Insight
Doddala: Pre-seed and seed funds perform best sized between $25M and $125M
“For seed and pre-seed, we've taken the approach of, we think smaller managers are better suited to invest in seed and pre-seed. We, you know, we have a long tail of 25, you know, ish firms in, in that and most of those we've added in the last sort of three yea…”
Disclosure
Churchill drops seed GPs who scale fund sizes past $125M to $150M
“And if you quote, scale beyond that size, you likely won't be part of our portfolio anymore. We think, you know, especially seed and pre-seed is sort of a boutique business, and we don't think it should scale to hundreds of millions of dollars. So if you end u…”
Prediction Open · timeframe Jul 2029
Doddala: 60% of 2021-2022 unicorns will probably never realize their valuations
“I think, 60% of the unicorns that were marked up in, you know, in our 20, 21, 20, 22, Are probably not going to ever realize their markups.”
Assertion Supported
Doddala: The median venture exit outcome over 30 years is $90 million
“I looked at some data, the exit data for the last 25 or 30 years. Median outcome is about ninety million, believe it or not.”
Assertion Contradicted
Doddala: Only about 300 US public companies are currently worth over $1B
“If you look at all the public companies in the US today companies that are worth more than a billion is about 300 companies.”
Insight
Doddala: $50M seed funds only need $220M in total outcomes for 3x net
“If you're a fifty million dollar seed fund, to do a three X, you have to produce a total of maybe two hundred and twenty million in total outcomes. There's a number of ways to do that, and they have a lot more optionality. In their outcomes than a large fund.”
Insight
Doddala: VC managers need 8 to 10 years to outgrow emerging manager status
“In our opinion, it's less about how many funds you've had, but we think it takes about, you know, eight to 10 years for your portfolio strategy to sort of settle into one that really designed to take advantage of whatever your strengths are as a manager. And t…”
Insight
Doddala: LP co-investments shorten the J-curve and boost net returns
“And the co-investments is a great way, sort of de-risked companies later on in the life cycle is a great way to not only shorten the J curve a little bit, But also maybe a higher return because some, you know, a lot of the times co-investments tend to be lower…”
Insight
Doddala: LP underwriting requires forecasting a GP's behavior over 20+ years
“Especially seed and pre-seed managers. You're underwriting as much as the track record, but also you as people. We're forecasting how you'll behave for the next 10 to, you know, a lot of cases, 20 plus years. And we're forecasting how you know, what kind of de…”
Disclosure
Doddala: Churchill predominantly backs Fund III, IV, and V early-stage managers
“We do do fun ones, not many. We do a handful of fun ones. We think it's important to discover new managers and sort of bet on them when they're before they scale. But in, you know, typically, you know, a fun ones and fun twos are rare, but they do happen, but …”
Disclosure
Churchill will not back first-time fund managers without prior track records
“What we don't do is we don't invest in managers in fund one if they had no investing experience whatsoever. If this is the first time they're writing a check, that would never even pass the first email through us. So in that case, what we'd look for is typical…”
Assertion Supported
Doddala: 2.8x to 3.0x DPI typically marks top-quartile venture fund performance
“Typically 2.8 to three puts you in the top quartile on depending on the vintage and some vintages, it may not, some vintages, it may put you in the top decile.”
Insight
Doddala: Unique domain superpower is the biggest predictor of seed VC success
“Are you, do you, what is your unique, you know, I don't want to be corny, but what is your superpower? Are you are you someone who's well-respected in a narrow field of data and open source? I'm just going to pick, you know, just picking that as an example. Yo…”
Opinion
Doddala: VC fundraising has normalized after an anomalous 2018-2022 boom
“There's no doubt that the fundraising environment has become tighter. But I would say we're sort of back to normal. We think sort of the 2020 to 20 22 maybe even 2018, 2019 to 20 22, sort of three or four year period sort of an anomaly”
Insight
Doddala: Gross returns are meaningless to LPs; you must present net returns
“Gross is meaningless to LPs. You have to have net net of fees.”
Assertion Not checkable as stated
Doddala: US private companies have faced their longest liquidity drought
“Public markets in the US have been I mean, some people say they're closed, they're not it's just the criteria for, you know, what a successful IPO candidate has been changing and moving around. So you know, we've sort of had probably the longest period of you …”
Opinion
Doddala: Top venture fund of funds include VenCap, StepStone, and Sapphire
“In terms of size probably vent cap. They, they've been around a long time. There's one called vintage investment partners out of Tel Aviv and, or from forgetting the large us one step stone is a large, has a large fund of funds. Sapphire Ventures has a sizable…”
Disclosure
Doddala: Churchill invests proprietary capital from parent TIAA rather than LP funds
“We have yet to take third party capital. We're currently investing our own capital source of work for this strategy, the source of our capital is our nonprofit parent. Called TIAA.”
Insight
Doddala: Venture performance has far wider quartile dispersion than private equity
“There's a lot of dispersion between the performance of top quartile and bottom quartile. Not so much dispersion in private equity, but in venture.”
Disclosure
Churchill AM targets 5% to 15% of total fund size for seed checks
“For seed and pre-seed, the way we think about it is anywhere from five to 15% of the fund size is sort of what we look for in terms of the check size, depending on our familiarity with the manager or experience with the manager and their track record.”
Assertion Not checkable as stated
Churchill AM commits to 8% to 10% of 300 venture funds evaluated annually
“We see two to 300 firms a year and we're very selective so call it, you know, eight to 10% of the funds that we see we commit to.”
Disclosure
Churchill's venture portfolio is 90% US and 10% Israel
“In our portfolio, we're in the U.S., so we're about 90% U.S., 10% Israel. And in the US predominantly, probably 70% California, even in California out of the 70% that we have in California, probably 70% in the Bay Area and maybe 30% in LA, an increasingly grow…”
Assertion Not checkable as stated
Doddala: Common seed portfolio size is 20-40 companies with 30-40% reserves
“The most common we see is sort of 20 to 30 companies, maybe 40 and 30 to 40% reserves follow ons for pro rata.”
Disclosure
Doddala: Churchill will make its first India venture investment before 2030
“No, no, no. It'll be sooner than that. You know, usually takes about a year for us to get to know an ecosystem. So we hope to do that work soon.”
