Michael Kim, Jason Calacanis, and David Weisburd on VC marks, Rabois leaving FF for Khosla, and more | E1879

Jan 12, 2024

Michael Kim, Founder of Cendana Capital, joins Jason Calacanis and David Weisburd to delve into the nuances of venture capital. They discuss the doubts limited partners (LPs) share regarding how general partners (GPs) mark startups, stressing the need for transparency and consistency. The trio also explores recent industry shifts, like Keith Rabois's move from Founders Fund to Khosla Ventures, and the ethical implications of founder liquidity and secondary sales, revealing the complexities of maintaining trust and relationships in the ever-evolving startup landscape.

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INSIGHT

LP Doubts on VC Marks

LPs doubt VC valuations, especially during market downturns.
This "denominator effect" happens when public equities fall, making private portfolios seem over-allocated.

ADVICE

Valuation Red Flags

Overstating or being slow to mark down valuations raises red flags for LPs.
It signals a lack of sophistication or diligence in valuation practices.

ANECDOTE

No Standard in Valuations

Jason Calacanis, as an LP, focuses on MOIC and DPI.
He's surprised by the lack of standardization in valuations across funds.

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Today’s show:

Michael Kim joins David Weisburd and Jason Calacanis to discuss LP doubts around GPs marking startups (2:43), LP portfolio construction (13:44), secondary strategies (19:57), Keith Rabois returning to Khosla Ventures (35:15), and more!

Timestamps:

(0:00) David Weisburd hosts Michael Kim and Jason Calacanis to dive into the world of VCs, LPs and GPs

(2:43) Exploring the doubts LPs may have about how VCs are marking startups

(7:51) Jason's strategy as an LP in funds and the search for a universal gold standard in LP benchmarks

(10:14) Why LPs might be incentivized to allow markups from GPs

(12:49) Northwest Registered Agent - Get a 60% discount on your next LLC at http://www.northwestregisteredagent.com/twist

(13:44) LP portfolio management best practices

(19:57) Evaluating different GP strategies for secondary deals

(24:37) DevSquad - Get an entire product team for the cost of one US developer plus 10% off at http://www.devsquad.com/twist

(25:44 ) Comparing "idealistic" and "pragmatic" fund manager archetypes. what the right number is for a founder to sell in secondary

(33:39) OpenPhone - Get 20% off your first six months at http://www.openphone.com/twist

(35:15) Breaking down Keith Rabois leaving Founders Fund to return to Khosla Ventures

(44:52) Addressing the challenges and responsibilities of starting a new firm

(48:08) Bill Ackman’s crusades, how LPs look at backing outspoken GPs

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