Lee: Mega-funds give junior VCs $2M-$4M checkbooks as training wheels
Aileen Lee · VC State of the Market with SaaStr CEO Jason Lemkin and Cowboy Ventures Founder & MP Aileen Lee · Sep 15, 2022 · at 17:29
Aileen Lee explains the structural dynamics of mega-funds and how inexperienced junior investors were empowered with checkbooks during the late bull market.
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“There's a lot of, like, basically, as these funds got bigger, they had more fee income. And so they could feed more mouths. And they would hire younger people and say, you have a checkbook. Like, you don't have a big checkbook like I have. Like, you know, the part, the general partners could write 20, 5000, hundred fifty million dollar checks. The younger people are given checkbooks to write A two million dollar check. A four million dollar check. That way if they don't work out and you let them go, you're not actually losing that much money. And it's kind of like training wheels for the next generation investors.”
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