The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective
Oct 14, 2024
David Frankel, Co-founder and Managing Partner of Founder Collective, shares insights from his impressive venture capital career, having backed giants like Uber and Coupang. He discusses why pro-rata rights may hurt founders and why Limited Partners are frustrated with VCs today. David dives into the evolving dynamics of seed funding, emphasizing the importance of adapting investment strategies in a shifting landscape. He reflects on the emotional challenges of guiding struggling startups and highlights the critical role of understanding entrepreneurs' characters in successful investments.
01:27:20
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Quick takeaways
- Managing reserves in venture capital is increasingly complex, requiring a delicate balance between supporting existing investments and pursuing new opportunities.
- Investors should focus on non-consensus opportunities and diverse founders, emphasizing unique ideas over trends in the current competitive seed funding landscape.
Deep dives
Challenges of Venture Capital Reserves
Managing reserves in venture capital is increasingly complex, particularly with the current landscape of seed funding. Many firms struggle to determine the right level of reserves to maintain, balancing the need to support existing portfolio companies while also exploring new investments. The conversation reveals a shift in mindset where having reserves may now feel more essential than in the past, yet the execution remains difficult. The danger lies in over-allocating to failing companies, which may prevent funding to those with higher potential.
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