Venture Unlocked: The playbook for venture capital managers cover image

Investing in USV Fund I, lessons learned as a LP, and why Emerging Managers are so important

Venture Unlocked: The playbook for venture capital managers

NOTE

Recommendations of portfolio of funds

To successfully invest in smaller and emerging managers within a $10 billion fund, it's essential to assess available resources, including staff, bandwidth, risk tolerance, and processes. If lacking, forming partnerships with fund of funds, external resources, or platforms can provide necessary expertise and networks. When equipped, prioritize sector-focused strategies to access intriguing investment areas, opting for vertical specialists over generalists. Emphasizing early-stage investments, especially seed and Series A, aligns well with potential risks and rewards. Mid-stage investments should be approached cautiously, while growth investments in B2B and enterprise SaaS represent attractive opportunities. Limit the number of partners in funds to no more than four, targeting total fund sizes typically between $150 million and $400 million, with a preference for average sizes around $200 million. By concentrating on small partnerships with proven prowess and leveraging sector-specific networks, you can effectively enhance exposure and capitalize on the illiquidity premium inherent in these investments.

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