This Week in Startups

Dry Powder in Venture Capital, VC Ratings, and more with Grady Buchanan and Victor Gutwein | E1895

Feb 9, 2024

01:29:44

Snipd AI

Grady Buchanan and Victor Gutwein join David Weisburd to discuss dry powder in VC, VCs rating VCs, whether returns persist in venture capital, GP selection for LPs, transparency and due diligence in the venture capital industry, the connection between random success and decision-making, finding the right venture capitalists, evaluation process for venture capital investments, importance of competitive analysis, and Founder Fridays meetup program.

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Quick takeaways

Access to top venture capital funds and their brand reputation are crucial factors for LPs when making investment decisions.

Reputation and network play a significant role in LPs' decision-making process when selecting venture capital funds to invest in.

A University of Chicago study confirms the persistence of top-quartile returns in venture capital, emphasizing the importance of selecting funds based on historical performance.

Maintaining intellectual honesty and having a well-defined investment process are vital for venture capital funds.

Deep dives

Importance of Access and Brand in Venture Capital

Access to top venture capital funds and their brand reputation are crucial factors for LPs when making investment decisions. LPs seek out funds with a strong track record of success and a differentiated approach to investing. The persistence of returns in the venture capital industry further highlights the importance of getting into top-performing funds, as data shows that a significant portion of funds that achieved top-quartile returns in the past continue to perform well in subsequent funds. As the market becomes more saturated with emerging managers, LPs face the challenge of distinguishing signal from noise in their search for the most promising investment opportunities.

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03:19

Introduction

3min

Challenges and considerations in managing a fund of funds in venture capital

8min

Managing Capital Efficiency and LP Perspectives

4min

Venture capital funds and management fees

12min

Transparency and Due Diligence in the Venture Capital Industry

3min

Transparency, Mistakes, and Unethical Practices

10min

The Connection Between Random Success, Programs for Founders, and Decision-Making in Venture Capital

4min

Finding the Right Venture Capitalists

22min

Evaluation Process for Venture Capital Investments

6min

10.

Importance of Competitive Analysis and Assessing the Competition

13min

11.

Founder Fridays: Connecting and Collaborating for Startup Success

5min

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Todays show:

David Weisburd hosts Grady Buchanan, Victor Gutwein, and Jason Calacanis to discuss dry powder in VC (1:38), VCs rating VCs (14:22), a study on whether returns persist in venture capital (29:33), and much more

Timestamps:

(0:00) David Weisburd hosts Grady Buchanan, Victor Gutwein, and Jason Calacanis

(1:38) VC dry powder levels, cash management by GPs, and investment pace adjustments.

(12:57) OpenPhone - Get 20% off your first six months at http://www.openphone.com/twist

(14:22) The importance of GP selection for LPs, VC firm ratings, and the impact of relationships in the VC ecosystem

(28:30) Lemon.io - Get 15% off your first 4 weeks of developer time at https://Lemon.io/twist

(29:33) Performing due diligence on funds and the persistence of VC Returns

(42:00) Northwest Registered Agent - Get a 60% discount on your next LLC at - https://www.northwestregisteredagent.com/twist

(51:41) Rapid-fire segment on top recent investments

Mentioned on the show:

⁠https://www.corraltech.com⁠

⁠https://www.hydeparkvp.com⁠