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

20VC: Inside The Mind of A Leading LP: How LPs Evaluate New Fund Managers on Everything from First Meeting to Portfolio Construction To Fees and Carry with Lisa Edgar, Managing Director @ Top Tier Capital Partners

Nov 4, 2019

In this conversation, Lisa Edgar, Managing Director at Top Tier Capital Partners, shares her unique journey into the venture capital landscape. She discusses the impact of economic cycles on investment strategies, highlighting critical changes in the venture ecosystem over 20 years. Lisa reveals how to effectively engage with LPs, demystifying the signs of a successful first meeting. She emphasizes the importance of GP commitment and fostering firm culture for long-term success, while also touching on the need for opportunity funds in today's market.

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ANECDOTE

Unplanned Career Path

Lisa Edgar's career path into venture capital was unplanned.
A recruiter suggested a fund-of-funds role, even though she didn't know what venture capital was.

INSIGHT

Bust Learnings

The dot-com bust taught Lisa Edgar about time and sector diversification.
The global financial crisis highlighted the importance of J-curve mitigation and cash flow management.

ADVICE

Warm Intros

Warm introductions are the best way to get a meeting with LPs.
LPs receive a lot of inbound requests, so warm intros stand out.

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Lisa Edgar is a Managing Director @ Top Tier Capital Partners, one of the leading venture fund of funds over the last decade. Included in their stellar fund portfolio is the likes of Index, Initialized, True Ventures, a16z and Boldstart, to name a few. Prior to Top Tier, Lisa was part of the asset management team at WR Hambrecht + Co focusing on new and emerging private equity funds. Before that, Lisa spent ten years at Horsley Bridge.

In Today’s Episode You Will Learn:

1.) How did Lisa make her way into the world of investing in funds and how did that lead to her becoming Managing Director at one of the leaders, Top Tier?

2.) Lisa has seen the boom and bust of the macroeconomy twice now, how has that impacted her mindset today when investing in funds? What have been the most prominent changes in the venture ecosystem that Lisa has seen over the last 20 years? What changes have been good? What changes have been bad?

3.) What is the best way to get in the room with LPs? Does it have to be through warm intro? What are the signs for the GP that that first meeting went well? If an LP does not respond to emails, does that mean they don't want to do it? How does Lisa and Top Tier structure the investment decision-making process? How does that differ when re-investing in existing managers? Is it worth it for first-time funds to pitch institutions for fund 1 when they know they will not invest in the fund?

4.) How does Lisa think about GP commits today? How does Lisa look at what is reasonable and what is required? Is it individual and context-based? How does Lisa feel about different carry structures? Are kickers when past a certain return profile amenable to LPs?

5.) Lisa has seen some of the best emerging managers in the US over the last decade, what learnings does she have from them in terms of what separates the good from the great? How do they think about partnership dynamics? How do they think about firm culture? How do they think about generational transition?

Items Mentioned In Today’s Show:

Lisa’s Fave Book: From the Mixed-Up Files of Mrs. Basil E. Frankweiler

Lisa’s Most Recent Investment: Boldstart Ventures

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