How I Invest with David Weisburd
E123: Should LPs invest in Venture Capital? w/Gregor von dem Knesebeck
Dec 24, 2024
Gregor von dem Knesebeck, Co-founder and Managing Partner of Blue Future Partners, shares insights into building a successful fund-of-funds that specializes in venture capital. He discusses the importance of brand building and establishing effective LP relationships. Topics include ideal allocation strategies for family offices, including a striking contrast between European and U.S. markets. Gregor also explains the power law of returns in venture investing, emphasizing how a few key investments can drive overall success.
20:47
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Quick takeaways
- Successful venture capital allocation for family offices relies on a structured approach through fund-of-funds, direct investments, and understanding venture dynamics.
- Building a strong brand presence is critical for new venture firms, as it attracts investments and establishes credibility in a competitive landscape.
Deep dives
Three Pillars of Venture Asset Allocation
When allocating venture capital, family offices benefit from a structured approach based on three main pillars: fund of funds, direct funds, and investment in specific startups. Many family offices start with fund of funds to ease into the venture space, gradually progressing to direct investments as they gain experience and confidence. However, starting with direct investments often leads to considerable mistakes due to a lack of understanding of vintage diversification and other key strategies. It is crucial for family offices to recognize the differences between venture capital and other asset classes, such as private equity, where the power law dynamics significantly influence outcomes.
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