Venture Unlocked: The playbook for venture capital managers

Leo Polovets, Founding Partner of Susa Ventures, discusses topics such as building a venture thesis, the differentiation of VC firms, the importance of being helpful to founders, and portfolio construction. He also talks about the early days of Susa Ventures, the challenges of operating with a small fund size, and the process of raising funds and determining fund sizes. Additionally, he emphasizes the need for curiosity and open-mindedness in investing.

This episode is a fun one as I had the pleasure to interview Sahil Lavingia, founder of Gumroad, an online platform that allows creators to sell directly to their consumers. The company has facilitated the sale of $356 million in products since its launch in 2011 and now helps over 70,000 creators.Gumroad raised capital from legendary angels like Ron Conway, Chris Sacca, Naval Ravikant, and from distinguished venture firms such as First Round Capital, Accel Partners, and Kleiner Perkins. After a failed series B in 2015, Sahil was forced to lay off the majority of his staff and pivot his company building strategy to one atypical to the traditional venture model, but in the last year Gumroad doubled its ARR to $10MM. Drawing on his experiences as an angel investor backing companies such as Hellosign, Figma Design, and Lambda School, Sahil decided to raise his own venture vehicle and using the nascent AngelList Rolling Fund product, quickly secured $1MM/quarter in LP funding. Today’s he’s the most prominent AngelList Rolling Fund Manager with nearly $10MM of annual commitments. In this episode, Sahil and I discuss the following:* Sahil’s start at Pinterest and how he applies his founder experiences in investing.* His learnings from working with VC’s and his thoughts on what he believes makes for a great VC partner. * Why he decided to go down the investment route, and what was it like raising LP capital through a Rolling Fund. * Why founders may be more inclined to raise early capital from other founders rather than traditional institutional investors, and how Sequoia has created a savvy model to combat this trend. * Thoughts on the early stage funding market moving forward. * How he thinks about portfolio construction as a Rolling Fund investor. * His hopes for innovation in the venture: Expansion of rolling funds, buyers and sellers being directly connected, and the breaking of the geographical privilege bubble.Mentioned in this episode:* Gumroad* My blog post on rolling fundsI’d love to know what you took away from my conversation with Sahil Lavingia. 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.Also subscribe to Venture Unlocked on Itunes to ensure you’ll get each episode when it’s first released. 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

On this episode, we speak with Ted Maidenberg, co-founding partner of Tribe Capital, which he launched with his partners Arjun Sethi and Jonathan Hsu. I’m especially excited to bring this episode to you as Ted draws from experiences working within a Corporate VC (Time Warner), a traditional VC (USVP), and now has co-founded two firms known for their innovative approaches to investing —- Social Capital in 2011 with Chamath Palihapitiya and Mamoon Hamid, and most recently Tribe. Ted has also been part of investing teams that count investments such as Slack, Carta, and Survey Monkey. In this episode, Ted and I discuss the following topics:* Starting Social Capital after the global financial crisis* Starting and fundraising for a new firm (Tribe) in a very noisy market.* The importance of trust in venture teams, the role of partnership dynamics, and maintaining culture. * Their use of a data driven quantitative framework to evaluate companies through Cohort behavior and how this gives them an edge relative to heuristic only methods.* The importance of getting ownership of a company early, and how it impacts reserve strategy. * Their productized use of SPV’s in driving portfolio construction strategy, adding value to companies, and providing a unique return model for SPV and Fund LP’s. * Are there any other innovations that can/should happen in VC? * Ted’s advice for those that are just launching firms today. Mentioned in this episode:* The Magic Eight Ball* Social Capital and Tribe CapitalI’d love to know what you took away from my conversations with Ted Maidenberg; 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. 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

Jon Sakoda is the Founding Partner at Decibel, a venture firm that was created in partnership with Cisco (but independent in nature) in 2018 to invest in early-stage companies. Hear how Jon, who describes himself as a “recovering entrepreneur,” started his first company, Imlogic, Inc. which was eventually acquired by Symantec, and then joined New Enterprise Associates (NEA) in 2006 where he served as a partner for 12 years. During his time at NEA, NEA clearly established itself as the largest venture firm in the world and had raised a $2.5B fund well before the current mega-fund boom. In this episode, Jon and I cover the following topics:* Jon’s trajectory from being a technical operator to a VC. * The bundling and unbundling of venture capital, and what we should see going forward. * Do VC’s really add value? What leads to the belief by founders that they might not?* The role of Cisco and how it helps them differentiate and punch above their weight in helping founders. * How traditional economic LPs view corporate LPs and how GPs can navigate the discussions.* What new GPs often underestimate when starting a fundMentioned in this episode:* Decibel website, and their partnership with Cisco.I’d love to know what you took away from my conversations with Jon Sakoda; 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. 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

Jodi Sherman Jahic is a managing partner of Aligned Partners, a Silicon Valley-based venture fund investing in early-stage, enterprise technology companies that are have a lean toward capital efficiency. Jodi has nearly 20 years of venture experience and started Aligned Partners in 2011 with her co-founder Susan Mason. A meticulous designer of market strategies and a fierce ally of entrepreneurial founders, Jodi is recognized for her thought leadership in go-to-market strategies. Aligned has raised a total of $125 million across three funds.Prior to co-founding Aligned Partners, Jodi led the wireless sector for Voyager Capital and was co-founder and Managing Director of SCG, a pledge fund headquartered in San Francisco focusing on capital-efficient investments. Jodi was selected as an early Kauffman Fellow during her time at Battery Ventures. Previously, Jodi was on the founding team of three startups in North America and Europe, and she worked in the technology industry group at Andersen Consulting (now Accenture). Jodi is co-author of a 2007 book on venture capital investing. She is also a proud founding member of All Raise, focusing on fostering gender diversity in venture capital and tech. In this episode Jodi and I cover the following topics:* How working at larger funds motivated her to start a small fund focused on capital-efficient startups.* How she and her co-founder discovered that they’d work well together and how managers should think about partner selection* Her thoughts on portfolio construction and why they use a concentrated strategy. * The market incentives and social pressure to raise a large fund, and why they are committed to stay small. * Why it is critical to maintain transparent communication with LPs, and how they do it. * What could threaten the modest gains in gender equality in venture capital.Mentioned in this episode:* Aligned Partners* Kauffman Fellows* All RaiseI’d love to know what you took away from my conversations with Jodi; 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. 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

Follow me on Twitter @Samirkaji to get my ongoing and frequent updates on the early stage venture landscapeRoger Ehrenberg is the founder and Managing Partner of IA Ventures, an early-stage venture capital firm based in New York City. In this episode, Roger gives a master class on all aspects of starting and building a venture firm. IA is managing $475M across four funds, and is currently investing out of its $160M fourth fund. Fund 1 was a $50MM fund raised during the global financial crisis, with a first close of $17MM. Earlier in his career, Roger served as CEO of DB Advisors, was Global co-head of Deutsche Bank’s Strategic Equity Transactions Group, and was an investment banker at Citibank in derivatives, capital structuring and Mergers & Acquisitions.Roger currently sits on the Boards of Ethyca, Gospel Technology, Mighty, Octane and TransferWise, and was an early lead investor in both The Trade Desk (NASDAQ: TTD) and Datadog (NASDAQ: DDOG). Formerly, he served on the boards of Buddy Media (sold to Salesforce for $800M), Recorded Future (sold to Insight for $780MM), and Simple Finance (sold to BBVA for $120M). In this episode, Roger covers the following:* His background from going from M&A banking and hedge to early stage investing. * The opportunity and vision he saw for IA during the global financial crisis. * The amount of diligence he went through for choosing a partner. * How he made some unconventionally sized portfolio bets early in Fund 1 when the fund was still raising. * IA’s philosophy on fund sizing. * How he thinks about portfolio construction and recycling. * How he thinks about staying disciplined on ownership and valuation targets and when to have some flexibility.* The role of pattern matching and how IA tests and re-tests this. Here are some resources to learn more about Roger:* IA Ventures website* Roger’s Information Arbitrage blog. The following posts should be required reading for emerging managers:* Building a Seed Stage Venture Fund* Working to Build a Better Mousetrap* Thoughts on distribution strategy * A presentation Data-Driven Business Models for The Research Board’s Global CIO Conference 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

Charles Hudson is the Managing Partner and Founder at Precursor Ventures, one of the first and most active pre-seed focused venture firms in the world. Precursor seeks to invest in a company’s first round of institutional investment and focuses on investments in B2B software applications, B2C software and services, and connected hardware. Prior to founding Precursor Ventures, he spent 5 years as a Partner at Uncork Capital (formerly known as SoftTech VC). Charles was also the Co­Founder and CEO of Bionic Panda Games, a mobile games startup. Prior to this he held Business Development roles for Serious Business (acquired by Zynga), Gaia Interactive, and Google. Prior to joining Google, Charles was a Product Manager for IronPort Systems, and he worked at In-Q-Tel, the venture capital fund backed by the Central Intelligence Agency. Charles holds a BA and an MBA from Stanford University.In this episode, Charles and I cover the following topics:* What his thought process was of spinning out of an established seed firm to start his own firm. * Why positioning your fund correctly represents such a critical part in fundraising successfully.  * His experience raising his first two funds relative to what he expected. * How he manages his time as a solo GP. * Why running a venture firm is actually multiple businesses in one. * The role of diversity in venture, and the opportunity ahead. Mentioned in this episode:* Precursor Ventures* Diversity & Inclusion in the VC Industry study by the NVCA and DeliotteI’d love to know what you took away from my conversations with Charles; Follow me @SamirKaji and give me your insights and questions with the hashtag #ventureunlocked. If you’d like to considered as a guest, or have someone you’d like to hear from (GP or LP), drop me a direct message on Twitter. 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

Elizabeth Yin is Co-Founder & General Partner at Hustle Fund, a pre-seed focused firm based in the Bay Area. Appropriately named, Elizabeth and her team truly epitomize the word hustle. She and her co-founder Eric raised $11.5MM Hustle Fund I in the fall of 2018 and more recently started investing out of a larger Fund II. The firm has a unique investment model that starts by investing $25K in each startups, and then by working closely with their entrepreneurs looks to upsize their commitments into select portfolio companies. Previously, Elizabeth was a partner at 500 Startups where she invested in seed stage companies and ran the Mountain View accelerator. In a prior life, Elizabeth co-founded and ran an ad-tech company called LaunchBit (acq 2014). Elizabeth has a BSEE from Stanford and an MBA from MIT Sloan.In this episode, Elizabeth covers the following:* What their journey in raising their first fund together was like. * How broad their LP outreach was, and how they managed hundreds of LP conversations. * The continuous nature of raising capital. * The role of brand in venture. * The thinking behind their unique portfolio construction model, and how they serve such a large group of portfolio companies. * How to efficiently manage a firm amidst all the competing priorities. * What she wishes she knew before she started Hustle Fund. Mentioned in this episode:* The Hustle Fund* Elizabeth’s post “How I Raised my $11.5m VC Fund”* Here’s her post on “11 Things I’ve learned from running a micro VC in the last year”* Elizabeth’s post “How Do VCs Make Money?”Hope you enjoy the episode, feel free to tweet or DM me @samirkaji your further questions from the show or other guests you think I should invite to the show under the hashtag #ventureunlocked.  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

I’m excited to announce the imminent release of Venture Unlocked, the first podcast dedicated solely to helping emerging venture investors launch, operate, and scale successful venture capital firms. The trailer embedded here provides a bit of background on the podcast —- if you like what you hear please forward this email to your friends and colleagues and encourage them to sign-up for the Venture Unlocked podcast on substack.On Tuesday September 29th, we are thrilled to release the first episode of Venture Unlocked featuring Elizabeth Yin of the Hustle Fund, who transparently spoke about her journey in raising fund 1 (and the # of LP’s they spoke to!), how they work together as a partnership, and the system Hustle Fund uses to add value to entrepreneurs. Until now, mentorship in launching and building a venture firm has only been available in small doses. Our objective is to level the playing field by unlocking the best practices of building a great firm and driving better and more diverse capital to founders. 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