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Semil Shah is the Founder of Haystack, an institutional venture capital firm that backs outlier founders at the earliest stages. Semil started Haystack in 2013, and has since invested in X unicorns like DoorDash, Instacart, Figma, HashiCorp, Ironclad, Carta, Applied Intuition, and Opendoor.

This episode takes us behind the scenes of Semil’s two decade journey building Haystack from scratch. We’ll dive into how he raised and deployed each of the first six Haystack funds, including all the mistakes made along the way, plus the details around Haystack’s new $75 million and $25 million funds announced the date this episode was published.

Read Haystack's announcement here: https://semilshah.com/2023/09/10/announcing-haystack-vii-same-model-fresh-funds-and-new-era/

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Listen to my conversation with Immad, the Co-founder and CEO of Mercury:

• Spotify: https://open.spotify.com/episode/24ujuXZ2uws48bvwOh9NcR
• Apple: https://podcasts.apple.com/us/podcast/lessons-from-building-mercury-with-immad-akhund-co/id1694440669?i=1000619360042

Disclaimer: Mercury is a financial technology company, not a bank. Banking services are provided by Choice Financial Group and Evolve Bank & Trust; Members FDIC.

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Topics discussed include:

• Juggling multiple jobs while living paycheck to paycheck his first eight years in Silicon Valley
• Failing to get his first job in venture three times
• Investing in the Seed rounds of unicorns DoorDash, Instacart, Hashicorp, and Envoy within the first six months of starting Haystack
• Why he initially thought Haystack would be a short-term thing
• Turning down multiple lucrative job offers two years in
• How the best LPs evaluate VC funds on the “Entry Ownership to Fund Size” ratio
• Semil’s strategy of “crawl, walk, run” to increase Haystack’s check sizes over time
• The pain he felt failing to hit his target fund size on the first four fundraises and how he handled it
• Why everyone should “pre-market” a fundraise, and how to do it
• The things most founders don’t appreciate about raising a venture fund
• Fighting to invest in Ironclad’s Seed round before he had his next fund raised
• How LPs reference VCs, and how a VC can become referenceable
• Why Haystack Fund IV was the scariest fund to raise
• How Semil builds relationships with LPs
• The hardest questions he faced raising each fund and what other VCs should anticipate while raising their own fund
• How LP investment committees make decisions
• What’s going on behind the scenes at most large venture LPs today
• Why the traditional advice of “finding an anchor LP” makes no sense
• Spilling his secret on the best quarter to fundraise
• Why VCs should fundraise with a hard cap on fund size
• Why every VC should appreciate and remember how LPs supported them through the pandemic
• All the details on Haystack’s new $75 million and $25 million funds
• Semil’s plan for the next 10 years
• Three pieces of advice for emerging fund managers

Where to find Semil:

• Twitter: https://twitter.com/semil
• LinkedIn: https://www.linkedin.com/in/semilshah/

Where to find Turner:

• Newsletter: https://www.thespl.it
• Twitter: https://twitter.com/TurnerNovak

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