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

20VC: Why Small Markets are Better Than Big Markets, The Biggest Delusion of Early Stage VC, Why AI Investing is like a Horserace and Why The Most Ambitious Companies Growing the Fastest are not the Best Investments with Adam Fisher, Partner @ Bessemer

Jan 22, 2024

Adam Fisher, Partner at Bessemer Venture Partners, shares his impressive journey in venture capital with over 60 investments and 23 successful exits. He debunks the myth that high-growth companies are always the best investments, advocating for smaller markets instead. Adam emphasizes the importance of recognizing effective entrepreneurs and the delicate balance of risk-taking. He discusses the evolution of VC from a boutique business to a more collaborative approach, while highlighting the nuances of negotiation and the significance of culture fit in hiring.

01:11:48

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Adam Fisher

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Quick takeaways

Investing in the most ambitious and fastest-growing companies doesn't guarantee success, as they often crash and burn. The real value in a company is often created in the last 12-18 months of its existence. Investors need to decide if they want to focus on one big success or multiple hits.

Having experience and pattern recognition helps investors identify potential pitfalls and avoid making certain mistakes. It allows them to recognize what won't work and save time. Experience also helps with analyzing founders and their fit with the investor and the company's stage.

Assessing market size is crucial, but it's not always about creating a new category from scratch. Starting in smaller markets or niche segments can provide opportunities for growth and expansion into adjacent sectors. Evaluating the potential to grow and evolve within the market is essential.

Deep dives

Importance of selecting the right companies

Investing in the most ambitious and fastest-growing companies doesn't guarantee success, as they often crash and burn. The real value in a company is often created in the last 12-18 months of its existence. Investors need to decide if they want to focus on one big success or multiple hits.

Efficiency Lies in Taking Risks and Showing Entrepreneurial Signs

01:31

The Outsider Advantage and Category Creation

02:05

Pattern recognition in VC is most valuable for identifying what won't work,…

01:00

Cut losses quickly but be patient for long-term value creation

01:24

Intro

4min

Navigating the Evolution of Venture Capital

18min

Identifying Signs of Entrepreneurial Efficiency and Risk-Taking

2min

Navigating Market Dynamics in Venture Capital

8min

The Dual Nature of Pattern Recognition in Venture Capital

2min

Hiring for Culture Fit and Strategic Valuation

14min

Navigating Capital Concentration in Venture Capital

18min

The Path to Confident Investing: Early Exits and Market Realities

3min

The Joy of Learning and Sharing Knowledge Through Podcasting

4min

Adam Fisher is a Partner @ Bessemer Venture Partners and one of the most successful investors in Israel over the last two decades with seed investments in Fiverr, Wix, Melio, HiBob and more. Adam has now made over 60 investments and has had an incredible 23 successful exits. Adam has now been in venture for over 27 years having started his career at Jerusalem Venture Partners in 1996.

In Today's Episode with Adam Fisher We Discuss:

1. Lessons from 27 Years in Venture Capital:

How did Adam first make his way into the world of venture straight out of college?
Does Adam agree with Doug Leone that VC has changed from a "boutique, high margin business to a commoditized, low margin industry"?
What does Adam know now that he wishes he had known when he started in venture?

2. How to Pick Winners: 23 Exits in 60 Investments:

To what extent does Adam think pattern recognition is a good thing? When is it bad?
Does Adam prefer to invest in outsider founders approaching a problem with fresh eyes or insider founders who know the problem back to front?
Why does Adam believe that "category creation is BS"?
Why does Adam not like to invest in big, hugely ambitious markets? Why are smaller markets best?

3. The Deal: Mastering the Art of Negotiation and the Deal:

How does Adam reflect on his own relationship to price?
When doing an investment, does Adam think about who would do the next round?
How important is ownership to Adam? Does he want it all on first check?
Why does Adam not like to invest in hot AI rounds?
What have been Adam's single biggest investing mistakes? How did it change his approach?

4. Mastering the Art of Portfolio Management:

Why does Adam believe that it is impossible to know which of your portfolio will be the breakout winners early on?
How does Adam approach reserve allocations with this in mind?
How does Adam know when is the right time to sell a position?
What does Adam believe was the biggest sin of the zero interest rate environment period?

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

20VC: Why Small Markets are Better Than Big Markets, The Biggest Delusion of Early Stage VC, Why AI Investing is like a Horserace and Why The Most Ambitious Companies Growing the Fastest are not the Best Investments with Adam Fisher, Partner @ Bessemer

Episode guests

Podcast summary created with Snipd AI

Quick takeaways

Deep dives

Importance of selecting the right companies

The role of experience in venture investing

The challenge of market size and category creation

Considerations in hiring and the importance of fit

The Importance of Timing in Investing

The Misalignments between Founders and Investors

Efficiency Lies in Taking Risks and Showing Entrepreneurial Signs

The Outsider Advantage and Category Creation

Pattern recognition in VC is most valuable for identifying what won't work,…

Cut losses quickly but be patient for long-term value creation

Remember Everything You Learn from Podcasts

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

20VC: Why Small Markets are Better Than Big Markets, The Biggest Delusion of Early Stage VC, Why AI Investing is like a Horserace and Why The Most Ambitious Companies Growing the Fastest are not the Best Investments with Adam Fisher, Partner @ Bessemer

Episode guests

Podcast summary created with Snipd AI

Quick takeaways

Deep dives

Importance of selecting the right companies

The role of experience in venture investing

The challenge of market size and category creation

Considerations in hiring and the importance of fit

The Importance of Timing in Investing

The Misalignments between Founders and Investors

Efficiency Lies in Taking Risks and Showing Entrepreneurial Signs

The Outsider Advantage and Category Creation

Pattern recognition in VC is most valuable for identifying what won&#39;t work,…

Cut losses quickly but be patient for long-term value creation

Remember Everything You Learn from Podcasts

Pattern recognition in VC is most valuable for identifying what won't work,…