E87: Lessons from Investing in 1,400+ Startups - Jamie Biddle and Steve Kim

Jamie Biddle (Founding Partner and CEO) & Steve Kim (Partner, Investment Strategy and Risk Management) of Verdis Investment Management, sit down with David Weisburd to discuss how Verdis has managed to invest into 41 unicorns by indexing early-stage venture capital funds, how they came up with the venture index thesis, and the practical considerations of executing on their venture index strategy. They also discuss the purpose of venture in a diversified portfolio, the benefits of QSBS for taxable investors, and avoiding adverse selection in venture capital. (0:00) Introduction to Virtus and venture capital investment strategies (2:05) Family office investment strategy and tax considerations (5:02) Indexing early-stage venture capital and balancing beta and alpha (7:22) Key factors in venture capital returns and portfolio construction (9:56) Impact of QSBS and performance metrics on venture strategy (12:49) Managing family office investments and unicorn investments (16:02) Power laws in venture capital, crypto, and sector vs. generalist funds (19:22) Venture strategy execution, operational focus, and network access (21:10) Origin, methodology, and barriers to replicating Virtus's venture thesis (23:12) Operational challenges in venture investing and CFO's role (24:22) Shifting focus in venture investing and importance of data transparency (26:52) Constraints and the importance of patience in venture strategy (28:40) Evaluating TVPI as a predictor of DPI