Jeff Morris Jr, Chapter One | Difficult Market for VCs
Sourcery
Navigating Incentives in Venture Fund Mergers
This chapter examines the intricacies of merging venture capital funds, highlighting the management of incentives among solo general partners and larger platforms. It also analyzes partnership structures, the risks involved in carry loss, and the importance of limited partner support in a competitive funding landscape.
Molly talks to Jeff Morris Jr (JMJ), GP of Chapter One and infamous product leader at Tinder. As emerging funds face an existential crisis, JMJ explores the stark realities of an industry in flux. From the looming specter of industry consolidation & shutdowns, to the relentless pressure to prove relevance, JMJ challenges conventional wisdom about what it takes to succeed in modern VC.
JMJ offers a candid look at the struggles and strategies of today's fund managers, painting a picture of an ecosystem where only the most adaptable will survive. He talks about the delicate balance between chasing deals and building a sustainable franchise, all while navigating a landscape where past glory holds diminishing returns.
This conversation isn't just about the state of VC – it's a glimpse into the future of innovation financing. As traditional models are upended and new players emerge, JMJ's insights offer a roadmap for those daring enough to reimagine the role of venture capital in shaping tomorrow's tech giants.
The discussion also touches on the solo GP experience, product development, and the significance of location in building a venture career (AKA why LA is the best city).
JMJ was a former VP of Product Revenue and an early employee at Tinder and is a seed investor in 13 unicorns, including Mercury, Superbase, and Compound Finance. Chapter One is a product-driven early-stage venture fund based in LA backed by notable institutions including Cendana Capital, Sequoia, Kleiner Perkins, and Marc Andreessen.
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Companies mentioned:
Tinder: https://tinder.com/
Snap: https://www.snap.com/
SpaceX: https://www.spacex.com/
Anduril: https://www.anduril.com/
Mercury: https://mercury.com/
Superbase: https://superbase.com/
Compound Finance: https://compound.finance/
Captions AI: https://www.captions.ai/
Lux Capital: https://www.luxcapital.com/
Equal Ventures: https://www.equal.vc/
Sapphire Ventures: https://sapphireventures.com/
Allocate: https://allocate.co/
Bessemer Venture Partners: https://www.bvp.com/
Andreessen Horowitz: https://a16z.com/
Index Ventures: https://www.indexventures.com/
Variant: https://variant.fund/
Kleiner Perkins: https://www.kleinerperkins.com/
Social Capital: https://www.socialcapital.com/
Bonfire Ventures: https://www.bonfirevc.com/
General Catalyst: https://www.generalcapital.com/
Lafamilia: https://www.lafamilia.vc/
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TIMESTAMPS:
(00:00) Intro and Preview
(00:40) VCs in LA: The Quiet Majority
(02:02) The Tweet: Emerging Fund Consolidation
(02:34) Venture Capital Shakeup: Uncertainty and Options
(05:14) Conversations with Beezer: Institutional Backing
(08:32) Current Conditions for Emerging Managers
(13:42) Recent Consolidation Examples
(14:50) Sponsor: Archer
(15:33) Consolidation Challenges: Timing and Culture
(17:47) Structuring and Incentive Alignment in Consolidation
(20:43) Venture Capital Landscape: Numbers and Consolidation
(25:08) Venture Fund Consolidation: Future Projections
(31:02) The Battle of the Brands: Attracting Talent and Founders
(35:06) The Solo GP Life: A Reality Check
(42:20) Chapter One's Future Product Plans
(50:46) LA vs. The Bay: A Perspective on Ecosystem Differences
(53:21) Embracing the Ecosystem Debates
(53:26) Wrap
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