Venture Unlocked: The playbook for venture capital managers
Ben Casnocha on his learnings from working with Reid Hoffman, building network incentives, and the art of portfolio construction.
Podcast summary created with Snipd AI
Quick takeaways
- Building strategic networks is crucial for venture capital firms to create maximum impact and support for entrepreneurs.
- Village Global implements a unique incentive model within their community to align interests and foster collaboration and shared success.
- Village Global operates with a broad portfolio construction model, investing in a diverse range of companies to maximize impact through their network strategy.
Deep dives
Importance of Building Strategic Networks
Building strategic networks is essential for venture capital firms to create the maximum impact and support for entrepreneurs. It allows for knowledge and idea sharing, as well as opportunities for collaboration and mentorship. Village Global emphasizes the value of their network strategy as a core part of their firm's approach.
Unique Incentive Model within the Village Community
Village Global implements a unique incentive model within their community, where they share the GP carry with their network leaders. This model allows them to align the interests of the individuals involved and foster collaboration and shared success.
Portfolio Construction Model
Village Global operates with a broad portfolio construction model, where they invest in a diverse range of companies. They believe in the potential for unique insights and learning that come from a broad network and collaboration with founders at different stages of growth. Their goal is not solely to achieve high ownership percentages but to maximize the impact through their network strategy.
Rise of the Individual in Venture Capital
There is a noticeable trend in the venture capital industry towards the rise of individual investors, including angels, scouts, and solo capitalists. Founders are increasingly opting to raise funds from a group of individuals rather than traditional institutional seed funds. Village Global recognizes the value and potential of this trend and aims to support and collaborate with these individuals.
Flexible Ownership Approach
Village Global maintains a flexible approach to ownership percentages in their investments. While they have a target of 5-7% ownership, they are open to making exceptions based on unique circumstances. They track their performance in achieving their ownership target to ensure a balanced approach.
Follow me @samirkaji for my (usually) daily thoughts on the world of venture capital.
We’re pleased to provide this week’s episode with Ben Casnocha, founding partner of Village Global.
Prior to Village, Ben was an entrepreneur and also acted as Chief of Staff at LinkedIn and Greylock working directly with Reid Hoffman. Ben has also co-authored two New York Times bestselling management books, The Alliance: Managing Talent in the Networked Age (with LinkedIn chairman Reid Hoffman and entrepreneur Chris Yeh). and The Start-Up of You: Adapt to the Future, Invest in Yourself, and Transform Your Career (with Reid Hoffman).
Village ventures has $250M AUM and was co-founded with Erik Torenberg, Founder and current chairman of On Deck, and Product Hunt’s first employee. Together, they’ve invested in over 200 companies, and use a very unique community driven approach to serve their founders. The firm is based in Silicon Valley and backed by some of the world’s most successful entrepreneurs in Mark Zuckerberg, Jeff Bezos, Bill Gates, Reid Hoffman, and Sara Blakely.
We chat with Ben about the importance of curating networks, how they use an unique incentive model within the Village community, how they performed their portfolio construction model, and what venture trends are here to stay.
A message from our sponsor
Standish is the largest provider of fund administration services to Venture Capital funds globally. Currently, we serve approximately 750 Venture Capital funds and have more than $150 billion in committed capital under administration.
Standish has been designed by experienced Chief Financial Officers with a deep understanding of the service needs of both finance departments and General Partners at every stage of the product life cycle. Standish can handle all of the needs of finance department so General Partners can focus on investing.
Standish is an employee owned company.
https://www.standishmanagement.com/
In this episode we discuss:
02:10 Why Ben doubled down on venture capital
04:43 Ben’s learnings from working with Reid
08:08 How the fund leverages its relationships with luminary LPs
11:27 Curating networks for scale
14:30 Monetary and access incentives for collaborators in the VC community
18:08 What characterizes a great founder/ learnings from luminaries
21:55 The firm’s feedback framework
25:08 How Ben and team constructed their portfolio
29:49 Village’s acquisition and exit models
32:39 How does Ben think about flexibility and rules when it comes to ownership
34:50 Trends driving the current venture ecosystem
38:26 Relationship between institutions and seed funds
40:45 Looking into the future: What does Fund 5 look like for Village
42:22 What Ben has learned so far
43:18 How his thinking has changed over his career
45:44 Ben’s biggest inspirations
Mentioned in this episode
Disclaimer: This presentation does not constitute an offer to sell or the solicitation of an offer to buy any security. No representation is being made that any investor or portfolio will, or is likely to, achieve profits or losses similar to those discussed. Targets discussed have been established based on several assumptions that may vary depending on the type of investment. There is no guarantee that the conditions on which such assumptions are based will materialize as anticipated and will be applicable to Village Global’s portfolio investments.
I’d love to know what you took away from this conversation with Ben. Follow me @SamirKaji and give me your insights and questions with the hashtag #ventureunlocked. If you’d like to be considered as a guest or have someone you’d like to hear from (GP or LP), drop me a direct message on Twitter.
Podcast Production support provided by Agent Bee Agency
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit ventureunlocked.substack.com
Remember Everything You Learn from Podcasts
