Venture Unlocked: The playbook for venture capital managers

Follow me @samirkaji for my thoughts on the venture market, with a focus on the continued evolution of the VC landscape.

Our guest today is Shauntel Garvey, co-founder and general partner of education tech focused Reach Capital. She has a long history investing in ed-tech companies stemming back from her time at NewSchools Venture Fund.

What I love about the Reach team is how thoughtfully they’ve constructed their firm and partnership which by far is one of the most diverse in all of venture. Currently Reach has $300 AUM and has invested in companies such as Mystery Science (acq by Discovery Education), Nearpod, Outschool, ClassDojo, and Epic.

Shauntel did her undergrad at MIT, and got a MA in Education and MBA from Stanford.

Listen to our conversation to learn more about how she’s seen the EdTech market evolve over the last few years and particularly since the pandemic, why they are active with portfolio companies after typical seed funds are, and how she thinks about investing thesis.

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Frank, Rimerman + Co.’s history is closely intertwined with that of Silicon Valley. With humble beginnings similar to so many start-ups, Frank, Rimerman was formed with a desire to serve the entrepreneurial and venture communities of the Valley and the determination to think outside-the-box.

When it comes to venture funds, we work with almost 500 VC groups from over 20 states across the USA. We have worked with over 350 fund groups throughout their first year, making us one of the leading providers in the country to emerging managers.

No one wants to be bored at work. That’s why we chose to work with some of the most innovative and creative people – people who are changing the world around us every day. Their excitement fuels our passion and determination to grow and serve this special community.

Frank, Rimerman + Co, Passion Works Here.

www.frankrimerman.com

In this episode we discuss:

01:29 Shauntel’s journey into VC

03:12 The decision to start Reach from NewSchools

04:39 Why they decided to go with a larger partnership in Fund 1

07:14 The challenges of raising a sector specific fund for a sector not well understood at the time

09:50 Pitching impact focused LPs vs return focused LPs

11:51 How sector-specific managers answer the question about being too narrow

16:18 Why despite being as seed fund, Reach stays with their companies throughout their lifecycle

20:06 How they think about hiring at Reach

21:51 How Reach looks at talent development as a part of its legacy

23:41 Things firms can do early to build a generational legacy

25:51 Developing and evolving an investment thesis

28:24 Creating systems to allow for proactive outreach and investment

30:03 Building strong a back office and operations

32:50 Shauntel’s greatest learning as an investor

33:55 What she’s learned from her misses

36:42 The investor she aspires to be more like

Mentioned in this episode:

* Reach Capital

We’d love to know what you took away from this conversation with Shauntel! Follow @SamirKaji and give your insight and questions using 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 a direct message on Twitter.

Podcast Production support provided by Agent Bee Agency

Follow me @samirkaji for my thoughts on the venture market, with a focus on the continued evolution of the VC landscape.

Today we’re excited to bring you my recent conversation with Mark Suster, managing partner at Upfront Ventures, a firm that was founded 25 years ago, originally as GRP partners.

Mark joined the firm in 2007 and became managing partner in 2011 and helped architect the new era of the firm while also actively evangelizing the now robust LA tech ecosystem. Upfront currently has $1.9B AUM and has invested in companies such as Overture,  Maker Studios, and Ring.

Prior to joining Upfront, Mark was a two-time operator, including selling the latter to Salesforce.com. He did his BA at UCSD, and got his MBA at the University of Chicago.

This was a fun one and we talked a lot about how they’ve rebranded and evolved as a firm, how raising funds is no different than enterprise sales, and the interesting paradox that faces every VC today.

A message from our sponsor

Frank, Rimerman + Co.’s history is closely intertwined with that of Silicon Valley. With humble beginnings similar to so many start-ups, Frank, Rimerman was formed with a desire to serve the entrepreneurial and venture communities of the Valley and the determination to think outside-the-box.

When it comes to venture funds, we work with almost 500 VC groups from over 20 states across the USA. We have worked with over 350 fund groups throughout their first year, making us one of the leading providers in the country to emerging managers.

No one wants to be bored at work. That’s why we chose to work with some of the most innovative and creative people – people who are changing the world around us every day. Their excitement fuels our passion and determination to grow and serve this special community.

Frank, Rimerman + Co, Passion Works Here.

www.frankrimerman.com

In this episode we discuss:

01:43    Mark’s journey into VC

04:16    Why he thought GRP was a good fit for him

08:22    How the firm transformed its investment focus

12:55    The process around the rebranding to Upfront Ventures

18:23    Human psychology of decisions

23:41    Why you need to be careful on when to share data rooms

27:41    How fundraising is like sales

33:05 Why creating scarcity is important

34:57    Talent retention and acquisition

42:26    The current state of the venture market 

Mentioned in this episode:

* The Righteous Mind: Why Good People Are Divided by Politics and Religion

* Why You Should Never Have A Data Room

We’d love to know what you took away from this conversation with Mark! Follow @SamirKaji and give your insight and questions using 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 a direct message on Twitter.

Podcast Production support provided by Agent Bee Agency

On this week’s show, we’re excited to bring you Satya Patel, co-founder of Homebrew, who he started with his partner Hunter Walk in 2013. Today, the firm is widely considered one of the top seed firms in the industry, counting companies such as Chime, Cruise, Eero, and Gusto as portfolio companies.

Satya brings a unique product background to the table as he worked on AdSense in the early days at Google, and later in various product roles at Twitter. He also spent time as an investor at Battery Ventures.

Satya and Hunter are incredibly thoughtful and detailed when they think about firm building, and during our conversation Satya and I discuss the hard conversations that potential partners need to have before starting a partnership, the unconventional way they raised their first fund, how Homebrew thinks about consistency with founder relationships, and fund sizing.

A message from our sponsor

Frank, Rimerman + Co.’s history is closely intertwined with that of Silicon Valley. With humble beginnings similar to so many start-ups, Frank, Rimerman was formed with a desire to serve the entrepreneurial and venture communities of the Valley and the determination to think outside-the-box.

Frank Rimerman works with almost 500 VC groups from over 20 states across the USA with 350 fund groups during their first year of existence, making them one of the leading providers in the country to emerging managers.

Frank, Rimerman + Co, Passion Works Here.

www.frankrimerman.com

In this episode we discuss the following topics:

01:13    How he and Hunter became friends and decided to work together again

03:12    Personal factors in deciding to start his own firm when there were so many other options for them.

06:50    How he and Hunter sorted through their strengths and weaknesses 

09:07    How were able to raise their first fund in 100 days by targeting institutional investors instead of relying on family offices like most Fund 1’s.

12:40    How they used scarcity and a hard close date to drive the process

19:11    The thought process behind moving up weight classes in investing

21:28    Different stages of investment require different skills

24:10    Number of investments vs. bigger ownership in a smaller portfolio

26:38    Interview questions for new hires + how they compensate the team

31:04 Homebrew to announce an effort to systematically further diversify VC

34:45 The best lesson he’s learned

37:08 Best advice for someone starting out in VC

38:29 The investors that has been most helpful to his career

Mentioned In This Episode:

* Homebrew

* All Raise

We’d love to know what you took away from this conversation with Satya! Follow @SamirKaji and give your insight and questions using 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 a direct message on Twitter.

Podcast Production support provided by Agent Bee Agency

We’re thrilled to bring you my recent talk with Jeff Clavier of Uncork Capital, one of the early trailblazers of the emerging manager community.

Jeff started investing in seed full time all the way back in 2004 well before the Micro-VC moniker was even conceived (back then we called them Super Angels). Today the firm is one of the most active seed funds in the market with over $500MM in AUM and having invested in companies such as Poshmark, Fitbit, Eventbrite, and Molekule.

In this episode is a broad conversation covering the history of VC, raising in a downturn, his thoughts on the hardest things about building the firm, and trends that are influencing the future of venture.

A message from our sponsor

Frank, Rimerman + Co.’s history is closely intertwined with that of Silicon Valley. With humble beginnings similar to so many start-ups, Frank, Rimerman was formed with a desire to serve the entrepreneurial and venture communities of the Valley and the determination to think outside-the-box.

Frank Rimerman works with almost 500 VC groups from over 20 states across the USA with 350 fund groups during their first year of existence, making them one of the leading providers in the country to emerging managers.

Frank, Rimerman + Co, Passion Works Here.

www.frankrimerman.com

In this episode we discuss the following topics:

01:54    Jeff’s start as an investor with $250k of his own capital, and his first investment

03:01    The decision to start a fund with third party capital

06:10    Fundraising in the global financial crisis of 2008

09:01    The strategy shift in fund III and the questions it raised from LPs

12:10    Why Uncork has kept funds smaller thus far

16:45    Thoughts on the service provider model VC’s need to embrace

19:16    Building a multi-generational firm with brand recognition

21:36    How to attract high-quality talent

23:46    The day-to-day challenges of running a firm

25:56    Maintaining culture with remote work

30:56    The future of VC after the pandemic

34:48    The amount of firms and innovation in the market today and what it means

39:24    How the future is so hard to predict

40:38    The best advice he’s gotten as a VC

42:51    His biggest miss and the lesson he learned from it

46:19    The advice he would give to a new manager

Mentioned In This Episode:

* Uncork Capital

We’d love to know what you took away from this conversation with Jeff! Follow @SamirKaji and give your insight and questions using 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 a direct message on Twitter.

Podcast Production support provided by Agent Bee Agency

Using data to make better investment decisions is a common theme these days, but Nnamdi Okike, co-founder and managing partner of 645 Ventures, a firm that uses unique, data driven methodologies to improve sourcing while helping to eliminate the biases that often present themselves when assessing new opportunities. Using public data that to accompany their own automated systems, they’ve found an interesting way to consistently find undiscovered founders.

After leaving Insight Ventures, Nnamdi co-founded 645 Ventures in 2013 with Aaron Holiday, starting with a $8MM proof of concept fund. Since then, they raised a $40MM Fund 2, and most recently closed Fund III at $160M making them one of the largest underrepresented led managers in the United States. The fund focuses primarily on seed and series A and has a portfolio that includes companies such as Iterable, Goldbelly, Eden Health and Squire.

Prior to starting his career, Nnamdi got his bachelor’s, JD, and MBA from Harvard. 

Our wide ranging conversation covers: considerations when growing fund sizes dramatically, the power of using data driven approach to sourcing, and his lessons as a venture investor over the last decade.

In this episode we discuss the following topics:

01:12    Nnamdi’s journey into venture capital

03:37    The opportunity he saw to start 645

09:20    How and why they raised $8M for their first fund

12:27    Methodology around data that they use to decide on investing

16:32    How 645 Ventures weeds out bias in their methodology

20:58    The evolution of and growth of 645

26:27    Deciding to jumping up weight class in the ecosystem; the value they add

30:31    Using their connected network as a strategic advantage

32:48    The future of data in VC

34:06    His best advice to emerging managers

36:22    His biggest portfolio miss

40:31    What emerging managers should think about as they are starting

Mentioned In This Episode:

* 645 Ventures

* Insight Ventures

We’d love to know what you took away from this conversation with Nnamdi. Follow @SamirKaji and give your insight and questions using 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 a direct message on Twitter.

Podcast Production support provided by Agent Bee Agency

I’m extremely excited to bring you this week’s episode of Stephen DeBerry from Bronze investments. In addition to being an experienced investor at previous stops at Kapor Capital, Omidyar, The California Endowment, Stephen also developed the “Eastside” thesis which spoke to the inequities that are often present in eastern communities. He presented this thesis in a now viral TED Talk and was a factor in why Stephen decided to invest in change through Venture Capital at Bronze VC.

Stephen did his undergrad at UCLA and his masters work at Oxford. He is a British Marshall Scholar and Henry Crown Fellow at the Aspen Institute. He was on the Board of the Dalai Lama Foundation and Ebony Magazine and The Root/Washington Post named one of the 100 most powerful African-Americans in the United States.

We had a great conversation on social impact investing, GP commits, and why he feels strongly about helping the next generation of under represented managers.

In this episode we discuss the following topics:

01:25    Stephen’s journey into VC

06:25    How the Eastside thesis came to be

13:00    Why venture capital can solve certain social inequities

17:35    The difficulty he faced in his first fundraise

21:43    Advice to other non-traditional venture managers

29:02    How investing in non-traditional companies affects portfolio construction

33:00    Addressing the structural problems with the VC system

38:15    The problem with anchoring on GP commit as a measure of alignment

Mentioned In This Episode:

* Stephen’s TED Talk

We’d love to know what you took away from this conversation with Stephen! Follow @SamirKaji and give your insight and questions using 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 a direct message on Twitter.

Podcast Production support provided by Agent Bee Agency

Amplify Partners has quickly become one of the true breakouts from the early emerging manager movement. Led by Sunil Dhaliwal, who started Amplify nearly a decade ago after a 14 year tenure at Battery Ventures, the firm has over $750MM in AUM and has invested in companies such as Datadog and Fastly.

This was a fun wide ranging discussion about the current state of VC and where we think the industry is headed now that there are so many new emerging managers and potential LPS.

Prior to Amplify, Sunil invested in early-stage IT infrastructure companies at Battery and was named to the Forbes Midas List for 2011, which ranks the top 100 venture capitalists around the world. He was also named to the AlwaysOn Top 100 list of VCs and Business Insider’s 15 Most Powerful Venture Capitalists on the East Coast.

In this episode we discuss:

1:37    What he learned at Battery and why start a new firm

06:54    Decisions around Amplify’s fund one raise

10:59    How fund stages and sizes changes competition for deals

16:29    Moving between weight classes and the challenges around that

19:08    Competing at seed stage against large firms

21:26    How both Samir and Sunil underestimated the size of the venture market

22:19    Market forces disrupting early stage venture in 2021

24:24    Why certain things may never go back to the way they were 

30:01    How fear will change the VC market

35:45    The luck of timing; downturns are difficult yet provide opportunities

37:19    How LPs look at emerging managers and how to differentiate

40:22    Institutions and retail players bringing new money into early stage funding

Mentioned In This Episode:

* Amplify Partners

* Battery Ventures

We’d love to know what you took away from this conversation with Sunil! Follow @SamirKaji and give your insight and questions using 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 a direct message on Twitter.

Podcast Production support provided by Agent Bee Agency

Follow me @samirkaji for my ongoing thoughts on the private fund markets.

Over the last decade, we’ve seen a surge of VC firms formed by those that spent their entire lives as entrepreneurs. NFX is one of those firms, and in 2016, ex-Trulia founder Pete Flint joined the firm as fourth partner bringing the experience of starting a company, taking it public, before ultimately being acquired by Zillow for $2.5B.

This was a fun conversation, not only because of Pete’s insights and interesting background, but because of unique NFX is as a firm in the way they have built their firm, using operational experience, a community driven ethos, team composition, and software to help founders. The fund’s portfolio companies include Lyft, AngelList, and Doordash and has nearly $500MM in AUM.

In this episode we discuss the following topics:

01:29 Pete’s journey into venture capital

04:04 Why he chose to go with NFX instead of a more established firm

06:58 Execution vs. Ideas

10:38 The origin of NFX Guild

13:10 How NFX views venture fund differentiation

15:53 The way NFX uses software to help their firm and their portfolio companies

20:02 Scalingvalue as AUM and number of portfolio companies increase

22:24 Portfolio construction and founder engagement

24:32 What drove their increase in fund size

27:33 Where NFX fits in the ecosystem

28:13 Biotechnology and blockchain as a new areas of investment

30:58 The importance of ethos and culture at NFX

32:42 The biggest counter intuitive fact he’s learned as an investor

33:21 His biggest miss an investor

34:35 The main characteristic of a successful investor

Mentioned In This Episode:

* NFX Fund

* NFX Guild

We’d love to know what you took away from this conversation with Pete! Follow @SamirKaji and give your insight and questions using 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 a direct message on Twitter.

Podcast Production support provided by Agent Bee Agency

Limited partners come in a few different varieties, one of the largest, but also most opaque groups is that of the Family Offices, and today’s guest Jamie Rhode, CFA, Vice President at Verdis Investment Management, gives us a glimpse into the large family office world.

Verdis uses a unique data-driven approach to fund allocating that allows them to optimize on their portfolio and ensure they find the outliers.

Prior to Verdis, Jamie was at Bloomberg serving in roles roles in both equity research and credit analysis where she created, managed and leveraged an extensive library of financial and market data for buy and sell-side clients.

In this episode we discuss the following topics:

01:46    Jamie’s journey to Verdis and VC

03:08    How family offices are different from other LPs

04:14    The use of data and decision science and why they invest in seed stage

07:08    Finding the outlier startups and funds using data

08:44    How Jamie ensures diversity of investments

12:32    Life Sciences as an investment sector focus

16:29    Targeting networks that provide consistent outlier production

18:52    Qualitative measures for managers

21:54    Thoughts on reserve ratios, and why she prefers lower reserves.

24:43    The emergence of solo GPs

27:27     The importance brand and of long term goals when talking with LPs

30:39    Making sure their managers hit their minimum viable fund size at first close

33:26    Trends in seed over the next five years

37:08    Biggest learning as an LP

40:10    The common theme amongst successful funds

We’d love to know what you took away from this conversation with Jamie! Follow @SamirKaji and give your insight and questions using 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 a direct message on Twitter.

Podcast Production support provided by Agent Bee Agency

Contrarian based investing requires extreme conviction, and the ability to consistently invest in founders and businesses that don’t always have mainstream acceptance. Bullpen Capital has long been known as a firm that will not shy away from the overlooked companies, but instead seeks out the undiscovered gems to drive alpha for their investors and founders.

This week’s guest Paul Martino, one of the confounders of 2010 founded Bullpen Capital is one of favorite people to talk to given his unique insights and radical transparency.

Bullpen was founded in 2010 with Duncan Davidson and Richard Melmon, and was a pioneer in post-seed round funding—the gap between seed and A round. The fund has $383 AUM and invested in several success stories including Life360, FanDuel, and Ipsy, among many others.

Prior to Bullpen, Paul was an operator that founded eight companies and he holds over a dozen patents. He was an angel investor in companies like Zynga, TubeMogul, and uDemy. Paul is also a recognized expert on sports betting and gaming, appearing on CNBC and Fox Business regularly.

In this episode we discuss the following topics:

01:09    Paul’s journey from the operators side to venture

03:11    Seeing the post-seed gap in the market

05:06    Why fundraising for fund 3 was so tough

08:00    Being the only firm “dumb enough” to pursue post-seed

09:48    Looking for unloved and undiscovered companies

12:52    Getting LPs comfortable with their investing thesis

13:24    Why he loves backing underdog founders and why it’s been a successful strategy

14:25   How strong conviction gets deals done at Bullpen

16:33   Bullpen’s team approach in servicing companies

18:24    Keep a culture of contrarianism

20:21    The gap between boutique and larger funds

21:55    How Bullpen’s reserve model has evolved over time

23:42    SPACs have a certain parallel

27:29    Thoughts on emerging managers that will become institutional

29:57    The best advice he’s gotten as a VC

30:55    Paul’s anti portfolio

32:43 The investor he admires the most

Mentioned In This Episode:

* Bullpen Capital

* FanDuel

We’d love to know what you took away from this conversation with Paul! Follow @SamirKaji and give your insight and questions using 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 a direct message on Twitter.

Podcast Production support provided by Agent Bee Agency