Origins - Inside Venture Capital, Hosted by a GP and an LP

Franchise Funds: Is Being a VC Franchise the Ultimate Goal with Thomas Kristensen

Mar 11, 2025

Thomas Kristensen, a seasoned partner at LGT Capital Partners, shares his insights on the venture capital landscape with Bezer Clarkson. They challenge the notion of 'franchise funds' and discuss how GPs must continuously innovate instead of resting on past successes. The duo dives into what genuinely constitutes a successful fund and the importance of recognizing performance metrics. Additionally, they speculate on the evolving expectations for IPOs and the reasons why many founders shy away from becoming public company CEOs.

42:50

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Episode guests

Thomas Kristensen

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Episode notes

Podcast summary created with Snipd AI

Quick takeaways

The podcast emphasizes that the term 'franchise fund' can be misleading, as true success in venture capital involves more than past performance.

Building robust relationships between GPs and LPs is crucial for fostering trust and effective communication, which can guide better investment decisions.

Deep dives

Understanding Franchise Funds

The concept of a franchise fund is explored, highlighting its definition and criteria for recognition. A franchise fund is often understood to be at the peak of its performance and reputation within the venture capital industry. The discussion reveals differing perspectives on what constitutes a franchise fund, emphasizing that many LPs may have varying opinions on this classification despite working in the same field. This distinction is crucial as it underscores the nuanced nature of evaluating and categorizing venture funds, indicating that success is not solely defined by past performance.

Intro

2min

Navigating Franchise Funds in Venture Capital

8min

Transparency and Trust in Venture Capital

8min

Assessing Success: The Path to Venture Fund Credibility

2min

The Evolving Landscape of Venture Capital

20min

Evolving Expectations in Venture Capital Exits

3min

Thomas Kristensen, Partner at LGT Capital Partners, has decades of experience backing the top players in venture, but as an LP, doesn’t love the term "franchise fund.” He sits down with Bezer Clarkson, Partner at Sapphire Partners, to discuss why GPs can’t rest on their laurels, that being a franchise shouldn’t be every VC’s ultimate goal, and how LPs can dig deep to find firms with a great founder product– and avoid ones that may look like franchises but could have already peaked. The two also share their predictions for 2025 exits and why they think a lot of founders don’t want to be public company CEOs.

Learn more about Sapphire Partners: sapphireventures.com/sapphire-partners

Learn more about OpenLP: openlp.vc

Learn more about Asylum Ventures: asylum.vc

Learn more about LGT Capital Partners: lgtcp.com

For a monthly roundup of the latest venture insights, including the newest Origins episodes, subscribe to the OpenLP newsletter – delivered straight to your inbox: subscribe.openlp.vc

CHAPTERS:

(0:00) Welcome to Origins

(2:00) Are Franchise Funds Really Franchises?

(7:49) What Counts As Performance?

(12:03) How GPs Create (And Spend) Goodwill

(15:45) A Consistent Founder Product

(19:35) “There’s Plenty of Good Firms Out There That I Wouldn’t Necessarily Call Franchise Firms.”

(27:08) Franchise Funds and Succession

(35:43) Resting On Your Laurels

(39:17) “A More Critical Year In Venture Than We Want It to Be.”

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