Dec 13, 2024 · 53m · neon-show
Why Top Global VCs Are Eyeing India | Boris Wertz | Version One Ventures | The Neon Show
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In this episode of The Neon Show, Boris Wertz of Version One Ventures breaks down the core mechanics of early-stage venture capital, fund management discipline, and historical market cycles. He also articulates a high-conviction macro thesis on India's booming startup ecosystem, driven by demographic tailwinds, exceptional founder hunger, and reverse brain drain.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Siddhartha holds 13.4% of the talking time here. How this is scored →
Siddhartha as informed peer 3.3 Guest teaching 4.8 Guest disagreement 0.5 Siddhartha pushing back 0.4
speaking balance: gold is Siddhartha, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 16:45 Boris challenges the second-time founder premium
Boris counters the conventional belief that second-time founders are strictly better bets, arguing their ability to raise large sums often traps them in rigid theses and prevents needed pivots.
Hardest push from Siddhartha ▶ 10:29 Siddhartha challenges VC illiquidity vs public equity returnsSiddhartha pushes Boris on the fundamental value proposition of venture capital, questioning why anyone should lock up money in illiquid funds when public indices consistently yield strong returns.
Biggest teaching moment ▶ 35:24 Boris introduces the Minimum Viable Fund conceptBoris educates emerging managers on sizing their funds to test specific hypotheses rather than chasing arbitrary target sizes in an illiquid fundraising climate.
Siddhartha holds their own ▶ 30:47 Siddhartha outlines the democratization of fund creationSiddhartha articulates how venture shifted from an insular Ivy League club to a founder-driven market where VCs must proactively compete for top entrepreneurs.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Siddhartha as informed peer | Guest teaching | Guest disagreement | Siddhartha pushing back | Why |
|---|---|---|---|---|---|---|
| Portfolio Evolution: Backing Indian and Thematic Emerging Funds | 3 | 4 | 0 | 0 | Siddhartha prompts Boris on his angel-to-LP evolution, specifically asking about check sizes, early allocations, and specific Indian manager bets. Boris explains his disciplined LP strategy of writing checks roughly equal to 1% of sub-$30M fund sizes. | |
| Venture Liquidity Cycles and Long-Term Horizon Realities | 4 | 5 | 1 | 2 | Siddhartha questions why investors should lock up capital in illiquid VC funds when public equities return 15 to 20 percent. Boris explains the power law of venture, emphasizing 10-to-15-year realization horizons and why early-stage outlier returns still justify the illiquidity premium. | |
| Core Tenets of Fund Outperformance: Founder Taste and Ownership | 4 | 6 | 1 | 1 | Siddhartha asks whether LPs should favor lower entry valuations or premium second-time founders. Boris reframes the trade-off, arguing that taste cannot be taught and warning that second-time founders often raise too much capital, locking them into rigid top-down theses that hinder pivots. | |
| Analyzing Startup and Fund Failures in Venture Capital | 3 | 5 | 0 | 0 | Siddhartha explores what causes venture investments and funds to fail. Boris categorizes startup failure modes into market timing assumptions, internal founder misalignment, and unbalanced technical versus go-to-market skill sets. | |
| Version One's Outlier Successes Across SaaS and Crypto | 3 | 5 | 1 | 0 | Boris reflects on Version One's biggest winners across SaaS and crypto, and offers a contrarian view on AI, noting that existing distribution and data heavily favor incumbents rather than early-stage startups. | |
| India's Macro Opportunity: Reverse Brain Drain and Global Ambition | 3 | 5 | 0 | 0 | Siddhartha asks what macro factors make India attractive compared to China two decades ago. Boris outlines the reverse brain drain of North American-educated talent returning home and distinguishes between 'India for India' and 'India for the world' plays. | |
| Evaluating Indian Founders: Global Proximity and Hustle Advantage | 3 | 4 | 0 | 0 | Siddhartha asks about the core advantages and hustle of Indian entrepreneurs. Boris acknowledges superior engineering cost advantages and intense ambition, but highlights the structural disadvantage of geographic distance when selling to Western customers. | |
| Institutional LP Dynamics and the Democratization of Fund Creation | 5 | 5 | 1 | 1 | Siddhartha details how the venture industry democratized from an Ivy League club to a competitive founder market. Boris agrees but points out that institutional LPs still face structural check-size barriers that prevent them from investing in sub-$25M emerging funds. | |
| Fundraising Framework for Emerging Managers: The Minimum Viable Fund | 3 | 6 | 1 | 0 | Siddhartha asks for actionable fundraising advice for first-time managers. Boris outlines his 'Minimum Viable Fund' framework, urging managers to right-size their fund to their core strategy and find differentiated wedges rather than pitching generic funds. | |
| Navigating Macro Cycles: Dot-Com Crash, GFC, and Current Realities | 3 | 6 | 0 | 0 | Siddhartha asks Boris to evaluate the current market downturn against past crashes. Boris compares the 2000 dot-com nuclear winter, the 2008 GFC, and the post-pandemic rate environment, noting that top companies consistently emerge from cyclical troughs. | |
| Inside Andreessen Horowitz: Startup Innovation Applied to VC | 4 | 6 | 1 | 1 | Siddhartha asks about Boris's role as a board partner at Andreessen Horowitz and how a16z surpassed legacy venture firms. Boris explains that Marc and Ben broke traditional VC conventions by running the firm like an agile, experimenting tech startup. | |
| Personal Asset Allocation and Long-Term Horizon Strategy | 3 | 4 | 0 | 0 | Siddhartha inquires into Boris's personal asset allocation and deployment pacing. Boris shares why he keeps the vast majority of his personal net worth in illiquid early-stage tech, driven by asymmetric deal flow and a long personal time horizon. | |
| Conclusion and Appreciation for the Global Startup Ecosystem | 2 | 1 | 0 | 0 | Siddhartha summarizes Boris's international trajectory and wraps up the interview. Boris expresses gratitude and reiterates his passion for backing early-stage founders globally. |
Statements from this episode (22)
Boris Wertz has backed roughly 30 emerging fund managers, starting with Haystack
“One of the first one I backed was Haystack, which is an early stage fund out of the US Simil Shah that was about somewhere eight years ago. And then over the years, I've increased kind of this to about 30 emerging managers that have backed.”
Boris Wertz has backed five emerging Indian VC funds, including Better Capital
“So there's in total five, there is Better Capital. There is Boldcap, there's Grayscale, there's Shilov in 1947, and then Utsav with IC. So that's the five emergent managers I backed.”
Wertz targets $100K–$350K LP checks representing 1% of an emerging fund
“So usually I do in, I think about it and roughly kind of one percent of the fund size, right? So that, that usually is anything from a 100,000 at the low end to two 53 and a half thousand at the higher end.”
Boris Wertz limits his LP investments to venture funds capped at $30M
“I really think fund size matters in terms of the potential for returns. And so ideally I want to stay in funds that are below 20 max, thirty million dollars.”
Version One's 2012 vintage fund has returned over 1x after 12 years
“In our fund one, which was raised in 2012 we invested in 20 companies We still have four of those companies in the portfolio. So kind of close, close to 20% in the portfolio. We've paid back the fund more than once, right?”
Wertz predicts 2021 and 2022 startup vintages will take longer to mature
“I think especially in everything that was invested in, in 21 and 22 will take even longer, right? Because most of the startups that got invested in, in that period of time were a little earlier, a little less mature given the hotness of the market.”
Wertz's LP portfolio includes 10x–20x crypto funds and multiple 6x–8x funds
“I mean, definitely the crypto funds are more in the 10 to 20 X axis, right? And they have done well, but there's a bunch of funds in the portfolio that are at least on paper six to eight X funds, right? And obviously funds that were more raised in the kind of …”
Undisciplined emerging managers hurt returns with undersized checks and over-concentration
“Especially emerging managers sometimes are not as disciplined around portfolio construction. They suddenly end up with tons of really small investments where they put in a small check. But even if that company does super well, it doesn't really drive any fund …”
Wertz: VC portfolio construction can be learned, but founder taste cannot
“So you know, kind of that, that certainly can always be fixed over time and kind of managers can learn proper portfolio construction. What can't be fixed is your taste for entrepreneurs and for unique opportunities that can become these outlier opportunities.”
Second-time founders often fail by raising too much money before product-market fit
“Lots of second time openers that were able to raise lots of money very quickly came down with a top down thesis on, on a market. Right. And Never really got to product market fit because the team that they were able to build because the capital they could rais…”
Version One Ventures invested in sales engagement startup Outreach at pre-seed
“We have a company called Outreach in the sales engagement space, which was The last allegation was 4.5 billion and be invested at the pre-seed.”
Version One Ventures was the first pre-seed investor in billion-dollar startup Jobber
“We have a company called Java, which is a vertical fast for home services business that is valid at about a billion dollars. We were the first investor in the pre-seed round.”
Version One Ventures' crypto portfolio includes early investments in Coinbase and Uniswap
“So we're invested in Coinbase which obviously is a public centralized exchange and crypto platform. We were investors in Uniswap, which is the decentralized version of an exchange in the crypto space kind of multi-billion dollar outcome.”
Version One remains bullish on crypto because traditional banks cannot effectively compete
“We're still very bullish on crypto, right? I mean, crypto has gone through lots of ups and downs and lots of cycles, but the ultimately ultimate idea of rebuilding the financial system on a global scale in an open source environment. Is still a very attractive…”
Boris Wertz argues India's current economic trajectory resembles China two decades ago
“High level thesis for me is really India feels like China two decades ago, increasing population, increasing middle-class geopolitical in a super interesting spot where people try to move out of China and move into India.”
Wertz: A reverse brain drain from North America is powering Indian startups
“What you're seeing is just the reverse brain drain of people that Indian people that have studied in the US, have worked in the US or Canada for that matter. And I know going back to India to build startups again and kind of bring lots of learnings and lesson …”
Wertz: The average Indian entrepreneur is hungrier than their North American peers
“I mean, no question about it. I think the average entrepreneur in India is hungrier than the average entrepreneur in, in, in, in North America, but there's an incredible hustle culture there.”
Historical data shows emerging managers' first and second funds generate top returns
“History has shown fund one and twos of lots of emerging managers have done exceptionally well and kind of created some of the best returns.”
Emerging managers should raise a 'minimum viable fund' to prove their strategy
“I think everyone should kind of think about what is the investment strategy and then what is the minimal viable fund to prove out that investment strategy.”
Wertz: The venture market has bottomed out but may never reach 2021
“So I feel like we've definitely hit bottom and kind of there's optimism coming back into the market. I mean, obviously it's still far away from kind of what we saw in 21 and we might never get back to 21.”
Wertz: Andreessen Horowitz succeeded by operating and scaling like a tech startup
“They really thought about building A-C-C-C like a startup, right? And not like a traditional venture firm. And that curiosity of how do you find product market fit? How do we experiment a lot? How do we scale aggressively? That was just pretty fascinating to s…”