Traditional VC firms denied junior partners management company governance and fee rights
David Rosenthal · Benchmark Part I · Acquired · Sep 28, 2022 · at 21:11
Acquired co-host David Rosenthal breaks down the structural mechanics of venture firms in the 1990s, explaining the division between carried interest and management company ownership.
0:00 / 0:35exact quote · 35.5s
▶ Watch the full episode on YouTube → 720p mp4 · rendered on demand · StarZero watermark
“The split of the carry in any individual fund, while it tends to reflect ownership in the management company, these are two wholly different entities. And so what you often had and what you had with all these firms, these old firms back at this point in time, was the management companies were owned and controlled by the people who founded the firm and nobody else. And so you might let some of your junior partners in for pieces of the carry in future funds, But you wouldn't let them into the management company. So that meant they had no governance, they had no control, they had no right over anything, and they didn't have contractual right to any of the fees.”
quote is from the automated transcript, cleaned for reading: filler sounds and stutters are removed, nothing is rephrased. names can be misheard (the analysis reads context, assessments check outside sources). how →
More from David Rosenthal
The SR-71 Blackbird Was Effectively a Decoy for Space Satellites
“This is heretical to say, because it's so beloved, but I think the Blackbird was a decoy. We were getting everything we needed from space. We just didn't want anybody to know about it.”
The NFL blackballed Colin Kaepernick following his 2016 national anthem protests
“The NFL blackballed Colin Kaepernick after this.”
Rosenthal: The IPL is structurally superior to the NFL
“To me, this is not a controversial statement. The IPL is better set up structurally than the NFL. It is the Most perfect sports league that exists.”
Rosenthal: Taylor Swift Enterprise Value Is $11B Using Disney's 20x Multiple
“Disney trades at 20 X free cash flow. Taylor is five hundred and fifty million in free cash flow. That's a eleven billion dollar enterprise value for Taylor.”
Rosenthal: Steve Ballmer and Ray Ozzie deserve all credit for Azure's vision
“I kind of think all of the credit for the vision for it and the championing it for the initial seven years within Microsoft goes to Steve and to Ray.”
Ilya Sutskever argued next-token prediction inherently requires true world understanding
“The more accurately an LLM predicts that next word, i.e. The name of the criminal. Ipso facto, the greater its understanding, not only of the novel, but of all general human-level knowledge and intelligence, because you need all of your experience in the world…”