Diligence Questions: As Simple As They Are Complex | Youngrok Kim | Superclusters | S2E2
Mar 18, 2024
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Youngrok Kim discusses his journey from Japanese guitarist to LP, emphasizing the importance of data-driven investment theses. He delves into the hiring process at GREE LP Fund, the significance of quality signals in fund manager decks, extending investment periods, and the role of personal relationships in venture capital decisions.
Fund of Funds management offers lucrative opportunities with emerging managers
Utilize conversations and public data sources like PitchBook for investment research
Emphasize clear and direct questions for effective due diligence in the LP space
Deep dives
Transition to VC Investment Experience
Young Rock Kim describes his transition from a rock musician with a passion for Japanese culture and rock music to venturing into the world of venture capital investment in 2016. His unique journey from playing music in Japan to studying computer science and serving in the military led him to exploring and eventually excelling in the venture capital industry.
Insights into Fund of Fund Strategy
Through experiences in cryptocurrency investments, Young Rock Kim identified the potential of backing emerging managers as a lucrative investment strategy. This realization led him to focus on Fund of Fund management, recognizing the rising importance of these emerging managers and the potential returns they could deliver. Kim's research and commitment to this strategy reflect a data-driven and forward-thinking approach in the LP space.
Utilizing Public Sources and Conversations for Research
Young Rock Kim emphasizes the importance of utilizing publicly available information, conversations with industry peers, and data sources like PitchBook for investment research. By leveraging insights from conversations and publicly accessible data, Kim validates investment theses and gains critical insights for decision-making, highlighting the significance of conversational inputs and data-driven research in shaping investment strategies.
The Power of Asking Simple Questions in Investment Due Diligence
Investment managers emphasize the importance of asking straightforward questions during due diligence processes. They highlight the effectiveness of focusing on simple but crucial queries rather than convoluted ones. By opting for direct inquiries, managers aim to uncover the core capabilities and strategies of emerging managers, steering away from excessive embellishments in presentations. The podcast underscores the value of clear, concise communication to grasp the true essence and potential of investment opportunities.
The Significance of Personalized Relationships in Fund Management
The episode delves into the evolving role and expectations within venture capital relationships, stressing the importance of personalized connections alongside strategic value propositions. It discusses the balance between personalized engagement and the strategic benefits that LPs and GPs can offer each other. Emphasizing proactive and transparent communication as key cornerstones, the podcast suggests that successful fund managers often prioritize over communication with their LPs to align financial goals and operational strategies effectively.
Youngrok Kim is a Partner at GREE LP Fund, a Fund of Funds operating in the US and Japan. Previously, he held the position of SVP at Recruit Strategic Partner, the strategic investment arm of Recruit Holdings, a major internet company in Japan. Youngrok began his career as an engineer at Goldman Sachs before transitioning to a VC career at ARCH Venture Partners in Chicago. He earned an MBA from the University of Chicago and received his degrees in Information Technology from Aoyama Gakuin University in Tokyo.
You can find Youngrok on his socials here:
Twitter: https://twitter.com/youngrock46
LinkedIn: https://www.linkedin.com/in/youngrok-kim/
And huge thanks to this episode's sponsor, Alchemist Accelerator: https://alchemistaccelerator.com/superclusters
OUTLINE:
[00:00] Intro
[04:10] How did Youngrok find himself in Japan?
[09:29] Picking up the Japanese language
[20:29] How did Youngrok go from Japanese guitarist to being an LP?
[26:50] From pitching LPs on a fund-of-funds to getting a job offer from a prospective LP
[33:21] GREE LP Fund's hiring process
[37:40] The three sources of data that helped Youngrok's fund-of-funds thesis come together
[44:17] Superpowers and where to reference check them
[48:57] Simple versus nuanced questions for fund managers or reference checks
[56:12] One thing that many GPs think is special but actually isn't for an LP
[58:52] What makes a good LPAC member?
[1:00:26] What are typical questions GPs have for their LPACs?
[1:05:28] Why GP friendships with other emerging managers might be becoming less important?
[1:11:55] A fun fact about Youngrok's name
[1:12:55] Playing a number game with Youngrok
[1:16:05] Thank you to Alchemist Accelerator for sponsoring!
[1:18:41] Like, comment, or subscribe if you enjoyed this episode!
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