Portfolio construction trends and best practices with CEO Anubhav Srivastava of Tactyc
Venture Unlocked: The playbook for venture capital managers
The Challenges of Seed Stage Emerging Managers
Seed stage emerging managers often struggle to get a fund to 100% invested into companies, maybe even higher. LPA usually has a provision that says, you know, we can invest up to 125% of the funds, which is a 25% recycling provision. There's two types of recycling: exit recycling and then there's management fee recycling.
Follow me @samirkaji for my thoughts on the venture market, with a focus on the continued evolution of the VC landscape.
I started Venture Unlocked to bring more transparency to firm building by bringing on guests whose unique insights and experts could help venture fund managers, limited partners, and founders with their journeys. This week, we have a special guest in Anubhav Srivastava, Founder and CEO of Tactyc, who saw the pain point managers were having in portfolio construction. Prior to Tactyc, managers often used excel spreadsheets and other methods for forecasting models. Tactyc is a dynamic software dashboard that makes ongoing portfolio modeling easy.
Anyone who has listened to this show knows that portfolio construction is one of my favorite things to talk about, and Anubhav provided his data-driven insights on what he’s seeing on how emerging managers are modeling portfolios around number of companies, reserves, recycling, and follow-ons.
Here is a completed dashboard that shows the Tactyc platform in action. You can also schedule a 1-on-1 demo with Anubhav, Tactyc's founder directly here.
We hope you enjoy my conversation with Anubhav.
A word from our sponsor:
Privately owned and headquartered in New York City, Grasshopper Bank is built to serve the business and innovation economy. As a client-first digital bank, Grasshopper combines the best of banking technology and years of industry expertise to deliver best-in-class experiences with trusted security and unparalleled support. Grasshopper's digital solutions are tailored for venture capital and private equity firms, startups and small businesses, fintech-focused Banking-as-a-Service (BaaS) and commercial API banking platforms, and more.
Serving clients globally, Grasshopper provides flexible, firm-focused lending solutions, as well as a dedicated Relationship Manager committed to meeting the unique needs and strategic focus of your firm across all entities, including funds, general partner and management companies. Grasshopper is a member of the FDIC and an Equal Housing Lender.
For more information, visit the bank's website at www.grasshopper.bank or follow on LinkedIn and Twitter.
About Anubhav Srivastava:Anubhav Srivastava is the Founder and CEO of Tactyc. He is a former bulge-bracket investment banker with extensive experience in M&A and financing transactions. Having spent more time than is healthy with Excel models, the idea for Tactyc was born out of his observations of how he saw people using (and misusing) Excel-based models.
Prior to Tactyc, Anubhav was a Vice President at Evolution Media Capital and started his investment banking career at Deutsche Bank.
Anubhav has an MBA in Finance from the Wharton School of Business and a B.S. in Electrical Engineering from Georgia Institute of Technology.
In this episode we discuss:(02:26) Why Anubhav started Tactyc and what it does(05:10) The reason why using Excel becomes a pain point over time(08:10) How deeper portfolio analysis can give LPs peace of mind(10:55) Who has been more successful in raising over the last year(14:09) Trends of portfolio models in terms of initial valuation at the pre-seed, seed level today versus 2021(16:04) Changes in check sizes and dilution in recent months(18:04) How reserves and follow-ons have changed(19:36) The most important metric for a sub-$50 million fund(21:32) Portfolio strategies for nano-funds(23:32) How successful managers take emotions out of the equation in follow-on investments(26:46) What managers are seeing with follow-on MOIC hurdles(28:59) Why some managers are over-reporting to LPs to navigate this downturn(31:22) The biggest mistakes managers make in portfolio construction reporting(34:57) Understanding the difference between a management fee recycling and exit proceed recycling(36:53) Example of management fee recycling(39:08) What success for Tactyc looks like over the next 5-10 years
I’d love to know what you took away from this conversation with Anubhav. Follow me @SamirKaji and give me your insights and questions with the hashtag #ventureunlocked. If you’d like to be considered as a guest or have someone you’d like to hear from (GP or LP), drop me a direct message on Twitter.
Podcast Production support provided by Agent Bee
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit ventureunlocked.substack.com
Remember Everything You Learn from Podcasts
