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

20VC: Turning a $15M Investment in Monday into $1.5BN in Cash | The Strategy Behind a 37x DPI $45M Fund | The Three Step Process to Selling Positions that has Netted Top Percentile Returns with Avi Eyal, Co-Founder @ Entrée Capital

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Jul 3, 2024

Avi Eyal, Co-founder and Managing Partner of Entrée Capital, discusses his impressive $15M investment in Monday, which returned $1.5BN. He debunks common VC myths, arguing that not every deal needs to be a homerun. Avi shares insights on what makes exceptional founders and the balance between skill and luck in entrepreneurial success. He also highlights crucial investment strategies, emphasizing the importance of mentorship and learning from mistakes, while reflecting on personal growth in the chaotic landscape of venture capital.

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ANECDOTE

Early Independence

Avi Eyal developed independence early after moving to South Africa at age five, forcing him to adapt quickly.
This experience shaped his work ethic and focus on achieving results, evident in his venture capital career.

INSIGHT

Entree Capital's 4 T's Framework

Entree Capital uses the “four T’s” framework: technology, team, timing, and TAM.
Team and timing are prioritized, followed by technology and TAM, for evaluating investment opportunities.

ANECDOTE

Market Expertise

Avi Eyal prefers founders with market expertise, citing examples like Roy Mann, Ido Gal, and TJ Parker.
These founders' deep industry knowledge contributed to the success of monday.com, Riskified, and PillPack.

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Avi Eyal is Co-Founder and Managing Partner of Entrée Capital, an early-stage VC fund with a portfolio including the likes of Monday.com, Stripe, Coupang, PillPack, and Snap. From their $15M investment into Monday, Entrée distributed a whopping $1.5BN, one of their $45M funds is a whopping 37x DPI. Avi is one of the greatest venture investors you might not have heard about.

In Today's Episode with Avi Eyal We Discuss:

1. The Biggest BS "Rules" in Venture Capital:

Why does Avi believe that it is BS for every deal to need to be a homerun and return the fund?
Why does Avi believe that signalling is real and it is BS to suggest otherwise?
Why does Avi believe that it is BS that ownership is crucial to make mega venture returns?
Why does Avi believe that you do not have to win every deal to be one of the best in venture?
Why should venture investors not manage the positions of their companies when they go public? Why is it BS to think they have asymmetric information when the company goes public?

2. What Makes the Best Founders:

Does Avi prefer first or second time entrepreneurs? Why?
Would Avi rather back a founder that is an expert in a market or one that is new to a market and has the naivety to not know what is hard?
Are the best CEOs the best fundraisers?
How does Avi rank the following when investing; team, market, traction and technology?
When Avi has misread a founder, what was it that he missed?

3. The Biggest Hits and Biggest Misses:

Monday: How did Entrée build such a large position in Monday over time? How did a Series A lead dropping out leading to a $1.5BN gain for Entree?
Stripe: Entrée has now 50% of his Stripe position. Why? What is the three step process for Avi in selling positions? How does he know when to and what is the right amount?
PillPack: Entrée made $15M from PillPack's exit. What did that teach Avi about ownership?
Cazoo: How was Entrée the only one to make money from Cazoo? How did Entrée's sell strategy help him make millions when everyone else did not sell?