Dec 30, 2021 · 50m · capital-allocators
Jamie Montgomery – March Capital (Manager Meetings, EP.26)
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of Manager Meetings, host Ted Seides and institutional allocator Eric Yuppin interview March Capital Managing Partner Jamie Montgomery to examine the firm's concentrated enterprise software strategy, disciplined underwriting framework, and ecosystem-driven investment model. Montgomery shares actionable insights on multi-cycle pattern recognition, founder mentorship, firm culture, and the principles of long-term life cycle investing.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Ted holds 13% of the talking time here. How this is scored →
Ted as informed peer 5.7 Guest teaching 2.2 Guest disagreement 0.6 Ted pushing back 0.2
speaking balance: gold is Ted, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 40:35 Dismissal of Wall Street consensus research
Jamie forcefully dismisses Wall Street equity research on cloud software, noting March's independent CrowdStrike quarterly forecasts beat 27 investment banks who fail to grasp underlying enterprise demand.
Hardest push from Ted ▶ 37:23 Challenging late-cycle multiples against macro realityEric challenges Jamie on whether venture valuations can hold given twelve years of bull market appreciation, fifty percent mean-reversion risk, and rising interest rates.
Biggest teaching moment ▶ 41:05 Explaining global scale in Indian fintech infrastructureJamie educates the host on global digital payment scale, noting their portfolio company processed 70 percent of payments for one-fifth of the world population with massive youth adoption.
Ted holds their own ▶ 9:02 Allocating massive endowment capital to specialized managersEric demonstrates his deep institutional pedigree by outlining exact portfolio construction math for multibillion-dollar endowments balancing core venture titans against specialized spinouts and co-investments.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Ted as informed peer | Guest teaching | Guest disagreement | Ted pushing back | Why |
|---|---|---|---|---|---|---|
| Evaluating Venture Managers and Jamie Montgomery's Advisory Roots | 6 | 1 | 0 | 0 | Ted frames the interview setup and invites Eric Yuppin to explain how he evaluates venture managers transitioning from advisory/banking to investing. Eric details the three historical archetypes of successful VCs and highlights Montgomery's pattern recognition from his investment banking career. | |
| Portfolio Construction and Fitting March Capital into an Institutional Mandate | 7 | 2 | 0 | 1 | Ted probes on portfolio construction challenges for massive institutional endowments allocating to smaller or emerging managers rather than legacy names. Eric lays out the framework of core-satellite allocations, spinouts, early fund outperformance, and co-investment capacity. | |
| Founding March Capital and the Software Innovation Thesis | 5 | 2 | 0 | 0 | Eric kicks off the interview with Jamie Montgomery by asking what motivated the founding of March Capital in a fiercely competitive venture environment. Jamie details their early thesis around enterprise software innovation and high-conviction concentration. | |
| Core Verticals, Market Scale, and Portfolio Concentration | 6 | 3 | 1 | 0 | Eric asks whether specialization across fewer sectors is mandatory given widespread tech disruption. Jamie agrees and explains that venture represents just 0.6 percent of US GDP, justifying aggressive concentration by citing Warren Buffett on diversification. | |
| Venture Dispersion, Operating Discipline, and LP Alignment | 6 | 2 | 1 | 0 | Eric contrasts the wide return dispersion in venture with the difficulty of emerging funds breaking into the top tier. Jamie describes March's culture of humility, discipline, and LP alignment, explicitly contrasting it with the internal envy at larger marquee firms. | |
| Founder Mentorship, Governance, and Collaborative Venture Syndicates | 5 | 2 | 0 | 0 | Eric explores the balance between youth and technological intuition versus senior pattern recognition. Jamie details how board presence, frequent coaching, and syndicate collaboration build durable goodwill across the venture ecosystem. | |
| Mid-Roll Sponsor Message: Ridgeline | 4 | 1 | 0 | 0 | Following the mid-roll ad read, Eric invites Jamie to discuss the origin and impact of the annual Montgomery Summit in Santa Monica. Jamie explains how the summit serves as a collaborative deal and partnership engine, highlighting dedicated tracks for female founders. | |
| Firm Diversity, Internal Coaching, and Community Philanthropy | 5 | 3 | 2 | 0 | Eric asks about March Capital's team development across successive funds. Jamie details mandatory diverse candidate slates, full-team coaching, and pragmatic community philanthropy, taking a sharp swipe at superficial ESG consulting surveys in favor of direct local action. | |
| Navigating Multiples, Cloud Architecture, and Edge Computing | 7 | 4 | 2 | 1 | Eric presses Jamie on rich tech valuations and late-cycle macro risks. Jamie offers a detailed technical breakdown of cloud migration, cybersecurity tailwinds via CrowdStrike, and underwrites entry valuations 30 to 50 percent below market while dismissing consensus Wall Street equity research as inaccurate. | |
| Life Cycle Investing, Errors of Omission, and Mentorship from Charlie Munger | 6 | 2 | 0 | 0 | Eric and Jamie discuss longer holding periods, life cycle investing, and staying invested in top winners. Jamie discusses costly errors of omission in early funds and reflects on core discipline and ethical principles learned from Charlie Munger. |
Statements from this episode (20)
Yuppin: VCs are increasingly specializing rather than covering the broad market
“As we're seeing venture capitalists start to become more focused rather than covering the entire waterfront. And so focusing on cybersecurity and all of things around protecting the enterprise AI and machine led and algorithmic led kind of applications. Those …”
Yuppin: Early-stage VC funds outperform mature firms weighed down by fund size
“You're looking for earlier stage funds because you often see much higher performance when life is simple, fund size is smaller, and you have the singular mission of just investing. Things get really complicated by fund eight, nine. Firms are big. You're on Doz…”
Yuppin: Top CIOs target first-time VC funds and spinouts for outsized returns
“Today, you're seeing the real great CIOs are looking for first time funds, spin outs, where you've really identified talent and you want to be there early so you can gain greater capacity and you're more actively involved early and you're capturing some of tha…”
Montgomery: Investing in Fewer Companies Compounds Founder Trust and Access
“By doing a fewer number of companies that had a lot of benefit to us in terms of how we spend our time, we could work more closely with the management teams, and then we've gained their trust and respect, and they would give us more access to the companies and…”
Montgomery: US venture funding reached $150B in 2020, just 0.6% of GDP
“Investment venture capital. United States topped one hundred fifty billion last year. It's well ahead of that this year. It's fair to say the surface area of innovation has increased dramatically, but to put one hundred fifty billion dollars in context, that's…”
Montgomery: March Capital puts 75% of fund capital into 10 companies
“We'll concentrate at the 15% in any fund in one company, and then 75% of our investments will be in 10 companies in a fund, and we'll monitor companies for a couple of years before we invest, so we really know them well, so.”
Montgomery: 70% of Russell 2000 companies disappeared over twenty years
“I mean, I think if you look at the loss ratio in the Russell, 2000 over the last 20 years, you know, about 70% of the companies went away, and if you bought the top 10 companies in the Dow 20 years ago, you'd be holding, you know, 20 cents on the dollar right …”
Montgomery: Pandemic rate of tech adoption is not likely to repeat
“All of a sudden, we had five years of innovation adoption in six months, but it's not likely to be repeated in our lifetime.”
Yuppin: Venture capital has high persistence and huge barriers to entry
“There's a very high persistence in venture, so often the great stay great, and it's very hard to enter the space.”
Yuppin: Venture capital has arguably the highest return dispersion of any asset class
“Venture is such a unique asset class, arguably the highest dispersion of returns, meaning the difference between the average and the very best is about as big a cone or dispersion as there is”
Montgomery: Venture is not zero-sum; great companies need $100M-$200M across syndicates
“It's not a zero-sum game in the venture business. Usually, you know, there's four, five, six investors in a company, and it takes a 102 hundred million dollars to grow a great company, and we're one of those investors.”
Montgomery: Facebook gave its first presentation at the Montgomery Summit
“This is where Facebook first presented.”
Montgomery: 40% of Claremont McKenna female graduates enter innovation economy
“40% of the women graduates at Claremont McKenna go on the innovation economy. 10 years ago, it was five percent.”
Montgomery: CrowdStrike is fastest growing cloud software company ever
“CrowdStrike is the fastest growing cloud software company ever.”
Montgomery: March Capital sold Indian payments leader for about $5B
“We had the largest electronics payment company in India. We did one, we did 70% of the payments for one-fifth of the world's population. I mean, think of the scale on that. We just sold it for about five billion dollars.”
Montgomery: Edge computing startup could reach $40B to $50B in 10 years
“So we're building one company that we think will be the AWS of the edge. We think we can build a company that's worth 40, fifty billion dollars in 10 years.”
Montgomery: March Capital underwrites valuations 30% to 50% below market
“We underwrite our investments to valuations that are 30 to 50% lower than the current marketplace. So we basically say, look, if we can't underwrite, we want a margin of error when we do a deal.”
Montgomery: March Capital lost billions on errors of omission
“Did we make some investments in early stage consumer and fund one that didn't work out? Yeah. Those cost you maybe millions of dollars or maybe tens of millions at a minimum, but we left billions of dollars on the table by errors of a mission.”
Montgomery: VCs should hold top companies longer via life cycle funds
“I think you want to own these companies forever. I mean, I think they're great companies, and you sell them, and you pay tax. Could we have more of a life cycle? Yeah, I think that's a lesson learned, that we probably could stay in these companies longer, and …”
Montgomery: VCs must concentrate aggressively when finding rare standout companies
“And then if you're lucky enough to find a good company every couple years, like a CrowdStrike, and you really figure that out, and you gotta back up the bus, because you're not, those don't come along every month. I don't think there's that many great opportun…”