The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch

20VC Roundtable: Why Early Stage Founders Should Not be Investing, Why Great Founders Have Low EQ, How the Structure of VC Firms Will Change, Will Founder-Led Funds Compete with Sequoia & Is Investing a Team Sport?

Nov 3, 2023

Jack Altman and Auren Hoffman discuss the rise of founder-led funds and their impact on the startup ecosystem. They explore the value of founders as investors, the advantages of being an operator when it comes to investing, and the challenges of deploying large amounts of capital in later stage investments. The speakers also debate the potential increase in value of three IPOs and discuss sponsor ads for Mercury and Coda.

49:53

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Episode guests

Auren Hoffman

Jack Altman

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Quick takeaways

Founder-led funds offer unique advantages, providing tactical advice and support from experienced founders.

Division of responsibilities and expertise in founder-led funds leads to a comprehensive and effective investment approach.

Founder-led funds positively impact company performance by leveraging operational expertise and offering valuable insights.

Deep dives

Founder-led funds and their advantages

Founder-led funds, run by founders who are actively managing their companies while also managing institutional outside capital, offer unique advantages. One advantage is the source of tactical advice and support from someone who has experienced the challenges that founders face. Founders as investors can provide relevant, up-to-date insights compared to traditional venture capitalists. Additionally, founder-led funds offer a different perspective and a combination of operational experience and investment expertise. The involvement of founders in investing not only benefits the founders but also provides an edge for LPs by combining operational experience with a strong brand presence.

The CEO's Responsibility and Priorities

01:32

Evolution of LPs' Investment Preferences and Perception Change over Time

01:37

The Importance of Operator Experience in Venture Investments

01:37

Introduction

2min

Discussing Positive Experiences with Mercury and Coda

2min

The Value of Founders as Investors

8min

The Advantages of Being an Operator

13min

LPAC Agreements and Prioritizing Edges

11min

Founder-Led Funds: Challenges and Considerations

10min

Debating IPO Bets and Discussing Sponsors

2min

Sponsor Ads: Mercury and Coda

2min

Jack Altman is the Founder and CEO @ Lattice, the #1 people management platform, last valued at $3BN. Jack is an investor through his founding of Jack Altman Capital where he has invested in WorkOS, NexHealth, Owner.com, Mercury and more.

Auren Hoffman is the Founder and CEO @ Safegraph, the most accurate database of global points of interest, last valued at $550M. Auren is an investor through his founding of Flex Capital where he has invested in Chime, Checkr, Coinbase, Flexport, Vercel and more.

Jason Lemkin is the Founder and CEO @ SaaStr, the world's largest SaaS community. Jason is an investor through his founding of The SaaStr Fund. In the past, Jason has invested in Pipedrive, Algolia, Salesloft, Front, GreenHouse, Owner.com, Gorgias and more.

In Today's Episode on Founder-Led Funds We Discuss:

Why have we seen the rise of "Founder-led Funds"?
Are founder-led funds more empathetic to the founders they invest in?
How do founder-led funds source and pick investments in a way that traditional VC does not?
Will we see founder-led Funds truly compete against the Sequoias of the world?
How does being an operator make you a better investor?
How does investing help you be a better founder and operator?
How do you communicate your investing practice and firm to your company and team?
What are the biggest excitements and concerns LPs have for Founder-led Funds?
Will we see the face of venture changing much more broadly and structurally?
How do founder-led funds manage both time and company conflicts?

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The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch

20VC Roundtable: Why Early Stage Founders Should Not be Investing, Why Great Founders Have Low EQ, How the Structure of VC Firms Will Change, Will Founder-Led Funds Compete with Sequoia & Is Investing a Team Sport?

Episode guests