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

20VC: Oren Zeev on Raising 3 Funds and $1BN in 12 Months; Why Temporal Diversification is BS, Why Both LPs and GPs are Way Over-Diversified & Why Venture Partnerships are Sub-Optimal and Challenging

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May 23, 2022

Oren Zeev, Founding Partner at Zeev Ventures, is a pioneer of solo capitalism, having invested in notable companies like Audible and Houzz. In this conversation, he argues that the benefits of temporal diversification are overstated and shares insights on raising three funds totaling over $1BN in just a year. Oren challenges traditional partnership models in venture capital, advocating for independent decision-making. He also emphasizes the importance of ownership psychology and maintaining a founder-centric approach in investment strategies.

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ANECDOTE

Comparing Downturns

Oren Zeev compares the current tech downturn to the dot-com crash and 2008.
The dot-com crash was "nuclear" with businesses collapsing, while 2008 had a broader impact but less severe in tech.

ADVICE

Handling Downturn Psychology

Don't over-obsess with past investment mistakes in a downturn.
Focus on future opportunities and provide positive support to founders.

INSIGHT

Temporal Diversification

Oren Zeev argues against temporal diversification, prioritizing good deals over timing.
He raised three funds in 2021 and doesn't adjust his pace based on market conditions.

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Oren Zeev is the Founding Partner @ Zeev Ventures and one of the OGs of solo capitalism. Oren has an incredible portfolio including investments in Audible, Houzz, Chegg, Riverside, Tipalti, TripActions, and Firebolt to name a few. Oren is also very unlike any other VC firm, he does not employ any associates, principals, or staff. He doesn't have partners or partner meetings. No LP meetings. No processes. No investment committees or memos. Nada. Oren is doing it differently. Prior to starting Zeev Ventures, Oren spent 12 years as a GP @ Apax Partners where he c-headed their technology practice in their Silicon Valley office.

In Today’s Episode with Oren Zeev You Will Learn:

1.) Origins into Venture:

How did Oren make his way into venture over 20 years ago?
How does the crash of today compare to the dot com and 2008? What is the same? What is different?
Why did Oren decide to leave Apax and start Zeev Ventures on his own?

2.) Deployment Pace:

Why does Oren believe that the benefits of temporal diversification are overstated?
Oren raised 3 funds and over $1BN in a year, how does this current environment impact how Oren thinks about deployment pace? Will he change anything?
How does Oren explain deployment pace to LPs who question him?

3.) Ownership:

How central a role does ownership play for Oren in terms of his investor psychology?
Does Oren believe it is possible to increase your ownership in subsequent rounds, in your best companies?
What are the biggest mistakes that big funds make with regards to ownership requirements?
Why is there a misalignment between GP and LP when it comes to increasing ownership vs markups?

4.) Price Sensitivity:

How does Oren evaluate his own relationship to price today?
What have been some of Oren's biggest lessons on price from his biggest wins and losesses?
What mistake do the majority of investors make when it comes to price?

5.) Diversification:

Why does Oren believe that both GPs and LPs are wildly over-diversified in their portfolios?
What is the right amount of companies for GPs to have in their portfolio?
How does Oren advise LPs on the right amount of funds for them to be invested with?

6.) Oren Zeev: AMA:

What does Oren know now that he wishes he had known when he started his career in venture?
What elements of the world of LPs would Oren most like to change?
Why does Oren feel that the concept of pro-rata is a lazy one?

Item’s Mentioned In Today’s Episode with Oren Zeev

Oren’s Most Recent Investment: Bad Blood: Secrets and Lies in a Silicon Valley Startup