20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT
Ryan Akkina, a member of the MIT Global Investment Team, shares insights from his journey in fund investing. He discusses the rigorous manager evaluation process at MIT, emphasizing the importance of relationships and track records. Ryan reveals how MIT constructs its diverse portfolio and the three check sizes they leverage. The conversation also dives into MIT's direct investing strategy and lessons learned from past mistakes, highlighting the complexities of making investment decisions in today's competitive landscape.
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volunteer_activism ADVICE
Emerging Manager Timing
Invest in emerging managers during down cycles.
Less competition and better valuations exist during these times.
insights INSIGHT
Manager Evaluation Framework
Evaluate venture fund managers by assessing their ability to see, pick, win, and service deals.
Focus on winning and servicing aspects, as deal flow and picking are more common skills.
question_answer ANECDOTE
Sequoia's Diverse Appeal
Sequoia's success stemmed from having partners with diverse appeal to entrepreneurs.
This broad appeal allowed them to cover a wider range of founders and investment opportunities.
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Ryan Akkina is a member of the Global Investment Team at the MIT Investment Management Company (MITIMCo), which is responsible for managing MIT's endowment and pension plans. Ryan has invested in the likes of Sequoia, Kleiner Perkins, a16z, Greenoaks and Initialized to name a few. Ryan also leads many of MITIMCo's direct co-investments including most notably into Coupang and Rippling. Prior to joining MITIMCo, Ryan was a consultant at McKinsey & Company.
In Today's Episode with Ryan Akkina We Discuss:
1. From Engineer to LP with MIT:
How did Ryan make his way into the world of fund investing as an LP with MIT?
Why did he turn down the chance to be a VC early in his career?
What does Ryan know now that he wishes he had known when he started at MIT?
2. The Manager Evaluation Process for MIT:
What does Ryan look for most when investing in new managers?
How important is track record when evaluating a new manager?
What is the biggest mistake Ryan has made in picking a manager? What did he not see that he wish he had seen? How did that change his process?
3. How MIT Builds Their Portfolio:
How does MIT construct their portfolio from private to public to everything in between?
What are the three different types of check sizes that MIT writes when investing in new managers?
What are the most common reasons why MIT will not re-up with a manager?
What are the single biggest reasons why great managers turn bad?
4. MIT: The Direct Investor:
Why does MIT see so much opportunity in direct investing?
How does MIT approach the direct investing process? How do they approach underwriting themselves vs working with their managers in the process?
How do MIT think about the right number of direct deals to make up their portfolio?
How do they approach check sizing on a per-company direct investment?
What has been Ryan's biggest direct investing mistake? How did that change his approach and mindset?
5. LP Markets Today and Where We Go From Here:
Are LPs open for business today? What type of firms will not struggle? Which will?
How does Ryan view liquidity windows today? When will M&A and IPO markets open?
What would Ryan most like to change about the world of LPs?
Why does Ryan believe the LP incentive structure in terms of compensation is broken?
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch