in current venture markets
“In today's market at the seed stage in particular a hundred million dollar fund is a bit of a tweener. You've either got to be larger to be able to write large checks and get the ownership that you need in order to win the best opportunities and deliver the ty…”
Patel: Self-funded investing frees investors from needing fund-returner outcomes
“The flexibility that we have in not having a fund now is that we don't have to think of every investment as having the potential to return the fund, right? Every investment just has to be a good return.”
Patel: Homebrew testing whether non-lead seed investors can maintain lead influence
“One of the experiments we're running here is kind of the testing the thinking around can capital and counsel be separated over the course of time, right? And so one of the things we're trying to evaluate is in some cases when we do a smaller check, can we stil…”
Patel: VCs rarely regret early distributions, but heavily regret holding to zero
“Most investors, investors don't realize, like, they're not gonna regret the upside if they put money in their pocket, but if they don't take the upside and things go away, they're gonna have a lot of regret.”
Patel: Distribution wins over product in early-stage startups
“It's not the best product that wins, it's the best distribution that wins, and that the best distribution creates a feedback cycle that allows you to have the best product over time, but distribution wins over product in the early days.”
Patel: Tighter funding markets make startup building easier due to less competition
“There's plenty of capital out there, and I'd say that it'll be easier for you in many ways to build a company in this environment because you'll have fewer funded competitors.”
Patel: Small early secondary liquidity helps founders do their best work
“And I think we're of the opinion, like there's no hard and fast rules around this, like obscene amounts of liquidity is obscene, but small amounts of liquidity can really free up a founder to do their best work.”
Patel: Homebrew requires a 5x-10x return potential for follow-on investments
“We've always tried to evaluate, like, as an example with a fund and a follow-on investment, do we believe we can earn at least five to 10 X from here? And if we believe that, then we're more likely to be a buyer. And if we don't, then, you know, we're more lik…”
Patel: Quality inside LPs do not demand forced early DPI
“I think if you've got the right LPs, they've seen enough in this business to understand that generating DPI through pressure isn't the best long-term outcome for the, for them and for the GPs. And then existing LPs have more data to evaluate progress and under…”
Patel: VCs should let struggling startups ride if founders can pivot
“VCs, we're in the business of losing money, right? Like, there's a reason that the power law is a thing, and if you still believe that the founders are smart enough to try to figure something out, even if it's a pivot, then you let it ride, and you see if they…”
Patel: Attitude matters more than aptitude in early-stage hiring
“At the earliest stages when it comes to hiring, I think attitude is more important than aptitude.”
Patel: Careers cannot be architected, only navigated in the moment
“I've always been of the opinion that you can't architect your career. You can have to do what feels right in the moment.”
Patel: Founder story and mission scope drive seed fundraising
“And I think the key to successful fundraising at the seed stage is really establishing that emotional resonance with an investor. And there's really only two means by which to do that. One is the personal story of the founders, right? Why it is they're focused…”
Patel: Follow-on funding issues stem strictly from misaligned expectations
“Follow on decisions are only problematic if you have misalignment of expectation.”
Patel: Homebrew targets 18 investments per fund, doing eight annually
“We had 18 companies in our first fund. We will have a similar number and maybe slightly more in our second fund because it's a slightly larger fund, and we only make about eight new investments a year.”
Patel: Homebrew operates without deal attribution and makes decisions by consensus
“And, you know, we, we've never had any of those kinds of issues because we don't do deal attribution. Every decision is made by consensus and we both work with every company in, in some, you know, type of way.”
Patel: Homebrew deployed capital over 3.5 years versus market's 18-24 months
“Even in the market over the last decade where everyone was putting their funds to work in 18 to 24 months, Our funds were being put to work it in three to three and a half years.”
Patel: Momentum investing fails to generate outsized returns in changing markets
“Everyone was focused on being part of every company that seemed like it had momentum because everybody else was investing in it, and that looked great because the bull market ran longer than it did, but in markets that change, like, that's not a strategy that'…”
Patel: Insatiable desire to learn is key component of a great VC
“I think the key component of a great VC is an insatiable desire to learn that can play itself out in the form of hustle in many ways, because you're hustling in order to get exposed to things that are going to educate you. And in today's world, in the hyper-co…”
Patel: Few seed investors were willing to be lead investor of record
“At that time there were many, many sources of capital, even more sources of capital now But there were very few investors at the seed stage in particular who were willing to raise their hand and say that I'm the investor of record.”
Patel: Homebrew relaxed its strict 10% ownership rule for seed investments
“Probably the number one change that we've made in terms of our investment criteria, we originally started with the idea that we needed to have a specific ownership percentage. In order to drive meaningful returns, and that's become more flexible where we think…”
Patel: Homebrew interacts with portfolio founders on a daily basis
“We have formal time with every company just about every week or every other week, and then we're usually on Slack and text and email with them every single day.”
Patel: Co-founder disputes, lack of focus, and running out of money kill startups
“I think it boils down to probably one of three primary problems. One is that, and this is more common than people might suspect is that the founders disagree. And they decide they don't want to be co-founders anymore. So that happens quite often. Number two is…”
Patel: Series A and B rounds are uniquely hard as investors demand reality
“I'd say A and B are particularly tough because at the seed stage you're investing and you're usually investing on the promise. At the A and B, you're trying to invest on more of the reality, and the reality has to stand out from everything else that those inve…”
Patel: Homebrew refuses to invest in pure consumer social startups
“We don't invest in pure consumer social businesses.”
Patel: Homebrew will make more investments in 2016 than in 2015
“We will probably make more investments this year than we did last year.”
Patel: Few founders focus on testing core business hypotheses
“I think very people try to, very few companies and founders focus on the two or three things that really matter, have a hypothesis about those things, and then try to, you know, prove or disprove those hypotheses.”
Patel: Partnerships require understanding what gives and saps energy for each person
“We talked about that shared vision, but I think just as important is understanding what gives energy and saps energy for each person so that within the context of the day to day, there's clarity around what role each person will play and what they're willing a…”
Patel: Homebrew partners hold quarterly two-person offsites to assess relationship health
“We do a quarterly offsite with just the two of us every quarter, and a part of that conversation is, how happy are you? Right, like along a bunch of different dimensions.”
Patel: Homebrew created two SPVs in 2022 leading Series D and E
“As an example, I think we've done a handful of SBVs now, but we did two last year, which led the Series E and Series D rounds for two of our later stage companies by virtue of having built that relationship and taking advantage of the market dislocation, where…”
Patel: Landed first VC job by sending 50-plus physical letters
“My first investing job happened because I literally sent fifty-plus snail mail letters to venture firms looking for a job. Even back then, lots of venture firms didn't have email that they published, certainly, and many didn't use email.”
Patel: Homebrew's first investment was Clementine, later acquired by Dropbox
“Our first investment for homebrew was a company called Clementine, and it was kind of a joint effort between us and the founders in terms of spending time in a particular problem area and then coming up with a product idea. So it was almost an incubation of so…”
Patel: Homebrew seeks narrow near-term product focus with broad long-term vision
“So we like to see as I referenced earlier, kind of a very narrow near-term focus, but in the founder's mind, a path to a broad long-term vision. So start with something small, start with something meaningful, start with something that people will love. And the…”
Patel: Homebrew focuses initial founder meetings on understanding motivation
“We spend a lot of our initial interactions with companies, obviously talking about the product and the market, but we spent a lot of time understanding the founders and what drives them, what motivates them, why they're doing what they're doing.”