The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch

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

Jan 29, 2024

Ryan Akkina, member of the Global Investment Team at MIT, shares insights on how MIT selects venture managers to invest in and the three categories of checks MIT writes into funds. He discusses MIT's approach to building their venture fund portfolio and their strategy for direct investing. Ryan also talks about the challenges of being an LP in today's investment landscape.

57:02

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Episode guests

Ryan Akkina

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Episode notes

Podcast summary created with Snipd AI

Quick takeaways

MITIMCo employs different check sizes for investments based on the manager's track record and startup stage.

Building strong relationships with founders and providing excellent service are essential for winning allocation in competitive deals.

Maintaining discipline in deployment timelines is a crucial challenge for venture capital managers.

Deep dives

Investment Strategies and Check Sizes

In the podcast episode, the guest discusses the investment strategies and check sizes employed by venture capital firms. They mention having core relationships with six to eight firms that receive investments of 50 to 150 million per fund. They also have a second bucket for less mature managers with check sizes of 10 to 20 million per fund. Additionally, there is a third bucket for extremely early-stage investments, where they may write a million dollar check. The size of the investment depends on factors such as the manager's track record and the stage of the startup.

Introduction

4min

Venture Capital Journey and Investing Landscape

17min

Managing Strategy Shifts and Position Sizing in Venture Capital

17min

Direct Investing Mistake: Oil and Gas Investment

11min

Challenges of Generational Transitions in Venture Capital Firms

2min

Changing Perspectives on Heart Tech Investing and the Cyclical Nature of Investments

2min

Insights on LPs, AGMs, Investment Advice, and the Challenges of the Job

2min

Personal Plans for the Future, Gratitude, and Sponsor Ads

3min

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?

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The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch

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

Episode guests