The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch 20VC: Lessons from 32 Years of Fund Investing | Why Exits Will Be Larger & Funds Sizes Bigger | Top Reasons to Turn Down Potential Fund Investments | Fees, Carry, Deployment Pace; What Do LPs Inspect When Fund Investing with David Clark, CIO @ Vencap
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Mar 25, 2024 David Clark, CIO of Vencap with 32 years in venture capital, shares his insights on the evolving landscape of fund investing. He recounts his unexpected journey into the field, sparked by a college romance. Clark discusses why being an LP is increasingly challenging, especially with the tightening margins in venture. He highlights the traits of highly successful funds and pitfalls that often lead him to decline investments. The conversation also touches on the significance of strategic leadership transitions essential for sustaining top-performing firms.
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Accidental LP
- David Clark's first job in finance was unplanned, driven by an ad in the Oxford Times and his girlfriend's potential reaction.
- He initially lacked venture capital knowledge but grew to love the field's dynamic nature and front-row seat to innovation.
LP Challenges and Strategies
- Being an LP is harder due to the sheer volume of funds seeking investment, requiring focused strategies.
- Vencap capitalizes on market downturns when the signal-to-noise ratio improves, allowing for better manager selection.
Power Law and Top Performers
- Venture capital's power-law distribution means a small percentage of exits drive most returns, often from the same top firms.
- Focusing on accessing those top firms is more effective than searching for the rare outlier.
