Venture Unlocked: The playbook for venture capital managers

Special LP roundtable: What are LPs thinking about in Venture with Beezer Clarkson, Guy Perelmuter and Chris Douvos

Oct 25, 2023

Experienced institutional venture LPs Beezer Clarkson, Guy Perelmuter, and Chris Douvos discuss the impact of the economic downturn on emerging managers, the challenges faced by emerging managers in attracting institutional capital, the importance of including emerging managers in investment portfolios, investing in 'grownups' and the importance of repeatability, LP perspectives and decision-making challenges, establishing metrics and exit strategies in venture capital portfolios, letting winners ride vs taking chips off the table, and understanding venture capital as a fiduciary.

50:24

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Episode guests

Guy Perelmuter

Chris Douvos

Beezer Clarkson

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Episode notes

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Quick takeaways

Having previous fiduciary experience and understanding the responsibility of managing other people's money are crucial for emerging managers navigating the fundraising market.

The low survival rate for emerging managers highlights the challenges in attracting institutional capital, necessitating a solid understanding of the venture ecosystem and experience in managing other people's money and building companies.

A clear strategy for managing winners and taking chips off the table, along with a formulaic approach to decision-making and regular portfolio re-underwriting, are essential for evaluating a manager's track record and past performance.

Deep dives

Understanding the Changing Venture Market

The podcast episode explores the impact of the downturn on emerging managers and offers insights on navigating the fundraising market. The discussion highlights the importance of having previous fiduciary experience and understanding the responsibility of managing other people's money. The episode emphasizes the need for managers to have a repeatable investment process and to be mindful of factors like DPI and liquidity events. It also emphasizes the significance of sustainable competitive advantages and alignment of interests between GPs and LPs for long-term success.

Introduction

2min

The Current State of Venture Capital

12min

Including Emerging Managers in Investment Portfolios

8min

Views on First-Time Funds, Investing in 'Grownups', and the Importance of Repeatability

3min

LP Perspectives and Decision-Making Challenges

11min

Establishing Metrics and Exit Strategies in Venture Capital Portfolios

2min

Letting Winners Ride vs Taking Chips off the Table

6min

Understanding Venture Capital as a Fiduciary

5min

Follow me @samirkaji for my thoughts on the venture market, with a focus on the continued evolution of the VC landscape.

We're thrilled to bring back three experienced institutional venture LPs with Chris Douvos of Ahoy Capital, Beezer Clarkson of Sapphire Partners, and Guy Perelmuter of GRIDS Capital.

When we last convened, it was almost exactly two years ago in October of 2021. We had an inkling of the changes to the market on the horizon, but what a two years it has been.

Given the dramatic shift in the market, we had a lot to cover, and we spoke about the impact of the downturn on emerging managers, what managers can do to navigate this market, and the role of secondaries.

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About Beezer Clarkson:Beezer Clarkson is Managing Director of Sapphire Partners, the LP arm of Sapphire Ventures. She began her career in financial services over 20 years ago at Morgan Stanley in its global infrastructure group. Since, she has held various direct and indirect venture investment roles, as well as operational roles in software business development at Hewlett Packard. Prior to joining Sapphire in 2012, Beezer managed the day-to-day operations of the Draper Fisher Jurvetson Global Network.

Additionally, she is a judge for 100&Change, a MacArthur Foundation competition that provides funding to solve critical challenges of our time. In 2014, she was named to the Forty Over 40 list of women to watch.

About Chris Douvos:Chris Douvos is the Founder of Ahoy Capital, a boutique Fund of Funds that focuses primarily on allocating into early-stage venture capital funds, while selectively co-investing directly into companies.

Chris started his career at Morgan Stanley while still at Yale earning his MBA. From there he worked at Princeton University’s endowment fund where he got his start in venture before moving on to The Investment Fund for Foundations (TIFF). At TIFF he decided that the right strategy was to make “heroic investments” and invest in very early-stage, and often unproven managers.

About Guy Perelmuter:Guy Perelmuter is the Co-Founder and CEO of GRIDS Capital. Guy began his career in Banking as Chief Risk Officer at Banco Pactual (acquired by UBS), one of the largest banks in Latin America. He went to Vinci Partners, an investing platform for alternative investments in 2009 as Chief Risk Officer. He and his partner, Isabelle, Co-Founded GRIDS Capital in 2016.

He received a BS in Computer Engineering and an MS in AI from Pontifícia Universidade Católica do Rio de Janeiro.

In this episode, we discuss:

(02:51) Venture is _______(06:46) Outlook for emerging managers(09:42) Why it’s so difficult to raise a fund two right now(13:01) Is new money and funders in venture a net positive(16:16) Why emerging managers are still important for LPs(21:46) What they look for in a fund one investment(22:48) The decision to stop investing in grownups and look to emerging managers(25:24) How GPs get mentored and how information flows to them(27:23) Peer pressure amongst GPs to grow their fund size(31:53) How managers are recalibrating their funds to the current market(35:12) The role of secondaries(39:49) Why Venture is an unsophisticated asset class(44:29) How do you get institutional investors

I’d love to know what you took away from this conversation with Guy, Chris, and Beezer. Follow me @SamirKaji and give me your insights and questions with the hashtag #ventureunlocked. If you’d like to be considered as a guest or have someone you’d like to hear from (GP or LP), drop me a direct message on Twitter.

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