E10: Michael Kim | Founder of Cendana Capital on How Small VC Funds Can Return 200X+

Michael Kim, founder and Managing Partner of Cendana Capital sits down with David Weisburd and Erik Torenberg to discuss his thesis of creating a fund of funds at seed stage, insights into the changing landscape of VC from the 90s to today, and whether VC should recycle capital. Cendana Capital has invested in Forerunner Ventures, K9 Ventures, and IA Ventures.

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(0:00) Introduction to successful small funds and the Nano program (0:54) Michael Kim's background and career trajectory (3:15) Transition to the LP side and changes in the venture capital market post-2008 (6:32) Impact of mega funds on investment strategies and growth of seed funds (11:49) Success and challenges of the Nano program (14:21) Dynamics of fund size and portfolio construction (17:06) Economic trade-offs in raising larger funds and importance of ownership in portfolios (24:00) Trends in fund size scaling and raising institutional capital (26:13) Role of different types of LPs and co-investment strategies (29:49) Hands-on approach with fund managers and advisory examples (36:10) Impact of the market reset on venture capital and top quartile importance (43:56) Portfolio construction, partnership risk, and reupping with core managers (47:28) Portfolio refreshment, time diversification, and manager concentration (49:02) Closing thoughts on Sendana's investment philosophy and evolutionary psychology (50:38) Closing remarks and outro