In this episode, I speak with Tyler Sosin, founder of Villain Capital, a new fund focused on investing in vertical software businesses. Having grown up in the venture business for 17 years with storied firms Menlo Ventures and Accel Partners, Tyler brings a unique - and perhaps contrarian - perspective to venture investing. With Villain, Tyler's ambition is to help vertical focused founders efficiently scale their start-ups into dominant franchises that can compound their growth and relative market share over decades. The name of the firm, Villain, was inspired by a quote by Harvey Dent, a character in the Batman film The Dark Knight, who said to Batman, “You either die a hero or see yourself live long enough to become a villain.”
Highlights:
- The power of vertical software and markets that start small but grow big
- Characteristics Tyler looks for in early-stage founders
- Misconceptions around TAM and the overlooked upside in niche markets
- Why customer lock-in and annuity-like business models matter
- Thoughts on growth at all costs vs. compounding sensibly
- Lessons from past investments like Flywire, Carta, and Indio
- What venture gets wrong about market sizing and competition
- How Villain balances elements of both VC and growth equity
- The underestimated strength of founders who’ve been burned before
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Guest Bio:
Tyler Sosin is the founding partner at Villain Capital and a board partner at Menlo Ventures. Tyler has a degree in International Relations from Stanford University and lives in New York City.
Our Podcast now receives more than 300,000 downloads a month. Are you interested in sponsoring an episode? Please email David Weisburd at david@weisburdcapital.com.
#VentureCapital #VC #Startups #OpenLP #assetmanagement
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Stay Connected:
X / Twitter:
David Weisburd: @dweisburd
LinkedIn:
David Weisburd: https://www.linkedin.com/in/dweisburd/
Tyler Sosin: https://www.linkedin.com/in/tylersosin/
Links:
Menlo Ventures: https://menlovc.com/team/tyler-sosin/
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Questions or topics you want us to discuss on How I Invest? Email us at david@weisburdcapital.com.
(0:00) Episode preview
(1:37) Peter Thiel's perspective and the role of market power
(5:12) Identifying potential villain companies in early stages
(8:26) Successful strategies in product bundling and market control
(12:44) Venture capital approach to small markets
(19:11) Balancing growth and sustainability in startups
(24:56) Historical impact and profitability of tech giants
(27:37) The importance of collaborative thinking and networking in VC
(31:03) Herd behavior and innovation in fund management
(34:53) Vertical software companies: PE and growth equity interest
(37:23) Debunking market size myths in startup success
(42:36) Storytelling and scaling in startup growth
(44:15) Strategies for expanding market reach in growth companies
(48:56) Career advice from Tyler Sosin's perspective
(51:00) The Thiel fellowship's influence on young entrepreneurs
(51:40) Closing remarks
