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

20VC: What It Takes To Raise A VC Fund & Investing in First Time Fund Managers with Michael Kim @ Cendana Capital

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Jul 6, 2016

Michael Kim, Founder of Cendana Capital, discusses the rise of seed funding, evaluating emerging fund managers, and portfolio construction in venture capital. He shares insights on LPs investing in startups, the importance of nurturing the next generation in VC firms, and Sandana Capital's investment philosophy.

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ANECDOTE

Michael Kim's Career Path

Michael Kim joined Rustic Canyon Partners in 2000 after working in M&A at Morgan Stanley.
He later served on the San Francisco public pension fund board, gaining LP experience.

INSIGHT

Rise of Seed Funds

Top VC firms grew significantly larger, while startup costs decreased drastically.
This created an opportunity for smaller seed funds, as large firms couldn't invest efficiently in small rounds.

INSIGHT

Seed Funding and the Economy

Seed fund proliferation has increased funding options for entrepreneurs.
This fuels innovation and benefits the economy, exemplified by the rise of the shared economy.

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Michael Kim is the founder and Managing Partner of Cendana Capital, a fund of funds which invests in seed VC funds. Michael has many of our previous guests in his portfolio including the likes of SoftTech, Freestyle, Founder Collective, Collaborative Fund and many more, clearly great minds think alike! Prior to Cendana, Michael was one of the original partners of Rustic Canyon Partners a VC firm with $1bn AUM.

In Today’s Episode You Will Learn:

1.) How Michael made his way into VC and then made the transition into the world of LP?

2.) Why have we seen the proliferation of seed funding? Is this a good thing for the economy? Is dumb money good or bad for the early stage environment?

3.) Chris Douvos states we will begin to see the hybridisation of LPs and GPs, does Michael agree? What are the inherent problems with this happening?

4.) What is Michael's blackbox for assessing emerging fund managers? What does he look for? How can they present their edge?

4.) How does Michael respond to Dave McClure's portfolio construction theory of allocating capital to many startups with the realisation that 0.5% become unicorns?

Items Mentioned In Today’s Show:

Michael’s Fave Book: Catcher & The Rye

Michael's Fave Blog or Newsletter: Techcrunch, The Twenty Minute VC

As always you can follow The Twenty Minute VC, Harry and Michael on Twitter here!

If you would like to see a more colourful side to Harry with many a mojito session, you can follow him on Snapchat here! This episode was brought to you by DesignCrowd, the online marketplace for custom graphic, logo and web design that helps startups, entrepreneurs, web developers and agencies outsource design projects to designers from around the world. How Does It Work? Once you have launched your brief, designers will begin submitting quality designs for you to review. With some constructive feedback, you can quickly generate a large gallery of designs that really do fit your needs. You can have exactly what you need within just three days. Once you have selected your favourite design, you will be sent all the files you require to update your branding. If you don’t like any of the submitted designs, then DesignCrowd offers a money back guarantee. So checkout designcrowd.com/VC and enter the promo code VC100 to get an astonishing $100 off your next project.