E86: Inside Mischief VC's Evolution with Zach Perret and Lauren Farleigh
Apr 22, 2025
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Zach Perret, Co-founder and CEO of Plaid, and Lauren Farleigh, Founder of Dote Shopping and Partner at Mischief VC, share insights from their entrepreneurial journeys. They discuss how their founder experiences shape Mischief VC's unique investment strategies. The duo emphasizes the importance of founder mentorship and their commitment to early-stage investments. Zach highlights the challenges of fundraising and the transition from startup founders to venture capitalists, while Lauren offers practical tips on team recruitment and building strong founder relationships.
Mischief VC, co-founded by seasoned entrepreneurs Lauren Farleigh and Zach Perret, leverages their unique founder experiences to enhance support for early-stage startups.
The firm transitioned from a $30 million fund to an $80 million fund, evolving their investment strategy to lead rounds and strengthen relationships with entrepreneurs.
Mischief VC prioritizes a founder-centric approach, providing value-added services in recruiting and strategic growth to foster long-term success for portfolio companies.
Deep dives
Founders at the Core of Mischief VC
Mischief VC was co-founded by Lauren Farley and Zach Paré, both of whom bring significant founder experience to the venture capital space. Their backgrounds as founders—Zach as the CEO of Plaid and Lauren as the founder of Dote Shopping—shaped their approach to venture investing. The duo recognized the value of having seasoned founders on the cap table during their entrepreneurial journeys and sought to replicate that experience by building a VC firm focused on supporting early-stage founders. This founder-centric ethos emphasizes the importance of mentorship and guidance in navigating the challenging startup landscape.
Investment Strategy and Focus Areas
Mischief VC adopts a generalist investment framework primarily focusing on software-based companies at the pre-seed and seed stages. Instead of being driven solely by specific sectors, their strategy is rooted in a founder-driven approach, investing in compelling talent and ideas across various domains. The firm generally invests in rounds with check sizes ranging from $1 to $4 million, leveraging their background as founders to empathize with the challenges faced by entrepreneurs. This unique perspective allows them to build deeper relationships with founders and provide thoughtful support throughout their journey.
Sourcing Deals Through Relationships
Mischief VC employs a highly network-focused model to source deals, relying on the extensive relationships cultivated by its partners over their years in Silicon Valley. The firm prioritizes collaboration and referrals, often hosting intimate dinners to connect with promising entrepreneurs and create a robust sourcing funnel. Additionally, staying engaged with previous portfolio companies helps to identify and support emerging founders, keeping the firm's deal pipeline well-informed and active. This people-driven methodology fosters a sense of community and trust within the entrepreneurial ecosystem.
Transition from Fund One to Fund Two
The transition from Fund One to Fund Two marked a significant evolution for Mischief VC as they scaled from a $30 million fund to an $80 million fund. While Fund One focused on making smaller investment checks, the transition necessitated a strategic shift towards leading investment rounds, allowing the firm to deepen their involvement with entrepreneurs. This move was driven by their desire to create impactful relationships and maintain high-quality deal flow without sacrificing their investment efficacy. They recognized the need to refine their deal-making processes while capturing their initial success and ensuring continued growth in their investment strategy.
Building a Supportive Ecosystem for Founders
Mischief VC emphasizes creating a supportive ecosystem for portfolio companies by offering value-add services in areas like recruiting and strategic growth. They acknowledge that many founders experience uncertainty in hiring and operational decisions, and thus focus on providing structured resources and training to help guide them. The firm actively seeks feedback from founders to understand their needs, allowing them to construct targeted support tools and knowledge-sharing practices. This hands-on approach reflects their commitment to not just providing capital but also fostering the long-term success of their portfolio companies.
In this episode of Turpentine VC, Erik Torenberg interviews Lauren Farleigh and Zach Perret from Mischief VC, discussing their experiences as founders and how they leveraged those to build their venture firm.
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Lauren Farleigh and Zach Perret from Mischief VC leverage their founder experiences (Zach is CEO of Plaid, Lauren founded Dote Shopping) to build a differentiated VC firm.
Mischief started with a $30M fund one and grew to an $80M fund two, focusing on early-stage investments.
Both started angel investing in 2017 and saw a market opportunity to institutionalize their approach based on founder-to-founder support.
They identified a gap: few VCs have true zero-to-one, finding product-market fit experience.
Zach shares how early angel investors who were former founders helped Plaid at critical moments, inspiring Mischief's model.
They're a generalist fund investing in software companies, more founder-driven than thesis-driven, with $1-4M checks.
Their approach is hyper people-driven: they follow the best people in their network rather than doing outbound sourcing.
They host structured dinners with 10-12 people, asking attendees to recommend others, effectively building their network.
Send quarterly updates to portfolio companies like a monthly company update, keeping founders engaged.
Transitioned from participating to leading rounds after a portfolio founder wished they had led his successful round.
They track potential founders before they start companies, building long-term relationships.
Play a "ground game" focused on delivering results rather than being loud on social media.
Fund two fundraising was harder than fund one due to market conditions and larger size.
Zach is part-time at Mischief while running Plaid, focusing on sourcing and unique situations where he has relevant experience.
Having four GPs provides the right level of availability while allowing each to focus on their strengths.
Fund two has primarily first check focus with aggressive recycling, avoiding follow-ons that dilute returns.
Currently feel capital constrained with four GPs on $80M, planning careful growth while maintaining responsible investment practices.
Focus on building training modules for common founder challenges like recruiting and sales, not on firm marketing.
Most founders struggle with fear/indecision in cold sourcing rather than making mistakes; Zach advocates direct outreach.
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