Insight
Walk: Underperforming VC funds take a decade or more to exit
“It takes, you know, a decade or more, you know, barring a real firm, you know, a partnership breakup or you know, something illegal, you know, right? Like it takes a decade or more for a underperforming fund To actually exit the market.”
Insight
Hunter Walk: Only 5% of VCs are exceptional and 5% are horrible
“And then you get inside the industry and you realize like, actually it's a single hump. There's five percent of VCs who are really, really good at what they do. And even part of that is self-awareness, right? Oh, I'm best in these situations and this stage of …”
Opinion
Walk: Raising larger venture funds without structural planning hurts LPs and founders
“Like all of those are implications that I think actually when venture firms don't consider and they just raise more money and then figure it out as they go, like are bad for LPs and bad for founders and thus bad for those firms.”
Assertion Not checkable as stated
Hunter Walk: Homebrew's 2013 fund ranks in the top one percent
“Like, even if that fund didn't return another dollar, we'd be like a top one percent fund, and fortunately, it's gonna return more dollars.”
Assertion Supported
Hunter Walk: Midas List inclusion forces confidential disclosures and deal attribution
“Anyone who's on the Midas list no matter what their firm says, they've turned over, you know, information to a third party about their portfolio. And they've decided internally that somebody gets to claim credit for that deal. Whether it's the person who deser…”
Prediction Not checkable as stated
Walk: Differentiated new venture managers will eat mediocre firms' lunch
“I think it's a great time to be a differentiated quote unquote new manager, right? They are going to eat the lunch of mediocre firms, you know, slow moving firms.”
Insight
Walk: Giving different pitches to founders and LPs is duplicitous
“To the extent that those answers, the answers you would tell a founder are different than what you tell an LP. I think at best it's confusing and at worst it's duplicitous, right? Like you're sort of somebody's the rube, right?”
Insight
Hunter Walk: Do not use AUM growth to measure fund success
“Don't use AUM or increasing AUM as a measuring size for your success, for your momentum, for anything.”
Disclosure
Walk: Homebrew gives carried interest to every employee at the firm
“We've always given anybody who works for homebrew carry in the fund. So our head of ops, you know, executive assistant, our head of talent in addition to getting salaries and bonuses, they are, they get unbounded upside. In our success.”
Disclosure
Walk: Homebrew IV invests assuming it will only write one check
“When we write a check into a company as homebrew four we hope to have the opportunity to continue to support or, you know, put more capital in if it makes sense, but we make it, we write that check, assuming It'll be the only check we write and that the juice …”
Insight
Hunter Walk: An investor's thesis is their portfolio, not their blog posts
“Your thesis is your portfolio page. It's not your tweets. It's not your blog post. It's not your market maps. The saddest thing in the world is to be an investor who, like, gets all of those right, but then doesn't invest in the best companies. ... Then you're…”
Insight
Walk: The venture capital industry moves quickly only out of fear or greed
“Venture, venture moves quickly out of fear or greed. Everything else is slow, right?”
Insight
Walk: Fund I is raised on potential, II momentum, III results
“Fund one gets raised on potential fund two gets raised on momentum and fund three gets raised on results.”
Insight
Walk: Emerging VC managers should change only one thing for Fund 2
“Fund two shouldn't necessarily, shouldn't change too much. Like if you're adding, like, sometimes I see people try to add a partner Move up a weight class in terms of like, as opposed to one to three percent, now I'm gonna lead rounds, or, you know, they try t…”
Disclosure
Walk: Homebrew had extreme LP concentration in its first two funds
“We went from four LPs in our first one that made up, like, 90% to eight in the second one that made up about, like, 97%”
Disclosure
Walk: Homebrew targets 10-12 annual seed investments of $100k-$500k
“We're going to keep our firm together. We're going to make the same number of investments each year, 10 to 12. But instead of having an ownership target that forces a certain check size, so, and so forth, we're going to write most checks between a hundred K an…”
Assertion Supported
Walk: Homebrew has made roughly 28 investments under its evergreen model
“You know, we've made 28 investments or so. I think we're just closing on a 29th a hundred percent, you know, a hundred percent win rate, you know, for whatever that's worth type of thing.”
Disclosure
Hunter Walk: Homebrew's first two funds achieved over 120% capital recycling
“Our first two funds, I think are all maybe are a hundred north of a 120% recycling. So we really double triple down recycling as people, you know, I was using the example before of you draw down fees, right. But you have to invest the whole amount recycling is…”
Disclosure
Walk: Screen Door writes 10% anchor checks for emerging VC funds
“Screen Door tries to help anchor a fund by, if it's a twenty million dollar fund, writing a two million dollar check. If it's a hundred million dollar fund, writing a ten million dollar check. So we're a big, big sum of capital.”
Assertion Not checkable as stated
Walk: Screen Door received over 700 emerging manager applications last year
“Last year we got over 700 applications.”
Hunter Walk