How I Invest with David Weisburd
E29: Lo Toney, Plexo Capital on How He Raised Capital from Google, the Ford Foundation, Mass Mutual
Jan 2, 2024
Lo Toney, fund manager and former angel investor at Plexo Capital, discusses his transition to fund management, the importance of patience in early-stage investments, the diligence process for managers, and the strategy behind selecting LPs. They also explore the significance of empathy in startups, the importance of non-performance factors in raising funds, the significance of Distributed to Paid-In Capital for institutional investors, the value of non-consensus viewpoints in venture capital, applying first principle thinking in early-stage startups, building a strong LP base, and Plexo Capital's global perspective.
55:23
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Quick takeaways
- Factors such as strategy, expertise, and ability to evaluate and win deals are crucial in assessing the potential of young firms.
- Plexo Capital spun out with Alphabet as an anchor LP, expanding its focus beyond black GPs to include people of color and women.
Deep dives
Evaluating young firms: Looking beyond IRR
When evaluating a young firm, it is important to look beyond the IRR. Factors such as the firm's strategy, expertise, and ability to evaluate and win deals play a crucial role. Understanding the GP's planned investment cadence, check size, and round size provides valuable insights. These considerations can help in assessing the potential of a young firm before the IRR becomes significant.
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