Institutional LP

“It's a, it is a massive red flag for us, and I would say most institutional LPs.”

“So we're talking about a five plus year problem as the GFC was in order to process all of this liquidity. This is not going to go away in 20, 25 or 20, 26. It's going to be continued pressure on the institutional LPs for liquidity over the course of the next s…”

“The institutional world, which you've covered tremendously well with capital allocators. And the wealth worlds are kind of converging. Institutions are trying to think about how they think about private markets. The wealth channel is now starting to think abou…”

“And so they were saying that like, you know, 80% of the meetings they take and these are folks on fund two and fund three, like clearly have never opened up a spreadsheet and like walk through portfolio construction.”

“They're so active in seed because the individual investors are like, well, hey, if we take thirty million and divide that out by a ton of two, three million dollar checks, if we lose a few, it's not such a blow to the reputation of that, you know, partner at t…”

“But I think it's also, I thought that like shit, it's just hard for me because I've never been in venture before and I'm trying to like do something substantial, but it turns out that like, even the folks that spin out, Are still getting kicked in the teeth.”

“It's good to build relationships, but you don't necessarily want to force people to evaluate you too early. Because I think particularly with larger institutions, it can be the case that, you know, once they evaluate you once, they may not be willing to look a…”

“A lot of the big pools of capital have very bureaucratic structures and low pay.”

“I'm not really seeing them drop great names. Some of them are downsizing significantly where they've got, you know, mandated outflows in the case of endowment funds or hospital institutions, but they're not dropping great names. They're still open for business…”

“In the case where an LP invests in a NAV lending fund that extends a loan to one of their private equity funds, that investor loses by the fees it pays to both sides, just like Jack Bogle's critique of active management in public equities.”

“You basically find the people who are willing to say yes and just trust you. You try to tally up as much as possible, preferably enough to do a minimum viable first close, close that capital, get into business, and allow yourself time to be able to cultivate t…”

“I generally think 40, really 50 is kind of the floor for a lot of those groups.”

“Institutions this is actually incredibly interesting, went down and then has in recent in recent weeks, spun right back up and has recovered in our data.”

“We're hearing from our fellow LPs that they are stuck on and committing this year, potentially next year, because of exactly this. They did so much because they felt they had to preserve relationships, and they were looking to make money for whatever instituti…”

“An LP will never want to be more than 20% of the LP dollars in a fund, and so the size at which an institutional LP would be interested is when you raise twenty-five million dollars plus at the very minimum, and then they can invest at least Five million dolla…”

“It's sometimes easier to raise a hundred million dollar fund than it is a thirty million dollar fund. Why? Because you unlock new tiers of LPs when you increase the size of your fund. More institutions are able to invest in a hundred million dollar fund than t…”

“Name one pension fund that said anything. The first people to say something was really Yale, like five, six months later. And even then nobody else said anything because they don't have to say anything because nobody knows who they are.”

“If the manager has a prospective LP institutional that has already gone through the approval process, what I'm hearing from institutional LPs is they already have their budgets and plans in place. They will complete those deals.”

“Most institutions that have AUMs exceeding, say, two billion dollars are probably unlikely to invest in you early on, but they take a long time to get to know you, so start that clock early.”

“When somebody has made a ton of money, and they're not Putting it back into their fund, you got to scratch their head about that. So in those cases, you do expect a much higher GP commit.”

“Most institutions are looking for franchises. They're looking for the ability to continue to invest with a firm”

“For us, it's great unrealized positions with high ownership behind it that will ultimately matter at an aggregate level at the end of the day. So it doesn't matter necessarily if it's realized or unrealized.”

“In this world, we don't have Results yet. So everything people look at are proxies for real results. And the proxies in seed are who follows your deals? How much money is put behind those deals? Can you continually do that? Can you intercept the good deals?”

“The likelihood of a first-time fund getting money from an institutional without any prior experience is next to zero.”

“A lot of managers, GPs, are coming to them And pitching a certain strategy for their fund that is not at all what they've actually been doing or not what they end up doing, and they're pitching that they're going to have a certain specific type of strategy and…”

“Because in this business, when you're trying to generate returns, both cash on cash, you know, return multiple, which we tend to focus on, but also IRR, which a lot of institutional LPs focus on, really does start to hone your senses towards particular timefra…”

“Traditional institutional LPs, I don't think they make great direct investors. And in general, they aren't able to attract the most talented direct investors to their platform.”

“I will say a challenge for venture writ large and a challenge for LPs is that institutional LPs are changing. They're all struggling with staff turnover. Many have vacillated in their commitment to venture. Because of that, I think you've seen venture funder f…”

“Amongst the established managers, if you are a traditional quote-unquote VC not an incubator, accelerator, post-accelerator, what is, what's actually happening is that there is always this theory of a bigger fool. So what happens to them is that they might not…”

“A lot of them did, and so now institutional LPs are largely out of capital for the year. A number of LPs I know have already spent their budget or have already allocated their budget to these re-ups, and it's also not just in the U.S. There are a lot of re-ups…”