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.
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Warrington: The era of creating $200B venture-backed companies in China is over
“Those days are over in the sense of there's a lot of things telling you that there's not really going to be the next two hundred billion dollar company, or at least it's harder to get there.”
Warrington: Mature private tech companies like SpaceX represent public equity risk
“The reality is those are not venture risk the way we think of venture. We've taken the approach that it's fair to think of those as a different asset class. They're just almost equity risk is the way we think about it.”
Warrington: Selling public equities to fund private capital calls destroys LP value
“The most important thing to us is if there is a violent drop in equity prices, I mean, public equities, at that moment, we cannot be in a position where we're taking money out of the public book and sliding it into the private book, because that's the ultimate…”
Warrington: Competing against a16z's infrastructure team for a seed round is unadvisable
“There was a great profile written about the A-sixteen Z infra team, and that team is just phenomenal, well-liked by founders, and I wouldn't want to go heads up with them to lead a seed deal.”
Warrington: Gresham Partners gravitates toward solo general partners for early-stage venture
“We've taken the tact that a solo GP might be better for the game that we're playing at that stage. That tends to differentiate a lot of what we're doing. Many of the bigger firm spin-outs tend to be teams of folks, and maybe we're wrong here, but we tend to gr…”
Warrington: The best artificial intelligence startup founders generally migrate to the US
“We do think a lot of the startups, if you look at AI, the best AI founders generally find their way to the U.S. Right now.”
Warrington: Institutional LPs cannot reliably evaluate an early-stage venture manager's picking ability
“We can probably figure out how well someone can source, what networks are they in, and we can probably figure out whether they have that right to win. What we've accepted is Is that their ability to pick? We probably don't have the data points to properly asse…”
Warrington: Gresham Partners avoids capital-intensive venture sectors due to weak historical returns
“We're not going to fully buy into that view and we'll make the exceptions where we think they're deserved to be made, but we're not going to broadly focus on capital intensive areas. Because historically, those haven't put out the venture scale returns we want…”
Warrington: Generalist venture funds have historically been Gresham's top-performing investments
“The world went very sector specialized, and I understand why, but one thing we've looked at our portfolio and said, over time, the generalists spend the best funds, and we're making a concerted effort to make sure we have enough generalists, that way we captur…”
Warrington: Venture managers asking for expansions means LPs cannot trust hard caps
“It's gotten so prevalent to where we almost never trust the hard cap, and that's almost perverting the word at this point.”
Warrington: Gresham maintains non-AI diversification to secure better startup valuations
“This is a wimpy answer, Ted, but we're putting part of the bet in today, but we're making sure to have at least some diversification to sectors that may not be as clearly vibrant, but frankly have much better valuations.”
Warrington: Venture capital lacks a natural exit conveyor belt during IPO droughts
“Unlike the buyout market, we don't have a conveyor belt. Again, the IPO window, the end game is stopped.”
Warrington: VCs promising three-year deployment pacing consistently deploy in 2.5 years
“The things that get us most nervous is when someone tells us they're on a three to four year clip. And look, everyone says three to four. In reality, they mean two and a half. We accept that. That's just the reality of venture today. But when someone puts all …”
Warrington: Underwriting venture funds centers on a manager's right to win ownership
“Where we think about the math, it really boils down to the VC's right to win the check they're going to invest. What we mean by that is if someone's trying to own 20% of a company at the seed stage, They better have a good argument why that founder wants their…”
Warrington: Every limited partnership agreement should contain a no-fault divorce clause
“Every LPA should have a no-fault. It's a very important clause. It's incredibly important in these situations.”
Warrington: China holds a major advantage in robotics from immediate use cases
“China will have a big advantage in robotics as they have the use cases right there, ready to go.”
Warrington: China's venture capital ecosystem lacks a solo capitalist and micro-fund market
“There really isn't a small fund market. The smaller funds in China are still a couple hundred million dollars. Yeah, there's some really small ones, but you just don't have this solo capital world.”
Warrington: Gresham Partners is currently sitting out venture capital co-investment opportunities
“While we have been offered some pretty cool chances from people we trust, we've taken the tack that at this moment, we're going to keep our co-investing for the private equity book and let some of our other family office friends, I suppose, lean in and take th…”