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This Week in Startups
E1075: Cendana Capital’s Michael Kim on investing in Seed funds as a serial LP, Robinhood as an acquisition target, greatest Seed funds of all time & more
Jun 16, 2020
Join Michael Kim from Cendana Capital, an expert in fund of funds investing, as he dives into the intricacies of seed funds. Discover why ownership percentages matter so much and what traits make a great seed fund manager. Kim shares his insights on the current influx of new fund managers and the strategic advantages of secondary share sales. The discussion even touches on whether Robinhood might be a target for acquisition and why now is an excellent time to invest in early-stage startups as the landscape shifts dramatically.
01:14:29
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Quick takeaways
- A fund of funds model allows investors to access diverse seed investments, simplifying management for those without specialized expertise.
- Ownership stakes of 10 to 20 percent are crucial for fund managers, influencing their returns and overall investment success.
Deep dives
Understanding Fund of Funds
A fund of funds serves as an investment management firm that aggregates capital from various institutional investors, family offices, and individuals. This capital is then strategically allocated to invest in other venture capital funds, allowing for exposure to a wider selection of potential investment opportunities. The operational model of a fund of funds provides an avenue for larger investors, such as universities and small foundations, to gain access to seed funds that may not directly suit their investment strategies. This structure is particularly beneficial for those without the resources or expertise to effectively manage seed investments independently.
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