OpenLP aggregates & amplifies insights across the venture ecosystem to demystify the LP perspective. Continuing to you soon from LGT Capital Partners
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📣Sharing an update: OpenLP is moving to LGT Capital Partners!
OpenLP founders @Beezer232, @LauraLPThompson & @natewcl, along with other @SapphirePrtnrs fund investing team members Dan Clayton, Vittorio Reynoso-Avila & Anna Jacoby, will be joining LGT on April 15!
OpenLP will continue under LGT, and you will still receive the OpenLP newsletter, as well as new episodes of the Origins Pod alongside co-host @nchirls.
Stay tuned for more updates from LGT and OpenLP coming soon!
Read more about the news here: lgtcp.com/lgt-capital-partne…
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1/ 🧵New @PitchBook data reveals that the journey from a first to a sophomore fund has never been more daunting. Historically (2006-2018), 63% of first-time managers were able to raise a second fund, but the current environment suggests a much tougher road ahead. Let’s dig in on emerging #fundraising ⬇️
ALT First-time VC managers that raised a second VC fund as a share of all first-time VC managers
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1/🧵"Portfolio construction is crucial. Winning the best deals will not be meaningful if capital is not deployed thoughtfully. 55% of all funds formed don’t return 1x."
@bonfire_vc co-founder @DoubleMcapital shared the art & science of portfolio construction w @KauffmanFellows & gave us a peek at the deck👇
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✨ Big news today from #OpenLP ✨
The OpenLP.com website now has:
- a dedicated Emerging Manager section 🍾
- a new look 🌟
- and improved site navigation 🧭
#OpenLP is the one-stop shop for aspiring and established investors to learn about the venture ecosystem.
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1/ 🧵37% of first-time VCs who closed funds between 2019 and 2021 will not be able to raise a second fund, potentially wiping out a year and a half of new VC managers, according to @PitchBook.
@VCJournal draws on data from our recent tweet thread & shares tips to help emerging managers nail that crucial sophomore fund 👇
ALT Crossing the chasm: The difficult journey from Fund I to II
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#OpenLP is taking it to the next level, we are launching our own Twitter account ✨.
Follow for insights across the entrepreneur ➡ GP ➡ LP venture ecosystem.
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1/ 6 key takeaways & 📊s on the expanding emerging manager landscape from @StepStoneVC's recent report: Venture capital: Shedding the "access class" label. 👇
Read the full report here: stepstonegroup.com/news-insi…
#VC #EmergingManagers
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📊 Small VC funds vs. large VC funds by the numbers from @Samirkaji, CEO at Allocate👇
Small Funds (0-100MM):
- Mean TVPI: 4.3
- Standard Deviation: 2.4
- Median Portfolio Companies: 26
Mid-Sized Funds (100-250MM):
- Mean TVPI: 3.6
- Standard Deviation: 2.0
- Median Portfolio Companies: 24
Mid-Large (250-500MM):
- Mean TVPI: 3.0
- Standard Deviation: 1.2
- Median Portfolio Companies: 35
Large (500MM+):
- Mean TVPI: 2.7
- Standard Deviation: 0.9
- Median Portfolio Companies: 43
Read more: linkedin.com/posts/samirkaji…
#VentureCapital #InvestmentStrategy
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New data on Capital Calls! ☎️
Everyone's talking about #VC pacing slow down, but we've seen less data around capital calls & how the past several quarters compare to ’20-‘21.
🧵@EvanTarzian & @LauraLPThompson dug into @SapphirePrtnrs’ early-stage mngr data & the findings are 🤯
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For aspiring fund managers from underrepresented backgrounds, @screendoorvc is a game-changer 🤩🤩🤩
Well done @satyap, @hunterwalk, @chudson, @km, @SLP_EDU, @aileenlee, @kirstenagreen, @eva_ho, @labunleashed, @chrisfhoward, @Beezer232 + the whole team!
forbes.com/sites/alexkonrad/…
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For as powerful of a mechanism as fund recycling can be, it is an under discussed strategy in venture investing.
A new #OpenLP blog by @LauraLPThompson + @Hillary__Cook illustrates the power of recycling →
♻️💪♻️💪♻️💪
sapphireventures.com/blog/fu…
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Great piece from @samirkaji on why emerging mgrs are critical to a well-rounded #VC portfolio:
-Clear focus on core competency & maximizing rtrns
-Alignment w investors (motivated to “emerge”)
-Opportunity to gen outsized outcomes from a single position
bit.ly/3vZkaQo
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Are LPs closed for business? What has changed in what they want to see in managers? And how will LP markets change over the next 12 months? 🤔
@SapphirePrtnrs' Partner, @Beezer232, shares her insights on the current LP landscape on the latest episode of @twentyminutevc, hosted by @HarryStebbings. 💥💥💥
Listen to the episode below for Beezer’s POV on the topic, as well as:
- What has changed about the size and pace of new commitments for LPs
- Why the incentive mechanism for LPs is broken today in many ways
- The strongest belief Beezer held that turned out to be wrong
- And much more... 👀
🎧Spotify: spoti.fi/3M5AMhJ
🎧Apple: apple.co/3Qlxjhh
#OpenLP #VC
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“Where can you get really good returns? It’s the smaller fund sizes and emerging managers.”
— @SapphirePrtnrs' @LauraLPThompson on whether LPs are missing out on potential upside by consistently choosing established fund managers over emerging ones in @PitchBook 👇
pitchbook.com/news/articles/…
#VC #Fundraising
ALT The weight of the emerging manager
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🎧@AcquiredFM has the latest must-listen podcast
@altcap Partner @MeghanKReynolds (fmr @tpg) talks strategic capital formation w @gilbert & @djrosent: Why it's much more than IR + #fundraising; how/why it's going to change dramatically in the next decade
acquired.fm/episodes/capital…
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📊 Sharing interim #EMVC graduation rates from our historical data (1995-2020). Here’s the breakdown on average for emerging managers via @SapphirePrtnrs:
— Fund I-II: 51%
— Fund II-III: 54%
— Fund III-IV: 58%
— The overall odds of moving from Fund I to IV stand at just ~17% (1995 – 2014)
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Between Greylock's new $500m seed fund, and a16z's $400m seed fund... "The seed market is bifurcating, but the barbell isn't necessarily a threat to smaller investors." -@imkialikethecar
Featuring commentary from @Beezer232, @semil, + @ericbahn.
axios.com/newsletters/axios-…
#OpenLP
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"If you’re a fund manager without a strong private wealth pipeline, you’re going to be in trouble. If you’re an institution without a true emerging manager program, you’re also going to be in trouble." - @HeatherHartnett of @Human_Ventures
forbes.com/sites/heatherhart…
#OpenLP
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49%... 56%... 65%!
Wowza, these annual return numbers are 🤯🤯🤯
"Large college endowments have notched their biggest investment gains in decades, thanks to portfolios boosted by huge VC returns and soaring stock markets."
wsj.com/articles/university-… by @eliotwb
#OpenLP
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"What's the best tech stack for #VCs?" -A question that we all ask ourselves routinely. 🤔🤔🤔
Here's some crowdsourced insight, courtesy of @megafu of @seedcamp.
miguelpinho.medium.com/2021-…
#OpenLP
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1/ 🎙 5 podcasts with invaluable LP & GP insights you might have missed over the holidays. Add these to your commute queue!👇
ALT 5 LP & GP Podcasts
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2/ 🏗️ An overview of the #portfolioconstruction fundamentals:
Everything is interrelated – you have to look at the whole picture. Portfolio construction can completely change the trajectory of a fund - for better or for worse.
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Coming 🔜 to your inbox - Our Year in Review newsletter, sharing a roundup of the greatest hits from 2023, plus VC predictions on what's to come in the new year. Subscribe below.
Topics covered include:
- Capital Formation & the LP / GP Relationship
- VC Decks that Close LPs
- Reflecting on a Flaw in VC
- The Forbes Family Trust's Approach to VC
- + More...
👉 lnkd.in/gGi3YaDx
#openlp #vc
ALT OpenLP Newsletter
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Is it better to index venture as broadly as possible in the hopes of unearthing winning outliers?
Or to concentrate resources on a smaller number of investments, so as to maximize returns on winners?
An LP's take on portfolio construction ➡️
openvc.app//blog/vc-portfoli…
#OpenLP
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💥@skupor quite literally wrote the book on venture. 15 yrs ago, he was @pmarca & @bhorowitz’s first hire at @a16z & today he joins us as our first guest on the 🆕season of the Origins Pod - out now!💯
Scott joins co-hosts @beezer232 & @nchirls to discuss:
👉 a16z’s decentralized business model & keeping cultural values
👉 Managing LP/GP expectations in the current environment (e.g. markdowns)
👉 The fund size debate & what is the TAM today
👉The state of venture w AI’s inflection point + valuation corrections
👉What's changed since “Secrets of Sandhill Road” was written 5 yrs ago
…and much more 👀
▶️Apple Podcasts:podcasts.apple.com/am/podcas…
▶️Spotify: open.spotify.com/episode/0ku…
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Short 🧵: There's a lot of talk about the coming "emerging manager apocalypse" given the tough fundraising market this year. Let’s put it into historical context.
TLDR: 2023 was tough and 2024 appears to be following suit - but for better or worse, it has never been easy to go from a first time venture fund to established.
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👏TY to @HarryStebbings, @Chalfs, @katherinewu, @fredwilson, @hunterwalk, @bizcarson, @pitchbook, @nvca & the many more who shared insights in this month's #OpenLP newsletter💫
🔗👇 for perspectives from the bright minds of the venture ecosystem
bit.ly/3ShP1Bk
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Family offices tend to be the most opaque genre of #LPs in the venture investing landscape.
So what does family office involvement in venture actually look like?
Here's a snapshot, thanks to a new study by @oper8rio + @firstrepublic ➡️
oper8r.substack.com/p/analys…
#OpenLP
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1/ Tools and workflows VCs use to save time running their funds from @weekendfund's @rrhoover and @vedikaja_in👇
Read @signatureblock_ for more: linkedin.com/pulse/workflows…
#OpenLP #VCWorkflows
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🎙️ @SapphirePrtnrs' @Beezer232 pulls back the curtain to dive deep into the LP-GP relationship w/ @Mikeeisenberg on the latest Invested podcast by @Aleph, covering:
- “What’s the pitch for young VCs looking to get your money?” // “The simple answer is: ‘why you.’”
- How LPs build portfolios & how the financial returns differ: “Some folks do it for the directs. They don't do it for the fund returns. Some people are trying different business solutions.”
- What raises a 🚩in fund evaluation: “Portfolio construction. A lot of times, people simply don’t run the math as to what will make for a good exit.”
- Core traits to look for in VCs: “Ambition. Curiosity. Wanting to change the world.”
🎧 Link to listen below
The most intense and inside baseball VC GP/LP conversation ever with the one and only @Beezer232 .
Can you get into VC during this downturn?
Am I too old to continue investing in venture?
Israel? China?
Groupthink in GPs and LPs?
Link to full episode in next tweet▶️
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"No one is as fast to decide as a solo #GP."
Elite #LPs are betting on solo #VCs because they recognize these investors are not only exceptionally well-connected in the tech ecosystem, but are also desirable partners to many founders.
pitchbook.com/news/articles/…
by @MTemkin
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📣The last Origins episode of the year is dropping tomorrow, and you won’t want to miss it!
VenCap’s @daveclark85 joins hosts @nchirls of @notationcapital & @sapphireprtnrs’ @beezer232 to lift the hood on venture performance.
As 3 individuals with 3 unique strategies - Nick, emerging manager; David, LP investing in established; & Beezer, LP investing in emerging & established - find out how their models differ & what David’s return data shows.
Subscribe below👇
🎧open.spotify.com/show/23H0tO…
#OpenLP #OriginsPodcast
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62% of LPs say the risk/return profile for emerging managers is attractive relative to established firms.
Still, it remains an uphill battle for EMs to raise funds.
Here's how to stand out, courtesy of @recastcapital's @courtneyrmccrea + @SaraZulkosky.
news.crunchbase.com/news/eme…
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@NeilDatta18, Managing Director of @OptimaAssetMgt, sat down with Co-host of the Limited Partner podcast and Co-founder of @10XCapitalVC, @DWeisburd, to speak candidly about VC in 2023.
Topics covered include:
- Institutional diligence on VC
- Which stage to invest into vc
- Portfolio construction for an institutional endowment
- Correlation and lessons from the last crisis
- and much more!
Listen + subscribe 👇
🎧 Spotify: lnkd.in/g4a8G8Tz
🎧 Apple: lnkd.in/gNkVXRD4
CC: @eriktorenberg
#OpenLP #LPs #VentureCapital
Spotify: open.spotify.com/episode/0ZH…
Apple: podcasts.apple.com/us/podcas…
Youtube: piped.video/watch?v=c1h75hmf…
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There’s been talk of a slowdown in VC funding recently BUT ... "Our inboxes are filled with news about newly raised venture funds," says @christinemhall of @TechCrunch.
So the fundraising picture remains “cloudy” at best.
techcrunch.com/2022/04/11/a-…
#OpenLP
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💥 Huge news in #LP world. 💥
Yale's new CIO, Matthew Mendelsohn, cut his LP teeth on venture, and now reveals that Yale's venture portfolio "represents a quarter of its entire fund and has returned an average of 21.6% a year, well above the 12.4% of the endowment as a whole."
Matthew Mendelsohn's promotion says a lot about how important VC has become for big endowments.
Yale revealed its venture portfolio represents a quarter of its entire $31b fund and has been by far the best performer, returning 21.6% a year.
businessinsider.com/how-yale…
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2 yrs ago, @QEDInvestors’ @fintechjunkie said a change was coming to the VC ecosystem… today he says it’s coming true. 🔮
6-time Midas Hall of Famer Frank Rotman joins @nchirls & @beezer232 on the latest episode of the 🎙️Origins podcast 🎙️to dive into how his predictions are unfolding, the fatal flaw in VC, what he’s seeing in the market & more.
Links to listen 👇
#OpenLP #OriginsPodcast
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Don't miss the newest episode of Capital Allocators by @tseides 🎧
This time @Beezer232 chats with @nbt + @msmith492 of @footworkvc about the nitty gritty of how they closed their (very oversubscribed!) first fund earlier this year. 🔥
capitalallocators.com/podcas…
#OpenLP
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Gotta say, we are LOVING this new swag from @HustleFundVC ❤️❤️❤️
Three winners will get a one hour workshop with @dunkhippo33 and @ericbahn + Hustle Fund merch. Check out how to apply here 👇
contest.hustlefund.vc/
#OpenLP
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Podcast alert🚨: Fund-of-funds LP @MKRocks of @CendanaCapital on emerging #VCs (+ what he's looking for when meeting a new VC), the evolution of seed investing, tips for raising an inaugural fund, the process for raising capital from a FoF, and much more.
podcasts.apple.com/us/podcas…
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Missed this month's #OpenLP newsletter? Check out all the goodies here:
news.sapphireventures.com/op…
With contributions from @cape, @hunterwalk, @Beezer232, @BlueFutureTeam, @cdouvos, @Samirkaji, @guyperelmuter, @MMCandyCheng, @loganbartlett, @EricNewcomer, @leehower + @alexrkonrad
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🆕Ep of Origins drops next week w/ @QEDInvestors’ @fintechjunkie covering what it takes to be a great investor, the fundamental flaw in the way founders and investors have been funding startups, how VCs can avoid being left in the exhaust of larger firms, and more...👇
Stay tuned & subscribe below to catch the ep next week!
🎧Spotify: open.spotify.com/show/23H0tO…
🎧Apple: podcasts.apple.com/us/podcas…
@nchirls @beezer232
#OpenLP #OriginsPodcast
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Hey institutional investors - Check out the upcoming @PlexoCapital Summit, featuring #LP thought leaders and promising new fund managers.
Agenda: plexo-capital-gpx.mykajabi.c…
Registration: plexocap.sherpadm.com/client…
cc: @lo_toney
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Very excited for Sapphire Partners’ @Beezer232 on her appointment to the @NVCA board of directors 👏🏽👏🏽👏🏽 As the voice of the US #VC and #startup community, @NVCA advocates for public policy that supports the American entrepreneurial ecosystem. News here: prn.to/39XLhDf
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We know #VC is playing a bigger role in endowment investing. 💰
But did you know @NotreDame's venture portfolio (through funds) once helped fund ~35% of NASDAQ-listed co's?
@patrick_oshag chats w/ former Notre Dame CIO Scott Malpass. Give it a listen 🎧
joincolossus.com/episodes/77…
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“If you’re overly concentrated, you better be da*n good at your job ‘cause you just raised the bar too high.”
– @SapphirePrtnrs’ @Beezer232 discusses the nuances of concentrated vs diversified portfolios w/ Ahoy Capital's @cdouvos on the latest @SuperclustersLP, hosted by @AlchemistAcc's @cupazhou.
In this jeopardy style podcast, Beezer and Chris both share:
💎Something they once said to a GP that they regret
💎Best piece of advice a GP in their portfolio has shared with them
💎The most interesting fund model they’ve seen to date
💎What fund invested in 2020-2021 inflated valuations that they’ve re-upped on
💎Funds they passed on and regret
💎The founding story of OpenLP + much more
🎧 cupofzhou.com/the-limited-pa…
#VentureCapital
From 23-inch French fries to the founding story of @Open_LP to marine biology to passing on @Initialized Fund I and @Accel, fun is an understatement for our most recent @SuperclustersLP episode with the amazing @Beezer232 and @cdouvos!
👇
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8/ 🎨 👩🔬Portfolio construction is both an art and a science – and there’s no definitive playbook. Have a defined strategy, but be open to making exceptions and accept the role luck plays. 🍀 Models will adapt and evolve over time through market and technology cycles.
Access the full deck here for more insights & @DoubleMcapital’s advice for VCs 🙏
acrobat.adobe.com/id/urn:aai…
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LP perspective: What are the broader ramifications of the Sequoia fund restructuring news?
Liquidity options!
"We're generally supportive of increased flexibility allowing LPs to get money out and actualize returns," said @Beezer232.
businessinsider.com/silicon-…
by @MMCandyCheng
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From 2017-2019, 10% of capital closed went to women-led funds. But in 2020 women-led funds accounted for just 3.3% of the record-breaking inflow of capital.
We have work to do, team.
differentfunds.com/research/… @DifferentFunds
cc: @AllRaise, @womenvc, @FemaleFunders, @bywomenVCs
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What questions are venture LPs asking as we enter 2022? 🤔
🙏 to @Beezer232 for this insightful thread on investment pacing, "LP indigestion," the IPO market and more...
#OpenLP
Best wishes for 2022 everyone! 🎉
As we enter the new year, I wanted to share a bit of LP perspective.
We all know the venture market was on 🔥 in 2021, but how is that actually manifesting and what does that mean for how the proverbial table is being set for 2022?
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📣 @SapphirePrtnrs, co-founder of OpenLP, announced today they are launching a new emerging venture managers investment program with a sole LP, @CalSTRS, the world's largest educator-only pension fund!
Key things to know below.👇
1️⃣ This program is dedicated to investing in early stage U.S. emerging venture funds. (Emerging = Funds I, II, III)
2️⃣ As part of this program, Sapphire Partners is taking over management of five existing CalSTRS “New and Next Generation Manager Funds,” representing $1.4B AUM.*
3️⃣ And in addition to those existing funds, Sapphire Partners plans on investing about $100M/year into emerging early stage #vc firms.
4️⃣ This program is an expansion of Sapphire Partners’ existing platform. They will continue to make commitments to emerging and established managers in the U.S., Europe and Israel, and now have fresh $$$ to lean into backing even more emerging early-stage US #VCs.
Get Sapphire Partners’ perspective and learn what this partnership means for #EmergingManagers here: bit.ly/3LgK4ag
Read more about the news here: bit.ly/3ECOyUI
And more insights about the partnership from @Beezer232 👇
1/👑 Once upon a time, today's legendary venture funds were emerging managers…
Which is why today I’m excited to share that @SapphirePrtnrs is launching a new program to invest in emerging venture managers with a sole LP, @CalSTRS, the world's largest educator-only pension fund!
Why we are excited about this next chapter👇 🧵
As part of this new program, we are taking over the management of five existing CalSTRS “New and Next Generation Manager Funds,” representing $1.4B AUM.* Collectively, we have invested in 300+ emerging managers.
Our plan going forward is to invest ~$100M/year into emerging venture managers.🙌
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In the early stages of the life cycle of a fund, the most frequently used performance metrics (MOIC, TVPI, DPI, IRR) may not be very reliable...
So what are the key VC performance metrics beyond just common multiples?
bfp.vc/vc-performance-metric… by @marcocsolinas
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When building your LP base, there are three main factors to consider: value add, time orientation and due diligence process.
Excellent primer on "How To Build Your LP Base" by @BlueFutureTeam. 👍
bfp.vc/considerations-lp-bas…
#OpenLP
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🛎️ Podcast Alert 🛎️
The latest episode of the #OpenLP podcast miniseries drops today, this time featuring 🇪🇺European🇪🇺 tech ecosystem champion Saul Klein (@cape) of @localglobevc + @latitudevc.
sapphireventures.com/blog/th…
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The VC fundraising deck is perhaps the *most* critical tool GPs have at their disposal in winning over LPs.
With views into 100+ decks, @DifferentFunds walks us through how VCs are structuring their fundraising narratives and pitches to prospective LPs.
differentfunds.com/vc-deck-r…
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⚡ "The Real Power Brokers of Silicon Valley" ⚡
Don't miss this list of the top 50 university endowment LPs that invest in venture.
Special thanks to @thebenbergman + @meliarobin for compiling!
businessinsider.com/these-50…
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📢 #VC #EmergingManagers: Register for tomorrow's virtual panel: "The State of Play for Emerging Managers" - hosted by @firstrepublic!
Moderated by @VTimoney, @Beezer232 & @cdouvos will break down expectations for 2023 + advice on #fundraising & more 👇
pages.firstrepublic.com/evt-…
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"Many existing market leaders in dev tooling and infrastructure categories have not been reimagined or reinvented for 10-15 years...
There are many more categories to be rebuilt, and ambitious founders will be ready in 2024 as the VC spigot continues flowing for inception rounds." 🔮
— @edsim, Founder & Managing Partner at @Boldstartvc
More of Ed's predictions here: whatshotit.vc/p/whats-in-ent…
#2024predictions #VC
ALT 2024 Predictions
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Half of all #VC funds launched between 2009 + 2017 generated returns to investors that outperformed the S&P 500 and Russell 2000 net of all mgmt fees.
The conventional wisdom of only 5% of VC funds being good investments is off by an order of magnitude.
dan-malven.medium.com/why-in…
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Wondering how LPs assess emerging managers?
@BlueFutureTeam has pulled together a helpful framework to shed light on just this topic.
bfp.vc/lp-team-assessment-fr…
#OpenLP
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🆕Origins Podcast drops tmrw! @a16z Managing Partner @skupor joins co-hosts @beezer232 & @nchirls to discuss the state of VC & evolution of a16z over the last 15 yrs
🤖Tech inflection pt (#AI) + valuation correction = compelling yrs for new company formation & great VC vintages
☝️Just 1 of many great insights shared... stay tuned!
Follow on Spotify: open.spotify.com/show/23H0tO…
Subscribe on Apple Podcasts: podcasts.apple.com/am/podcas…
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📣 Calling all emerging #VC managers 📣
Want curated advice from an #LP? Get your application in for @VCForward's LP Office Hours program by 4/30.
#OpenLP
.@VCForward is hosting the next LP Office Hours program virtually on 6/3. This is a great opportunity for emerging VC fund managers from diverse backgrounds to meet with fund of fund LPs, experienced GPs & learn fundraising best practices. Apply by 4/30 ventureforwardlpofficehours-…
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What should VCs do with zombie companies?🧟♂️🪦
@coolwatercap's @dteten shares insights on managing zombie companies and highlights 3 key indicators to assess a startup's potential for a turnaround:
👉 Core employees are willing to work during the transition in part for equity or reduced wages, which shows their belief in the company
👉 Existing investors are willing to put in more money; and/or...
👉 The company is situated in a growing sector, where a rising tide can lift all boats
Read more: teten.com/what-should-vcs-do…
#VentureCapital
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Want to see what a fantastic quarterly LP letter looks like?
@wolfejosh of @Lux_Capital provides. 🙏🙏🙏
#OpenLP
1/ Releasing a redacted Lux quarterly letter to LPs.
Some strong views of
-a catalog of an excess of excesses
-what catalysts cause the current market frenzy to end
(preview: LP indigestion)
-what we are advising our Lux family companies
-much more…
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How much of selling positions as a VC is a science and how much is art? 🤔
@cupazhou shares what great #TVPI and #DPI look like before fund term and 3 frameworks to use when thinking about selling…
1⃣Sell to lock in meaningful DPI (At least 0.5x the fund).
2⃣Sell when you've lost conviction in the company and/or when the market has overpriced it.
3⃣Sell when the underlying asset is growing slower than your target portfolio's IRR. (If your portfolio is growing at 30%, and a portfolio company is growing at 10%).
Read more: cupofzhou.com/the-science-of…
#venturecapital #vc #GPs #LPs #emergingmanager #openlp #fundmanagement
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What role do emerging managers play in the construction of a compelling LP portfolio?🤔
Find out in the latest episode of The Limited Partner Podcast, hosted by @eriktorenberg and @DWeisburd, featuring @Beezer232, Partner at @SapphirePrtnrs.
Listen + subscribe 👇
open.spotify.com/episode/5NX…
CC: @TurpentineMedia
#VentureCapital #OpenLP
Beezer Clarkson on Her New $1.4B Emerging Manager Fund w/CalSTRS | E16
Hot on the heels of @SapphirePrtnrs’ announcement with @CalSTRS– one of the biggest allocators in the world – I recently caught up with @Beezer232, Partner at Sapphire Partners, to discuss how this new partnership will allow them to expand their ability to support the next generation of VC managers – all while continuing to focus on investing in the established. Key insight & timestamps, episode directly posted on the X platform 👇
“Historically speaking, the odds of an emerging manager going from Fund I to Fund IV are 17%. If you take that same data set and ask, how many Fund IVs make it to a Fund VIII, it’s 22%.”
#OpenLP
@turpentine
@eriktorenberg
Thank you to our sponsor @Tactyc.
(00:00) Episode Preview
(00:57) The Importance of LP Voices and Sapphire’s Partnership with CalSTRS
(02:15) Why Investing in Emerging Managers Have Such a Unique Dynamic
(04:09) The Role Emerging Managers Play in the Construction of a Compelling Portfolio
(06:16) Thousands of Emerging Managers vs Forty Established Funds
(07:30) Does Excess Capacity Translate to Adverse Selection?
(08:17) “LPs are like Snowflakes and They’re all Different.”
(10:49) Common Reasons Why LPs Don’t Re-up
(13:48) What Makes for a Great Manager?
(16:27) Episode Sponsor: Tactyc
(17:34) What Sapphire Looks for When Evaluating a New Manager
(19:00) Who Wins: Generalist v. Specialist
(21:57) Will Solo GPs be able to Survive in this Market?
(24:38) Beezer’s Predictions on Spinouts
(26:34) The Bias and Rationale Behind Institutional LPs Desire to Re-up in Existing Managers
(28:14) The New CalSTRS Program’s Investment Rubric on Checksize, Fund Size, Return Profile and Audit Requirements
(30:37) How LPs Can Bring Value to a Fund
(34:31) Why LPs are All Examining Their Portfolios
(36:42) Should GPs Focus on DPI or TVPI?
(39:01) Why Venture Needs More Innovation
(40:19) How LPs Diligence Managers
(44:15) The Importance of Transparency within the LP Ecosystem
(51:57) What Sapphire Invests In
(53:26) Lessons Learned from Previous Downturns
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The "Ask an LP" panel at today's #VCPlatformSummit spotlighted the critical role that Platform plays in supporting portfolio company success.
Fantastic insights from @SaraZulkosky, @lo_toney, @natewcl + @bolotsky.
Thanks for facilitating, @VCPlatform!
#OpenLP
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VC Investor Relations, in the words of @fredwilson of @usv:
"The VC’s 'customer' is the founder/CEO/portco and our LPs investors are our 'shareholders'."
"Frequency, regularity, and transparency are the key factors to focus on with investors."
avc.com/2021/08/vc-investor-…
#OpenLP
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Carveout's roundtable Fund of Funds event series will be live soon! Grab your virtual seat at the🔗 below, & don't miss @Beezer232 (Sapphire Partners), @lo_toney (@PlexoCapital), @tracyfong (Albourne Partners) & Abe Finkelstein (@Vintage_Inv) @ 10:30a PT!
withcarveout.com/request
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What obstacles does the venture industry face?
- 💰 The funding gap has widened
- 🎯 Becoming a VC is easier, but staying one is harder
- 🥧 Everyone’s fingers are in everyone’s pies
@geri_kirilova shares her thoughts on venture "enmeshment."
laconiacapitalgroup.com/blog…
#OpenLP
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Missed this month's amazing #OpenLP content from @bizcarson, @HeatherHartnett, @EndowmentLP, @will_bricker, @MTemkin, @CharmelMaynard, @nbt, @MKRocks + @KauffmanFellows?
Never fear! - You can see the August roundup here:
news.sapphireventures.com/au…
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2/ A mix of factors, including a surge in first-time funds, volatile valuations and a tough fundraising environment, are expected to decrease the success rates for managers seeking to raise a Fund II.
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Hey #VCs - It's (well past) time to get your parental leave policies in order. 👶👶👶
Thankfully @checkwarner, @megkaridis, and @clkung have published a guide to help you think through the process. 👇
#OpenLP
📢Today Diversity VC has published a Guide for VCs designing parental leave policies.
This would not have been possible without the brilliant @megkaridis and @clkung and a generous group of contributors across the industry 🙏
sifted.eu/articles/vc-parent…
diversity.vc/women-in-uk-vc/…
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Lots of chatter lately regarding the #QSBS exemption in Biden's tax plan and downstream effects on early-stage investing.
Here's the explainer you need to understand this extremely complex (yet important!) topic. Thanks @ChrisHarveyEsq!
lawofvc.substack.com/p/19-ep…
#OpenLP
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💯 New Capital Allocators ep out today! #VC vets @Beezer232, @cdouvos & Joelle Kayden joined host @tseides to share 🔥takes on the state of the industry: Re-up & new fund decisions, challenges for VCs & their portfolio cos, funding discipline across stages, dry powder, tourists exiting the game & valuations
capitalallocators.com/podcas…
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In last 5 years, avg # of LPs participating in a VC flagship fundraise more than ✨doubled✨.
But avg check size has grown too.
Key takeaway ➡️ More accredited investors + institutions are tapping into venture markets in a big way.
differentfunds.com/research/… by @DifferentFunds
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8/ GPs - We are hearing from LPs that they are expanding the breadth and depth of their investor analyses beyond traditional markers of success.
What are some key qualitative factors (strength of network, strategic vision, portfolio construction, etc.) emerging managers should be touting to instill conviction?
For a deeper dive into the challenges and projections for first-time VC managers, read the full PitchBook Analyst Note: pitchbook.com/news/reports/q…
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Want to get your foot in the venture door?
Check out this 6 month VC fellowship program at London Business School, with support from @localglobevc + @SVB_Financial. 🇬🇧
🎉 Applications are now open for the Newton Venture Program 🎉
🍎Our flagship VC fellowship will be based in person at London Business School over the following dates:
- 27-29th April
- 22-24th June
- 21-23rd September
Apply here 👉 tinyurl.com/2waesrce
#NVPxLBS
ALT Image reads Newton Venture Program. Disrupt the VC Ecosystem. ^ Month VC Fellowship. On Campus with London Business School, LocalGlobe VC and Silicon Valley Bank
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Coming 🔜 to your inboxes - The Nov. OpenLP newsletter, covering:
- Knowing when to sell
- Navigating economic cycles in VC
- Betting on deep tech
- Realistic return expectations for LPs + More...
Subscribe below.
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Ownership - every #VC's favorite topic nowadays.
Great new thread from @TheFullRatchet, making the case for the power/importance of ownership 👇
1/ I recently exchanged tweets w/ @elizabethYin, @macconwell, & others on the notorious topic of OWNERSHIP.
It came up again today on a Zoom chat w/ emerging GPs.
After many conversations (over many years) w/ Institutional LPs -- ownership does matter.
Here's why:
#OpenLP
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Adding to the burgeoning ranks of nontraditional venture investors? 🔥 Startup CEOs! 🔥
@berber_jin1 dives deep on the proliferation of "startup CEOs moonlighting as VC investors." Featuring commentary from @natewcl, @tmrohan, @joshuabrowder + more.
theinformation.com/articles/…
#OpenLP
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3/ In 2021, total capital committed to U.S. first-time fund managers totaled $14.7B across 318 funds. Over the past 2 years, those numbers hit a sharp decline, with 2023 finishing the year with only 97 first-time funds raised & less than ½ the capital of ‘21 at $6.5B. This aligns with overall VC fundraising efforts as ‘23 was the second consecutive year established managers (funds 4+) took more than 70% of total committed capital in the ecosystem.
ALT VC first-time fundraising activity
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Why might an LP turn a GP down? 🤔
Here are the top reasons according to one LP 👇
Fantastic thread from @SamEttelaie of @BritishBBank!
#OpenLP
1/ As it approaches my fifth year as an LP, with most of that time spent supporting first time & emerging fund managers via the ECF programme, I looked into the most common reasons why I didn’t progress with VC proposals 👇 #VentureCapital
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4/ 🚨Concerning trend alert: Over 247 of the 667 first-time managers (2019-2021) that closed funds might not secure a second fund. 2024 looks like it is shaping up to be a busy fundraising year with funds who planned to be back in ‘24 + those who didn’t want to raise in last year’s conditions.
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Missed this month's #OpenLP newsletter?
Take a peek here 👀
news.sapphireventures.com/op…
Topics include: Fund recycling, the metrics that matter most, the family office LP perspective and much, much more.
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“LPs who have figured out how to back emerging GPs are going to reap the rewards of this boom time in emerging managers. Folks who don’t figure it out are going to be sitting on the sidelines.” - @MoniqueWoodard of @cakeventures
podcasts.apple.com/us/podcas…
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1/ Recently
@oper8rio @SapphireVC and @accoladeprtnrs had a conversation regarding the due diligence process for emerging managers (EMs), mainly around what’s important in the due diligence (DD) process, as well as how LPs make investment decisions #openLP
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"In my eleven years in venture capital, I've never experienced a market that's moving as quickly as it is at present. And in conversations with fellow investors, it seems we all feel the same way." - @nbt of @footworkvc
nbt.substack.com/p/fast-fund…
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Family offices can be a different breed than other #LPs. And they tend to be more opaque than most.
Peek behind the family office curtain with the newest #ventureunlocked episode ft. Jamie Rhode of Verdis Investment Management + @SamirKaji.
ventureunlocked.substack.com…
#OpenLP
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File this one under: DO NOT MISS 🌟
The very first LP Roundtable on the #VentureUnlocked podcast is a *must listen* episode.
Featuring insights from @cdouvos, @guyperelmuter, and @Beezer232.
ventureunlocked.substack.com…
#OpenLP
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1/ Effective succession management is crucial for the long-term success of VCs.
@Vintage_Inv's @alanf_feld outlines 6 best practices for managing GP succession: techcrunch.com/2024/01/24/ho… 👇
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🔮Today's @FortuneMagazine Term Sheet shares the 2023 crystal ball according to top VCs, PE investors & tech founders - w/ LP insights courtesy of @SapphirePrtnrs' @Beezer232, @gen_partners' @asherkraut, @usealloy' @CharleyMa & @westloopv' Jeff Carter
fortune.com/2023/01/04/the-c…
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Missed the #OpenLP newsletter?
Take a peek at this month's fabulous content from @checkwarner, @semil, @dunkhippo33, @KauffmanFellows, @dteten, @paigefinnn, @tseides and more →
news.sapphireventures.com/op…
#OpenLP
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🚨New podcast alert 🚨
For anyone looking to better understand venture through the lens of LPs, "The Limited Partner" podcast, hosted by @eriktorenberg and @DWeisburd features influential LPs and investors who speak candidly about VC in 2023 and how #LPs are navigating the asset class today. Listen + subscribe 👇
🎧 Spotify: spoti.fi/3OB2vs2
🎧 Apple: apple.co/3Yh5sBg
#venturecapital #openlp
I’m excited to announce the launch of my new podcast The Limited Partner with @eriktorenberg examining Venture Capital through the lens of Limited Partners. This show is a part of the @TurpentineMedia network.
Our first podcast is with @cdouvos known as “The Super LP” and the co-founder of the #OpenLP ecosystem.
Spotify: tinyurl.com/yz4s2n2w
Youtube: tinyurl.com/ykatanp4
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Relevant article from @marcocsolinas here:
"VC Performance Metrics For Early Stage Funds Beyond Common Multiples"
bfp.vc/vc-performance-metric…
#OpenLP
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Why should there be ~ 20% - 30% loss ratio in early-stage funds during the first 5 - 6 yrs?
Tune into the newly launched @SuperclustersLP - The Emerging LP Podcast, hosted by @cupazhou, for key insights from @Beezer232 on loss ratios, portfolio construction, productive DPI, pitch deck criteria & more.
Listen & subscribe below. 👇
🎧Spotify: open.spotify.com/episode/6AJ…
🎧Apple Podcasts: podcasts.apple.com/us/podcas…
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🙏@gilbert @djrosent @rrhoover @vedikaja_in @chudson @fintechjunkie @DWeisburd @eriktorenberg @mikeeisenberg @Beezer232 @nchirls @HarryStebbings @LauraLPThompson @EvanTarzian @adaventures @johanbrenner @tactycHQ @nikhil @paidion @meliarobin @LeenaRao @vishalpersaud @thebenbergman @stokessamanthaj @maddierenbarger
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2/@TheLP_Pod— @DWeisburd interviews @lo_toney, Founding Managing Partner of @PlexoCapital, about how he raised LP capital from Google, the Ford Foundation, Mass Mutual, and other top LPs.
open.spotify.com/episode/0Ko…
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🆕 The latest episode of the Origins Podcast just dropped, featuring @MelissaEFLucas, the CIO for the investment vehicles of two extended families. Check it out to learn what LPs are thinking in today’s market 👇
- What areas of venture are piquing Missy’s interest
- What it means to have a macro view
- The biggest mistake an investor can make
- Navigating when to invest in hype cycles
🎧 Spotify: spoti.fi/3Q1qEJu
🎧 Apple Podcasts: bit.ly/3K2Whi5
Hosted by @SapphirePrtnrs' Partner @Beezer232 & @notationcapital' @nchirls 🎙️👏
#LP #VC #venturecapital #openlp #fundraising #investing
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