Pod Insights The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch 20VC: How to Raise a Venture Fund from Deck to First Meetings to Final Close, Why Venture is a Young Person's Game and Why Multi-Stage Funds Have Not Ruined Seed with Rob Go, Co-Founder @ Nextview About this episode Rob Go is a co-founder and Partner at NextView, one of the leading seed firms of the last decade with a portfolio including Attentive, Devoted Health, Whoop, and Grove Collaborative. Prior to co-founding NextView, Rob was an investor at Spark Capital and held product and product marketing roles at Ebay. He began his career as a consultant at The Parthenon Group. In Today's Episode with Rob Go We Discuss: 1. Entry into the World of Venture: How a cold call from a VC firm led to Rob entering the world of venture? Why does Rob believe venture is a young person's game? What does Rob know now that he wishes he had known when started in venture? 2. Preparing Docs for a Fundraise: What docs should fund managers have ready before they start the raise? How should they structure their data room? Where do the majority of LPs spend their time, document-wise? What are the single biggest mistakes emerging managers make preparing docs for a raise? 3. Meeting Your First LPs: What is the best way for emerging managers to meet LPs for the first time? Should they send the deck before or after the meeting? What questions should emerging managers ask to qualify LPs in or out of a meeting? What are some clear early signs that a first meeting went well? 4. Closing LPs: The Tips and Tricks: How important is it for a fund to have an anchor? How much of a fund should the anchor be? Are there different qualities of anchor LPs? Should managers ever sell part of their GP or give an LP part of the carry? What can managers do to enforce a sense of urgency to get LPs over the line? What are signs that an LP will not invest in the fund without rejecting you yet? Should emerging managers impose a minimum check size on new LPs?
Transcript 12,258 words · 3 speakers
Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
0:00 Speaker 00 The number one factor in whether an LP says yes or no is just timing. Are they expanding their program? Are they looking for whatever box or category they put you in? Do they have the bandwidth to be able to do it within the timeframe they're trying to raise the fund?
0:12 Harry Stebbings? This is 20 VC with me, Harry Stebbingson. Oh my gosh, I love doing the show today. This was so much fun to do. And for all emerging managers and any managers raising today, get your pen and paper out. This is a masterclass with Rob Goh, co-founder at NextView, one of the leading seed firms of the last decade, with a portfolio including the likes of Attentive, Devoted Health, Whoop and many more. And prior to co-founding NextView, Rob was an investor at Spark Capital and held product and product marketing roles at eBay. But before we dive into the show today, over 50% of your day is filled with tedious tasks. What would you do if you got that half a day back? Now you can with Coda, the all-in-one platform that changes the way your team works together. And Coda just introduced an AI-powered work assistant to take the busy out of work.
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3:19 Speaker 02 You have now arrived at your destination.
3:22 Harry Stebbings? Rob, it has been seven years since our last show. It shows that we've got incredible facial routines because we don't look a day older. But thank you so much for joining me today.
3:31 Speaker 00 It's an honor to be here. Thanks for having me back, Harry.
3:34 Harry Stebbings? Not at all. But before we do dive into the show, I love to start with some context. And so tell me, how did you make that first foray into the world of venture and come to found next for you?
3:43 Speaker 00 This is going to sound ridiculous. I got into venture because I got a cold call from a V C firm when I was in business school. And I got an email from a partner at Spark Capital because they were looking at the team with a digital media background. And at the time, everyone had a very narrow definition of what they were looking for. It was like top business school, worked at eBay, Google or Yahoo and lived in the local market. So went in for an interview and then proceeded to get tortured for six months before I finally got my offer. But that's how I got into the business.
4:10 Harry Stebbings? I love that. And then what was the founding of NextView? What was that? Ah huh. I can actually do this on my own with my own firm.
4:15 Speaker 00 It was a lot of naivete. I saw the rise of seed funds that were starting to happen. Baseline Harrison Metal, First Round Capital, were starting to have these models where they're investing specifically in seed stage companies. Most of the successful early-stage funds were getting bigger and bigger, and you saw the writing on the wall for some of those firms. And I figured there's going to be a seed-stage specialized fund that's not based in the Bay Area. You know, why not give it a shot? And so at the same time, my partners David and Lee, they were all thinking about the same thing. We decided somebody's going to take advantage of this opportunity, may as well be us.
4:46 Harry Stebbings? You've now been in the industry for close to a decade, over a decade? I have to ask, what do you know now that you wish you'd known when you entered?
4:54 Speaker 00 Venture is a young person's sport. Going in, we were very sensitive to the fact that we were inexperienced and we were young. We have this funny joke, actually, at NextView, where every time we raise a new fund, we get backpacks for each other. And the reason was, the first time we went into an LP pitch meeting, Lee and I showed up with backpacks, because that's what we used to travel. And our partner David was like, dude, you can't show up with backpacks. People already think we're young. And now we're going to like show up like school kids? Are you kidding me? And so we always remembered that. And so after we closed our first fund, Lee got a gift for the two of us, which were NextView logo backpacks. And since then, that's been the tradition. But I really believe venture is a young person's game. The amount of like energy and hustle that you're able to deploy as a young person is truly a competitive advantage.
5:39 Speaker 00 Like, there's a lot to learn from people who've been in the industry for a long time. But you can actually get that kind of knowledge if you're resourceful. And what you can't really replicate is the energy of youth.
5:49 Harry Stebbings? A funny story. When I was raising my first fund, I was in a restaurant in the US and they started serving wine. And then they looked at me and said, do you have an ID? And I said, I do, but it won't pass your test because I'm 20. And so, and then the endowment fund at the time was like, oh my god, he's 20. I want to start though, we're going to demystify a lot of the fundraising process today. I want to start on you. What's the fund size today? And why did you decide that was the optimal size? Let's start there.
6:18 Speaker 00 Yeah, so we're currently investing out of our fifth fund. In fact, we have two. We have a seed fund and we have a opportunity fund. The seed fund is 135 million, the opportunity fund is 65 million.
6:27 Harry Stebbings? Why those sizes?
6:29 Speaker 00 Our portfolio construction has been pretty consistent since we started the firm. We make roughly 30 core investments per year. We reserve roughly half the fund for follow-ons. And we have a sense for what the ideal average check size is for the stage that we invest in. And so today, we try to write checks between a million to $3 million into pre-seed and seed rounds. If you kind of do that math and multiply that out, that leads you to about 130, 100 to 40 million dollar fund.
6:53 Harry Stebbings? Okay, so you essentially have like 32 million dollar checks, which takes you to 60 million initial, 60 million for like subsequent and follow-on financing and then the investment fees. And then the opportunity fund, talk to me about that being 65.
7:05 Speaker 00 That was a little bit less precise. We have a sense of how many investments we think we ought to have in that fund. And that was actually with some guidance from our LPs in terms of the level of concentration that was appropriate. And then we thought through like realistically what our allocation levels might be for the things that were coming down the pipe, did some fuzzy math and landed at a number. We didn't want something that was too big. And the other thing that we thought about was the ratio between the seed fund and the opportunity fund. Because we stapled the two in our last fundraise, so all of our LPs were basically investing two to one from the seed fund to the opportunity fund. And we thought that that was fair because folks got to know us primarily as a seed fund. And so most of their money is in the seed fund, but we think we have access to these great opportunities downstream. And so having a third of their capital into those investments made sense to us.
7:49 Harry Stebbings? I have a couple of things, and we're friends, so I can just kind of go off the show. You know, you mentioned the reserves element now. Rob, I hate reserves because I don't think I'm not going to picker on trajectory. If I had picked on trajectory, I would have gone into a load of hyped companies. Bluntly, they would not have been good and sustainable investments. And so I actually prefer no reserves model. How do you think about like bluntly picking sustainable winners, not hyped companies? Just because they're faster to grow with trajectory?
8:15 Speaker 00 I have a couple of answers to this. One, I think we have a similar perspective because we think that our most important investment is actually the first investment. That's when we need to buy most of our ownership. And when I think about reserves, you know, we're doing pre-seed and seed and in this market, right? Sometimes you're making, taking a couple of bites of the apple. And so we want to make sure that we can support founders that we invest in really early with some additional capital to get them to Series A. So there's, there's a piece of it that's that. But for the most part, we're trying to buy our, our ownership upfront. This isn't really a strategy of let's sprinkle some dollars in the beginning and like pile in at the end. That's kind of one thought. We have a process internally in handling follow-on financings. We basically do a ranking of the portfolio every quarter from a perspective of where we want to deploy our follow-on capital.
8:56 Speaker 00 We do that because we want to make the decision apart from a financing opportunity, right? Because what ends up happening is when some fancy firm comes in, wants to lead a Series B, you convince yourself that this is the best opportunity in the world. But then if you look back and say like, well, a quarter ago, this was not necessarily a company that we were as bullish on. Like you got to make some really convincing argument why that makes sense. So that's one of the mechanisms we have to be able to do that.
9:19 Harry Stebbings? And how do you determine between reserves versus opportunity fund in terms of where the dollars come from?
9:24 Speaker 00 It's a little bit of a stage mismatch. The seed fund goes pretty heavy in the seed, usually does our pro rata or a little bit less than our pro rata than our Series A, and then kind of stops from there. The opportunity fund comes in at the B or C stage. So there's almost this like period where NextView is actually investing a little bit less than our capacity just to create a little bit of separation between the two funds. So it's not truly a barbell, but it's a little bit more like a barbell. Then if we raised one fund and just like followed on at every stage.
9:50 Harry Stebbings? I'm going to be a bit of a dick. I speak to a lot of LPs and they're always like, oh, we hate opportunity funds. Did they hate opportunity funds with you too?
9:59 Speaker 00 You know, when we raised, opportunity funds looked pretty darn good. Brief moment in time where the numbers were quite strong. So there was a lot less pushback. I think that LPs also liked the idea that most of their dollars were going into the seed fund, not the opportunity fund. I think there are other firms where the balance was different, right? It was like two to one the other way. LPs didn't love that. The third is there's an alternative, which is we could just raise a bigger fund overall. But I think everybody kind of loses in that case, right? Because, you know, it's harder to deploy that much money. The fees effectively are higher because our, our opportunity fund has somewhat discounted fees. And so I see this as kind of a win-win for everybody who's doing this.
10:34 Harry Stebbings? If we think back to Fund One, what was that size?
10:37 Speaker 00 Fund One was a $21 million fund. Weirdly, it was not that different, right? So still roughly 30 companies in the portfolio. Initial check sizes were lower, but seed rounds at that time, like a million dollars was a pretty big seed round. And so we were writing three to 400K checks and doing roughly 30 investments per fund and reserving some capital for follow-ons. So it kind of was the same.
10:58 Harry Stebbings? I miss those days, Rob.
11:00 Speaker 00 Weren't those good?
11:01 Harry Stebbings? And you could buy like 10% of a company in some cases for like 500K.
11:05 Speaker 00 I mean, ownership relative to fund size was quite nice. And out of a $21 billion fund, you didn't need that much to to move the needle.
11:11 Harry Stebbings? So we're going to go into the fundraising process today because there's like a lot of unknowns that I think need to be addressed. If we think about like chronologically speaking, we decide on this fund size that we just touched on. Now we need to do some docs. What docs did you prep for the raise? And how would you advise on preparation in terms of documents?
11:30 Speaker 00 Pick a really good law firm. They will help you set up basically the agreements with your partners, which I think is really, really important. Like this is sort of nothing to do with LPs. This is everything to do with like how you run the fund and how you how the management company operates. But then going to the actual fundraising documents, we basically had to deck a few spreadsheets that had our track record. I think we had a bunch of slides around like case studies and that sort of thing. But for the most part, we didn't have that much documentation. It was mostly focused around our deck.
11:56 Harry Stebbings? What do you advise founders going out today in terms of those materials that they have going on to raise from those first LPs?
12:03 Speaker 00 Yeah, so what I've found is most LPs care about deck, track record are the are the main two things that they care about. Everything else is just fodder for them to use as ammunition to sell into their investment committees. You think about like, what are the assets you have at your disposal, right? If you have a great media company that is powering the fund, you put tons of stuff about the media company, right? And tons of stats about that. If you have other assets that are, you're just supposed to put other things there that that matter for that purpose. But really, I think most LPs, they spend like 90% of the time on the deck and the track record, and that's all there is.
12:36 Harry Stebbings? I have to ask, you mentioned about kind of the agreement between your partners. It's a big sticking point for a lot of LPs. Do you have an equal partnership at Nevisview?
12:44 Speaker 00 We do have an equal partnership.
12:45 Harry Stebbings? And tell me, is that across carry and salary? Because sometimes you see differences there.
12:49 Speaker 00 That is carries and salary and ownership and governance.
12:52 Harry Stebbings? How important is that, having that equal split?
12:55 Speaker 00 For us, it has been really, really valuable and important. We're very aligned in our life goals and our career. And so it was kind of easy to be able to say like, hey, we're in this together, long term. And we felt like if it wasn't equal, there'd be too much of an incentive to renegotiate, depending on like how things are going in the fund. And thankfully, my partners have this long-term view around the downfalls of not having an equal partnership. And and we're willing to to structure it this way. And I was very happy to do that.
13:21 Harry Stebbings? So now we've got this kind of doc preparation stage. We've got the deck and got the track record. They look fantastic. Now it's time to go out and raise. Rob, do we want to get an anchor first and then get more friendlies around them? Or do we want friendlies and then anchor? What's that strategy?
13:35 Speaker 00 I think both are viable strategies. We tried the first and ended up doing the second. So typically, an anchor is usually an institution, usually somebody who has some strong relationship with you, who is willing to be the first, yes, write a meaningful check and you can build the rest of the the fund around them. That usually requires a pretty long process, usually to get the anchor over the finish line. But then, because that process was so robust, other institutions and folks who want to be a part of this, it makes it very easy for them to say yes. The other approach, which is what we ended up doing, was sort of a bottom-up strategy, right? It's a little bit more of a like lean startup of venture funds. You basically find the people who are willing to say yes and just trust you. You try to tally up as much as possible, preferably enough to do a minimum viable first close,
14:19 Speaker 00 close that capital, get into business and allow yourself time to be able to cultivate the slower-moving institutional LPs to come alongside you, hopefully by the end of the first fund. We ended up taking the second strategy.
14:31 Harry Stebbings? Why did the first not work for you?
14:33 Speaker 00 Because LP said no.
14:35 Harry Stebbings? Why did they say no?
14:36 Speaker 00 So we had a couple of LPs that showed very positive signs early on and we went down the process with them. And I don't exactly remember what happened. At some point, they just got some pushback and started to get cold feet. And we saw the Jenga towers start to crumble. It was easy to say no to us, right? We were new. We didn't have that much of a track record. It was a time when folks said, well, if you weren't in Silicon Valley, like, why bother doing venture? Venture returns generally were really, really bad. So like, it was easy to say no. They just like got cold feet and we were back to the drawing board.
15:06 Harry Stebbings? I'm super opinionated on this one. I think unless you have like an anchor who's like, you know, giving you money forcefully, go to your friends, use them for social validity, go for the big names, and with every friend, ask for three subsequent LP intros that they can make and put as a reference for themselves. Like, hey, I'm investing in Rob's fund. I love Rob. Meet X, Y, and Z. Then you build the flywheel. And actually, as you said, when you go to minimum viable, like first close, I find all LPs want is to know that you're actually in business. There's no risk of it not happening.
15:35 Speaker 00 That's the strategy I would recommend for most folks that are raising seed or early-stage funds. I think there's certain funds which is just not practical. And I have a friend who is raising a growth fund. It's just tough to do a minimum viable close. Or you do your first close, but you say, hey, you know, we might end up doing a slightly different strategy because what if we only close at like half or a third of our ultimate target, right? I think in those type of strategies, you kind of need to have a meaningful anchor or some really big dollars behind you to be able to feel good about closing the capital.
16:01 Harry Stebbings? So when you think about that anchor, one, do you have to have an anchor? Two, can they be 50% of your fund? What do you think about concentration of capital to the anchor? And are there different qualities of anchor?
16:13 Speaker 00 I actually don't mind concentration that much, especially for a small fund. You're gonna have concentration one way or the other.
16:18 Harry Stebbings? What's concentration? Is that 25%? Is that 50%? That 10?
16:22 Speaker 00 Some funds don't want an LP to be more than 10% or 15%. Like, we've had situations where we've had more than 20% of the fund with one LP. I think 50% is kind of extreme. I think it's probably unusual that an LP would be willing to do that without some special controls or economics. That I would recommend probably steering away from, for the most part. If you have an LP that's 20% of your fund, 25% of the fund, that's not ideal, but hopefully by the time you get to your next fund, you can start to dilute their influence.
16:47 Harry Stebbings? We're okay with concentration. Probably do need one. Are there different qualities in terms of the types? We've got corporates, family offices, endowments, foundations. Is there a snootiness and exclusivity of anchor of LP?
17:00 Speaker 00 I think there are some LPs that are more influential than others. So if you have a really fancy endowment or foundation, that tends to be a stronger signal for other LPs that want to come alongside them and essentially outsource the due diligence or help them feel better that, you know, they're not making a stupid mistake. But frankly, I actually don't care that much. You get the partners that you like. There was a time when folks used to say that like endowments and foundations are the most robust long-term partners that exist on the planet. It is just not true. I've heard so many cases where markets turn, things change, and the first ones to leave are the endowments. So it's hard to overthink it. What's more important is the individual who's there. You want somebody who is empowered, not at the very end of their career, because there's a risk that they're going to leave and then you're going to be adopted by somebody else.
17:43 Speaker 00 And somebody who's really committed to whatever it is you're doing, like whatever your strategy is, whatever segment of the market you're in. And as long as that person is still around, when you raise your next fund, I think you have a pretty good chance to get that firm back over the finish line. And it doesn't really matter what kind of institution they're in, as long as you have that kind of champion internally.
17:59 Harry Stebbings? So one, I totally agree with you, like multi-thread super early. It is a nightmare when you have a champion leave and then you're kind of the orphan child. Two, totally agree with you in terms of like not being as stable as you think with some of the biggest institutions. I would say it's worth really being snooty though for subsequent LP acquisition. I find when you get the Harvard, MIT, Stanford, instantly it just gives so much credibility to other LPs. For subsequent LP acquisition, it makes such a difference.
18:28 Speaker 00 There's also extra risk if they drop you, things that really, really hurt. So you better not lose them. We had a pretty influential institution drop us in our third fund. They did it the ninth hour. Most of the private equity team turned over and they just didn't give us the attention needed to make that concrete decision early on. That was a pretty devastating event for us. It goes both ways. Luckily, all of our existing LPs had the wherewithal to stick with us, everybody else. Some of which actually increased their allocation of the fund and we were able to get through it. But that experience is an important one, in my mind, because it made me realize that influence kind of goes both ways potentially.
19:04 Harry Stebbings? How did you respond?
19:05 Speaker 00 This was before our first close for that fund. We basically went back to all of our existing LPs who had committed and said, hey, here's what happened. The rationale, I actually think, made sense because that institution was so large and our fund was so small that it really didn't make that much sense for them to be in funds like us unless they had a dedicated strategy. And because they had turned over their leadership within the private equity and the CIO as well, they had just shifted the strategies. Thankfully, one of our other LPs that was going to be sort of a co-anchor in this fund was super rock steady. And I think that gave other LPs a lot of confidence that they could move forward. Shout out to Michael Kim at Sundana for helping us navigate that and being a really great partner.
19:43 Harry Stebbings? Yeah, Michael was the first ever LP meeting I ever had. In terms of like getting them over the line, that anchor, a lot of times the anchor says, hey, we'll do it, but we'd like to buy part of the GP or we'd like part of the carry, discount on fees. How do you think about concessions to get the anchor over the line?
20:02 Speaker 00 I wouldn't do it. I think it's a sign of strength not to take that deal. It's not very typical in venture. And so if you're talking to an LP that's very used to anchoring hedge funds, like they're more likely to ask for this. But I think for the most part, it is to your benefit to show some strength and say no to that. And especially with our first one, I remember every other LP asked, well, do any of the early folks in the first close have special economics, special governance? And everyone was relieved when you say no. And so you think about like the long game here, you really don't want to get stuck with somebody who has extra power within your organization unless you really believe they're a long-term partner. But I think that's very rarely the case. And I think there's a question of like, what did you do this for, right? Most people who start funds, many people came from funds or, you know, could be doing other things.
20:47 Speaker 00 Like the reason you did this probably is to have independence and control and do what you want to do. And so once you have somebody who has, you know, additional governance, you kind of start to seed some of that. We actually had a situation where shortly after our busted anchor, you know, situation, we had a couple billionaires, whose name I won't share, who basically said, we kind of like what you're doing. We were thinking about starting a fund two. Why don't we just like merge? We'll create our own. Own firm, we'll raise like a couple hundred million bucks for you guys. We'll just do it together. We had a couple of conversations about this and it was very enticing, right? It was like get into business. These were very high profile, you know, entrepreneurs and investors. You know, this was a time when like a couple hundred million dollar early stage seed fund was like unheard of.
21:32 Speaker 00 We were like, man, we can like get into the game in a big way. I remember my partner, David, was very decisive about this. He was like, you know, if you guys want to do this, you should do it. I'm not going to be part of it. Because the reason I left my job to start a firm was because I wanted to do things my way with you guys. And that matters a lot to me. And if we take this offer, we're just going to be employees. Like, don't listen to anything they say or what they promise. We are going to be employees. I do not want that. That was a very decisive conversation and he really convinced us that we need to go our own path.
22:05 Harry Stebbings? When we reflect though on like the meeting processes itself, for Fund One, how many meetings did you have?
22:11 Speaker 00 Must have been hundreds. We like stopped counting.
22:13 Harry Stebbings? You had hundreds. How did you get in touch with them? What was that entry point for that relationship?
22:18 Speaker 00 Thankfully, we had been in venture for a few years and so we had relationships with GPs. And our firms and other firms were willing to to make introductions to us. What I found actually very useful though was not necessarily our closest relationships as much as other funds that were sort of like us that had raised recently. And it was just amazing, Harry, how generous people were in sharing their insights in the process, their lead list, giving us background intel on everybody who they spoke to. I remember one person always sticks in my mind. There were, there were a few, but Bryce Roberts, who was doing OATV at the time, I barely really knew him. I remember him sharing me his entire spreadsheet and talking me through every single LP and saying like, here's how they think. And I didn't understand like half of the words he was saying.
23:02 Speaker 00 And he just like was so gracious and was able to explain to me what the situation was, how we should be thinking about it in our process and can't think of enough for that generosity early on.
23:12 Harry Stebbings? So I've made many LP insurers for Bryce. It's funny you said that. And the reason I do and I do actively for other early-stage managers is because when you find a great manager, they're going to raise with or without your help. You get brownie points for helping them. And then you get brownie points from the LP for providing great leads. It's like a net win-win to do it.
23:33 Speaker 00 At the time, I thought that folks would be very protective about LP relationships. You don't realize that a lot of the market has this win-win perception. I got to tell you though, some firms don't. I think it's a little bit of a scarcity mindset. And I would argue that this is a little bit of the function of the time. Part of why the Boston venture market at the time was not thriving the way the West Coast market was, is there's a little bit of a scarcity mindset here, a little bit more of a protective attitude towards everything. Which frankly, was part of why we started, wanted to start a fund, right? We wanted to buck that trend. And I actually think that many of the funds that exist today don't behave that way. There are certain ecosystems where I think that that is definitely the case.
24:10 Harry Stebbings? When we think about those LP insurers that we have, did you send them the deck, the track record beforehand? There's often a question of whether to send before or after.
24:19 Speaker 00 You can go either way. I actually don't think it's a bad thing to send the deck. It's like, people want the information, just give it to them. Sometimes we'll send like a pretty detailed blurb so that there is some enticing information, but we don't have everything. I actually don't mind that because I think part of your job is to qualify and to try to manage your time well. And so having an obvious next step that is out there is kind of helpful for that qualification process. But I don't know, for the most part, I think sending a deck's not the worst thing.
24:44 Harry Stebbings? I agree with you. I prefer the more detailed blurb. I find that people find a reason to say no in the deck quite often ahead of time. But you mentioned qualification there. I do want to touch on that because I think there's questions that managers can ask to qualify LPs early in the call or the meeting. What questions do you think managers can and should ask to better do LP qualification?
25:04 Speaker 00 Yeah, this is something that I didn't realize when we started the first fund. The number one factor in whether an LP says yes or no is just timing. Are they expanding their program? Are they looking for whatever box or category they put you in? Do they have the bandwidth to be able to do it within the timeframe they're trying to raise a fund? Like, those are the main factors. And so you want to try to figure out what the answer is to those questions. So LPs usually will share, like, what percentage of their portfolio is private equity or venture? You want to get a sense for, like, is that growing or shrinking? You want to get a sense of, has this LP invested in something that looks like you? And what is their general strategy around that category of product, right? Because within venture, presumably if you're raising a first fund, you fit into some small bucket, right? So when we started, it was institutional seed funds, not in the Bay Area. A few years ago, it would be crypto.
25:49 Speaker 00 Most LPs hopefully have some strategy of, like, we want to have X number of managers that look like you. We've invested in two or three of them, and so we have another four or five to go, right? Like, whatever the numbers are. Trying to get that that feel, I think, is really, really valuable. And whatever questions it takes to to answer that, I think, is is what you're looking for.
26:07 Harry Stebbings? I always ask about geography. I find if you're the first in the new geography, it's probably very unlikely. I always ask, like, on check size, like you said there about the ones that are massive checks. Like, they're at $25 million checks and you're raising a 30, 40 million fund? Pretty much qualified out straight away. I do check size geography, existing portfolio for them. What was the best ever LP meeting you had?
26:28 Speaker 00 Actually, the LP meetings I most enjoy are ones that focus a lot on the human beings, the nature of the team dynamic, the why behind what we do, the touchy-feely meetings. There is a class of LPs, I think a lot of folks who have this approach have a heritage at Yale. So I really enjoy those meetings. Another meeting I remember was with Horsley Bridge. They're not LPs in our fund. But I remember actually a follow-up where we were talking about portfolio construction. And one of the folks there said, the best portfolio construction in the world is to invest in one company and put all your money into the first round and be right. And every derivative from that basically is allowing for uncertainty and risk. And I always kind of remembered that.
27:13 Speaker 00 I kind of enjoyed their, like, probing, taking ideas to an extreme, just to stretch your thinking, because I felt like I learned something from that. And obviously, that's not what anybody does, but I kind of appreciated that point of view. And it changed the way that I sometimes think about portfolio construction myself.
27:27 Harry Stebbings? What was the worst LP meeting you've had?
27:29 Speaker 00 The worst LP meetings are just when it's clear the person doesn't want to be there. We actually very rarely have those meetings now and for the most part, it's because we don't fight that hard to get a meeting. Like in the beginning, I was like, oh, I just need to get in the room and if we can get in the room, we can convince somebody that they want us. If somebody doesn't want you, they don't want you. And I'm not that great of a salesperson. So like, it does me no good to walk in to somebody who's already like leaning way back. Like life's too short. There's other opportunities out there. And so I would almost say like, you want to scrape and fight really hard to get great introductions. But if somebody doesn't want to take a meeting, like there's not that much value in like forcing it.
28:06 Harry Stebbings? If we think about that post-meeting process, though, we have that meeting, we have that call. What's the right subsequent follow-up? What do we send them? When do we send it? What do you advise there?
28:16 Speaker 00 Mark Suster had a post years ago and one of the takeaways was to paraphrase, like always leave something more. Always leave something out so that there's some reason to have a follow-up. That's sort of why a blurb is kind of nice because then it gives you the opportunity to follow up with the deck. So with one of our fundraises, we had a data room. For the first time, we actually had a data room. And we were so liberal about saying like, well, here's the data room. Have a look. We have since changed that. We do have a data room, but the data room is a preliminary data room and it is intentionally incomplete. And the reason it's intentionally incomplete is if we offer the data room, I want to know they looked at it, which you can, like a lot of times there's tracking for these things. But then if they actually like prosecuted it, it'll be obvious there's some other stuff that they would want to see.
28:59 Speaker 00 And so we have like a subsequent data room that we offer for folks who actually dig in and care to care to look at it. So I like having these kind of gates that are out there just to assess whether or not LPs are serious. And it's sort of like a video game, right? Like let them go on quests and you know, pass the level and move on to the next one.
29:16 Harry Stebbings? I totally agree with you. So let's talk about the next level. You send them the deck, you send them the follow-up, something, the data room. They don't respond. What do you do then?
29:24 Speaker 00 I have a basic belief that it never hurts to ask twice, but I never ask three times, right? So if there's an email that doesn't get responded to, I don't feel bad about asking again. After I'm ignored twice, that's okay. I just move on. That doesn't necessarily mean they're dead, by the way. It's just that I'm not going out of my way to proactively seek them out. But fundraising processes are long. You never know, right? You might see them at a conference in three months from now and they'll be like, oh yeah, you know, the times have changed, like let's have a follow up and like, that's fine. I, I, they're not dead to me. I'm just not gonna to proactively reach out anymore. So that's my general rule.
29:57 Harry Stebbings? I remember there was one with my first fund and it was, I, I, fuck it, an LP's of mine, the insurance provider. And they didn't respond after a great first meeting. Every single Monday for fifty weeks, I emailed them. Weeks, which shows they took a year to raise a fucking fund. And then on the fifty first week, they responded, sorry, been slammed, love to engage. And you're like, really?
30:22 Speaker 00 And what'd you do with that?
30:23 Harry Stebbings? And so we followed up and we're like, we would love to engage too. Yes, please. You know, we only sent fifty fucking emails to get this one. But so I totally agree with you, but I think, yeah, there is a certain time when you probably should stop.
30:34 Speaker 00 It seems like you've had maybe a different experience where, because if you've sent fifty emails, that means for somebody else who sent ten emails and it did work. So do you actually think that the two email rule is not correct?
30:45 Harry Stebbings? Oh yeah, a hundred percent. No, you're technically right, but the cost of it is so little. Like just checking in, one of our portfolio companies just raised a huge up round by Sequoia. It's very low. Actually, the cost is low and the benefit is high. So fuck it, keep going. And I'm always more and more humorous with everyone. So I'm like, Rob, you probably think I'm as persistent as your, you know, wife or husband, and I am, I'm worse. So if you wanna get rid of me, it's much easier than divorce. Just let me know. And then they're like, ha, ha, ha, great.
31:16 Speaker 00 Actually, I really like that approach, right? The thing not to do is the, do you wanna take a next step? Do you wanna take a meeting? Asking for something without offering something, I think that is really hopeless.
31:26 Harry Stebbings? Or the entitlement element. I think it's really bad that you haven't responded, blah, blah, blah. It's not bad they haven't responded. They just don't like you in a lot of cases. I think that. And then the other thing I think is like invest in lines, not dots. So I meet two new LPs every single week when I'm not fundraising. At the end of each meeting, I ask for two new LP intros. They make them. So I have a flywheel of four new LPs per week. I'm not fundraising. And then every quarter, when I send out my quarterly update, I send it to them. Rob, I hope you and the family are well. I hope Boston's great this time of year. Personal copy, like personal bit at the beginning and then copy and paste with the, they love it. The lines not dots going to your sister comment and building that relationship over time works so well.
32:08 Speaker 00 I agree with that. So I would say, when I say, don't ask twice, I would not be shy about sharing good news, but I certainly wouldn't ask without offering something over and over again.
32:19 Harry Stebbings? You're not going to share bad news, are you? Oh, my partner left and I hate him. Ah.
32:23 Speaker 00 Yeah, no.
32:23 Harry Stebbings? That would be too funny. Tell me that. The hard thing is like just creating a sense of urgency, even in ones that do respond. So how do you advise managers on getting people over the line and what works and what doesn't?
32:34 Speaker 00 Tricky thing about this business is, you know, where most LPs have the incentive to be the second to last yes. Because it's not like you have that much benefit in being, or any benefit in being the first yes to, to a fund. So I have a couple of thoughts here. I think for a first fund, there is no shame in closing a very small amount, as long as your strategy can support it. I always remind people, like Lira's first fund was a seven million dollar fund. And they're pretty well-known folks in the industry. So I think there's something about like, just do a close. And then that allows you to like, have a very concrete timeline of like, what a final close looks like. Once you're done and you're in business, just do what you need to do. And then you can create more urgency in your next fund when you have more demand and more points on the board.
33:16 Speaker 00 I also think that there's some LPs that pride themselves in being in a first close, some fund of funds, some endowments. It's meaningful to them that they're known for being the first yes. And so you can basically use a close date as a forcing function. If clearly that's not going to work, then, then at least you know they're not really serious, or at least they're not serious within that timeframe. But I don't know, like, what have you done, Harry?
33:35 Harry Stebbings? Well, I think it's really important on the timeline basis to set a timeline that's not too short where it forces them to a no, but where it's short enough where actually they need to do the work fast, but they actually have time. So I always say fourteen to twenty-one days. Actually, if someone's gonna do it, fourteen to twenty-one days gives you time to shit or get off the can, as we say in the UK. I don't think that's arrogant. It's not unreasonable. A couple of weeks to internalize. They can say subsequently, hey, that's our decision and then we need to approve with IC. Fine, but actually we need to have some form of declarative decision within fourteen days because we do have allocations that are filling up. I think it also shows confidence and progression by doing that.
34:12 Speaker 00 Yeah, I think that's right. I think that as you get further along in the fund, it's easier to be able to say, hey, you know, our last one is X size, new fund is this size. Most of our LPs wanna do, you know, wanna increase their allocation. We probably have room for one or two more LPs and we're trying to be very selective about who that looks like. We think that we'd love to work with you, but here's our timeline and try to figure out if they can meet that.
34:33 Harry Stebbings? They should never be surprised by your timeline on subsequent funds. Like, I've built the relationship with many LPs that I want in subsequent funds ahead of time. They know exactly when they're coming, so they're pre-sold to plan for that internally. I think that's really important. You've got to think about their planning cycles and their deployment cycles. Because otherwise, if you're like, hey, Rob, I'm raising, oh shit, I kind of did like you, but now we're a little bit up shit creek.
34:55 Speaker 00 Yeah, that's a great point. So typically, if I think about like our timing, if we're looking to do a first close in, say, Q1 of a given year, we are probably giving pretty clear indication of where our timeframe is, at least like eighteen, if not twenty-four months before that. And then we remind people, hey, like, this is what we said, you probably don't remember, here it is again. Some LPs are very good at keeping track of this kind of thing. Some folks tend to forget, and so we just remind folks. And like you said, it's not a surprise when the time comes that you're looking to close at a certain time. And I think LPs actually kind of, even those who pay attention, they appreciate the consistency of how you've operated, right? So knowing that you're a fund that is delivering on exactly what they said,
35:37 Speaker 00 they're hitting the timeline that they projected to you earlier is like very reassuring. Because a lot of the existing managers don't do that, right? So, you know, when the markets were hot, what LPs always said was like, oh my God, so and so fund has come back like a year or two years ahead of expected and it's throwing off our entire planning strategy. Like, there's actually something comforting in knowing that you're operating as predictably, if not more predictably, than their existing portfolio and you're great to work with from that standpoint.
36:02 Harry Stebbings? I I think also going to your point there on kind of calendars, it's really important to know that there are strategically better times of year to raise for certain institutions. A lot of endowment funds get fresh buckets of allocation in the start of any year. And so Q1 is actually optimal. Q3 is probably the worst and actually end of Q4, when they might have like a spare little stipend left, can actually be the best as well. But I think knowing that there's like strategic moments of best capital availability is important.
36:31 Speaker 00 Yeah, I wonder if that's going to change though, because I feel like what you've described, I feel like maybe everybody's figured out. And so I noticed that everybody basically starts their fundraise at the latter half of the year so that they can target a beginning of the year close unless they catch somebody who has end of year allocation. That is the most logical timing, captured the large part of the market. But then I hear everybody's doing that. So I don't know if there's a way to zig when others is zagging. Probably not, but yeah, that's something I've been thinking about actually.
36:58 Harry Stebbings? I just have a problem with that though, too, because it just shows this like strategic manipulation of relationships aligned to fundraisers. And it's like, I've been speaking to 30 LPs who are not in my fund. Honestly, Rob, because they're also really fricking smart and I learned from them on the point. So there's no like, oh, I'm going to engage with them again with Q1 in mind. I'm kind of chatting to them on a weekly quarterly basis on WhatsApp anyway. And I think that's what managers need more of, which is just the natural relationships. Whereas, oh, meet my friend, Rob, he's raising now and he's great. I'm not raising.
37:30 Speaker 00 I think there's some GPs though, they don't have the constitution of always fundraising. I feel like this is true for founders too. There's some founders who are just so great at always having investor conversations and other founders that are just not good at that, right? And they're better off like running a concentrated process, simultaneous process in in big bursts. And so I think to some degree, like that's sort of the same for GPs too. Some folks are very, very good at keeping a lot of LP relationships and LP cultivation going. And I think some are just not as good at that.
37:59 Harry Stebbings? How much in terms of like LP check size, a lot of people I meet have minimums and it really pisses me off. Because I think that they're very dangerous. Some of my best LP instructions, founder instructions have come from 25K chats from heads of product. How do you advise on minimum LP check sizes?
38:16 Speaker 00 I would say for individuals, I'm usually pretty loose. For institutions, we try to enforce some sort of a minimum, but the minimum's typically pretty low. Because, like you said, sometimes you get great introductions from LPs. Sometimes it's our model to start really small, but they can actually upsize quite considerably. Like, we've certainly seen that in our portfolio. I try not to be too snooty about that. I generally am a believer in like building an anti-fragile LP base. Like, even though I said earlier, I really, I don't mind concentration. I also don't mind a lot of small checks, if you can handle it from a timing standpoint. A bunch of small checks is very, very anti-fragile. I'm not too snooty about that sort of thing. Like, as long as folks are good to deal with and they're not like a huge time sink, I'm, I'm happy to engage.
38:56 Harry Stebbings? Can I ask you on like different types of LP knowledge there? Did you find that one type of LP converted better for you than the others in terms of corporate fund of funds, you know, but?
39:07 Speaker 00 Different types of LPs convert better at different times in your life cycle. So fund of funds are in the business of one of two things. They're either in the business of access, get whatever institution into these fancy names, and so they're very focused on brand. The other job of a fund of funds sometimes is to execute on a particular strategy and get folks into something new. And so if you fit the category of like the new thing in a new category, some fund of funds are really, really great at converting. Weirdly, when you're in the middle, you're neither new nor are you so well-known that you have like a great brand, fund of funds are not as good. What I found is that like funds two to three, it's actually harder to get a new fund of funds engaged because you're neither of the two.
39:47 Speaker 00 There are some groups that are very, very large LPs and they just want stability. They will never invest in a fund one or a fund two, but they love the idea of investing in a fund three, four, five, a plot or, or more with a team that's been together for a long time, that's executed the same strategy for a long time, that, you know, just has shown that great level of stability and like, that's what they want, right? I think pension funds tend to like that. I think some endowments like that, and I think they tend to convert great towards the, the middle, later stages of, of the fund cycle.
40:17 Harry Stebbings? Where would you say you are? Your fund five, but respect is not Sequoia of forty years or K P. Where are you in terms of that fund lifecycle, would you say?
40:27 Speaker 00 I would say that we are not the new product, but we have a lot of stability. We don't have the biggest brand, but our track record is pretty strong. LPs that don't care so much about the brand, that like smaller managers and believe in early stage and kind of like a no frills, less flash, but great performance kind of partner that they can trust for a long period of time tend to like next year.
40:50 Harry Stebbings? Who is the new thing?
40:51 Speaker 00 Well, it was crypto. That's not the case anymore. Probably if you're an AI specific fund that can very credibly tell a differentiated story. That could be a new, new thing, although it's so crowded, perhaps not.
41:04 Harry Stebbings? Can I ask you, in terms of like management of the process, how tightly should it be managed? I don't find emerging managers managed them well at all, bluntly. How tightly should it be managed?
41:13 Speaker 00 I think you want to be organized, especially the first couple of times you do this. I think you want to be very organized, but don't try to manage it too tightly. Because you actually don't know enough to be able to manage it like a fine oiled machine. And you have to allow for some serendipity. I'm like a little zen about this kind of thing. Like I try to stick to my timelines. I try to be very transparent with our LPs. I always say that if you're not for us this time, maybe next time. And who knows, when I started, I had so much urgency around like, we need to hit this date. We need to close this amount by this amount of time, like trying to jam people into a framework. And now I'm just much more laissez faire about it. We had one experience with one of our funds where we closed most of it, frankly, right before the lockdown happened with COVID.
41:54 Speaker 00 And we were like, we've hit our target. Should we just like stop fundraising and just like focus on on investing? I was like, yes, but you never know what might happen. Nine months later, one LP that frankly is a relationship I've cultivated since since Fund One, decided to come in at the very, very end. It was a hundred percent about their own timing. Were they ready to say yes to us early on? No, like literally it was like, I sent an email and I think they either ignored me or they said no, like just just by the email. And then nine months later, they were ready. Because I chatted with them in Fund One, like they had the sense that they tracked us for a long, long time and they were ready to to say yes to us. And so I was like, okay, great. This is this is going to work. So I'm much more relaxed.
42:33 Harry Stebbings? What was the easiest fund to raise and what was the hardest fund to raise?
42:37 Speaker 00 The last fund was the easiest to raise. So that was the fifth fund.
42:39 Harry Stebbings? And that was because of DPI and cash back?
42:41 Speaker 00 Yeah, it was a DPI story.
42:43 Harry Stebbings? Yeah, DPI story. And then the hardest?
42:45 Speaker 00 The hardest was the first fund because we didn't know what we were doing.
42:48 Harry Stebbings? Other than the first, which was the hardest?
42:50 Speaker 00 Probably the third fund.
42:52 Harry Stebbings? Why do you think that is?
42:53 Speaker 00 Because we lost an LP.
42:54 Harry Stebbings? Can I ask a final one? I just didn't touch on the market. Is there anything you know about fundraising now that you wish you'd known at the start? I'm sure there's many things, but like, what do you wish most?
43:04 Speaker 00 Like I said, I've become so much more zen about this. In their first fund, every time someone said no, I took it personally and I felt like it was a waste of time. Now, looking back, it is amazing. Like this one LP that I mentioned, it's actually our biggest LP now. This is the one that I talked to them in fund one. They didn't actually engage very much, but they always took a meeting or two and then passed. And then I think fund three or fund four, they didn't even take a meeting. And then fund five, they came in. And I was like, how much of a waste of time was that? Not much, right? It was like a handful of meetings over the course of however many years, some email updates. And they're great partners with us and they're a pretty large LP for us. And if that has kind of changed my thinking, we're like, you just don't know. People are in the business of meeting managers, you're in the business of meeting LPs, and you just don't know how relationships are going to evolve.
43:48 Speaker 00 People are going to go to different platforms and at a new platform, maybe you become a really great fit for them when they weren't before. So just like allow serendipity to happen and do your job and I feel like things will work out.
43:57 Harry Stebbings? I think mine is just be human. You know, we started this call with me asking you advice on, you know, children and relationships and managing life. When you get on an LP call, you put on a shirt and tie and get the deck up ready. They're just the same as you. Why didn't you ask them those questions and actually build a real relationship?
44:15 Speaker 00 Totally. That's why you bring backpacks.
44:17 Harry Stebbings? That's, that's why you bring backpacks. Maybe a couple of final ones before we do a quick fire. Now, I have this theory, well, not theory, but many people have said on the show before that multi-stage funds have destroyed seed. They've turned the bloodbath with five million on twenty five million seed rounds. Do you agree and is seed harder than ever now?
44:34 Speaker 00 I think the degree of difficulty is relatively high. I don't think that it will persist. Because at some point, the multi-stage funds will say, hey, it's not really worth our time and effort to invest at this stage. And they'll turn their attention to later stage rounds where you write bigger checks again. But for now, it's pretty difficult. But there have been other times where it's been difficult as well. And when we started, seed was a cottage industry. It wasn't that, it was a lot easier. Today it's harder, but we didn't get into this to do something easy.
44:59 Harry Stebbings? Do you not think seed pricing is immune to macro cycles? When you look at it, I think it will just continuously stay actually at very high levels because of all the multi-stage funds moving earlier.
45:09 Speaker 00 I think it's a bifurcated market. Prices are very high for certain types of companies. But if you're contrarian, there are a lot of companies that don't get any love as well. I also think that part of the complaint is that seed funds are looking for what effectively used to be a series A investment. And I say like, why don't you do a pre-seed? Because pre-seeds are still pretty cheap, especially if it's not a super proven founder. By the way, like when we started, we were doing seed, seed rounds and there were cases where it was a very, very proven founder. They would skip the seed stage altogether and raise a series A. I feel like that's kind of the same thing that's happening today. It's just the labels are different.
45:38 Harry Stebbings? If you come out of a Figma, a Stripe, a Notion, you don't raise the 500K to a million pre-seed round.
45:44 Speaker 00 Yeah, you never know. I, I don't know if that's necessarily true.
45:46 Harry Stebbings? Do you see them?
45:47 Speaker 00 Yeah, we see them. I spoke to a founder yesterday who had been part of a company that had a very successful exit, then joined a unicorn company before it was unicorn, led growth. And he did a pre-seed and it was pretty reasonably priced, like the seed will probably be pretty expensive, but the pre-seed wasn't bad.
46:01 Harry Stebbings? What do you see today in the seed market that you think not enough people are talking about or spending enough time on?
46:08 Speaker 00 Related to your last question, I think there's actually a lot of opportunity out there for non-consensus thinking. I think there are a lot of companies that aren't getting very much love because they're not AI. The teams aren't fancy founders that came from well-known companies that are just having a really tough time raising. And I think that there's going to be many diamonds in the rock that come out of that. I think there's a lot of like doom and gloom and like disgruntled chatter amongst seed investors right now. And I'm like, there are a lot of companies out there. Go ahead and do it. And by the way, if the founders are really that great, like just go ahead and pay a higher price. Like that's okay too.
46:40 Harry Stebbings? I've just put down a term sheet for a series A to lead it. And I think the price was half what it would be last year, but I just think the capital supply is not there for an enterprise software company in London.
46:50 Speaker 00 Right. No, I saw that tweet, right? It's like a good old fashioned enterprise software, series A with good metrics that isn't doing AI or not pretending to do AI like. That's great.
46:58 Harry Stebbings? And everyone's like, AI is gonna kill it. You're like, really? It's not. This is so ugly. Trust me, it's not that easy, guys. Listen, I want to do a quick fire round, Rob. So I say a short statement. Okay, so if you were to invest in one seed firm other than the next few, what would it be and why?
47:14 Speaker 00 It would be in DVC. So this is Bryce's Fund. They have a completely different model focused on a completely underserved, different segment of the early-stage market with a unique investment product. That's like different on four or five dimensions with a great guy, and I can't wait to invest in this one.
47:30 Harry Stebbings? He just is such a good person. I'm totally with you. If you were to invest in a Series A firm, who would it be and why?
47:35 Speaker 00 It would be Benchmark. Persistent success over time, successful generational transition, quite disciplined, amazing brand, great people, hard to beat.
47:44 Harry Stebbings? If you were to invest in a growth firm, which would it be?
47:47 Speaker 00 I would probably say Summit Partners. They're the OG of the classic growth cold-calling machine. Like, they invented that model. They execute it like nobody else. If I could, I would specifically invest in their smaller fund. They have a bunch of different funds. I think they have a small four or five hundred million dollar classic growth fund. That's probably what I would do.
48:04 Harry Stebbings? What have you changed your mind on in the last 12 months?
48:07 Speaker 00 I was skeptical of AI. I am like all in on it.
48:10 Harry Stebbings? What like what caused the change?
48:12 Speaker 00 I see something happening in AI that's very similar to the early days of the internet. There are teams that I see that are clearly trying to become AI-native, and that doesn't necessarily mean that you're like an ML researcher or have a PhD in the space. It's just that you are like approaching building every software product with the expectation that AI and AI-driven tools can massively create efficiencies or to enable new capabilities. And there are other teams that are just like, ah, this is probably the next new fab. I don't know, I'm gonna put it aside. This is very similar to the internet, right? Or or cloud. Like, there was a time when like you would talk to a founder and you just knew, like, is this person like an internet native? Is this person just like native to the types of products and tools that are out there and available to them or not? I kind of see the same dynamic happening, and it's not that every company would invest in an AI company,
48:57 Speaker 00 but every team we invest in, I'd like them to be very, very AI-native.
49:01 Harry Stebbings? What's your biggest miss and how did it change your mindset?
49:04 Speaker 00 My biggest miss was DraftKings. I was actually Jason Robbins' teaching assistant in college. I knew he was special. He walked into our offices to pitch DraftKings along with two other extraordinary co-founders. We passed not because of like regulation, but because we misunderstood the market size. And ever since then, I've been very careful to not say no to an investment just because of market size, without thinking very deeply about whether or not we're misunderstanding the market, misdefining it, or just underestimating the growth that's on the other end.
49:37 Harry Stebbings? What's the biggest hit and how did that change your mindset?
49:40 Speaker 00 One of our biggest hits is Attentive, and we invested in an uncapped note. And that changed my mind because we never would have done it before. It's not like we're looking to do uncapped notes left and right, but it made me realize you just want to get into the best companies. In a power law business, you just want to get into the best companies.
49:59 Harry Stebbings? What would you most like to change about the world of venture?
50:01 Speaker 00 I think venture is very one size fits all. Even though there are a lot of different managers, a lot of different funds, there's just like so much similarity in the ways that they approach it. That's why I love what Bryce is doing with Indy. Like, it's completely different of so many vectors. When I got into venture, I remember there was this very hard and fast rule about like you have to own 20% as a venture fund. One of Union Square's big innovations was they were willing to own 15%. And I remember people were poo-pooing them for own 15%. I'm like, why is that wrong? There's just so much one size fits all in venture. I would love that to change around like the types of people who get into it, the types of companies that can raise venture, the type of economics maybe that could allow different types of companies to work. I don't know. I think in a lot of different ways, we're not thinking creatively enough.
50:43 Harry Stebbings? Tell me, next five years for you and for NextView, what does that look like when we challenge 2028?
50:48 Speaker 00 My vision and our team's vision is for NextView to be, I think of Benchmark and YPO had a baby and focused on seed. That's what I'd love NextView to be. From on the Benchmark side, it's a very partner-driven model, equal partnership, a lot of stability, best-in-class, best-in-class investor, very concentrated model. YPO, an ethos of
51:11 Speaker 00 Founder vulnerabilities support communal excellence. Folks are able to have lifelong relationships that they think is one of the most important things in their lives. Like, I would love that to be what founders say about being part of the next portfolio. So if we can marry those two things, I would love that.
51:25 Harry Stebbings? Rob, I've so enjoyed this. This has been such a great discussion. Thank you for putting up with my very vocal interview style this time around, but I've loved it, man.
51:33 Speaker 00 Awesome. I really appreciate it. Thanks so much, Harry, for having me.
51:38 Harry Stebbings? So much fun in that episode with Rob. And if you'd like to see more from us behind the scenes, of course you can on YouTube by searching for 20VC, that's 2-0-V-C. But before we leave you today, over 50% of your day is filled with tedious tasks. What would you do if you got that half a day back? Now you can with Coda, the all-in-one platform that changes the way your team works together. And Coda just introduced an AI-powered work assistant to take the busy out of work. With Coda, your team's important workflows and content already live all in one place. And Coda AI helps each team member focus on the highest priority work, even as priorities shift across the team. Now, by taking over recurring tedious work,
52:18 Harry Stebbings? Coda AI empowers team members to prioritize longer-term and really strategic work to accomplish goals. Coda AI not only makes space for collaboration in each person's workday, but it can make it easier to stay in the loop and share informed opinions. Get started with Coda AI today for free by heading over to coda.io/20vc, that's coda.io/20vc, and get started for free. And speaking of tools we cannot live without like Coda, we have to talk about Brex, the all-in-one financial stack trusted by founders. Founders have to think globally in order to open new markets, unlock cost savings, and gain access to new talent. That's why having the right financial stack is more important than ever. And that's why Brex comes in.
53:03 Harry Stebbings? With Brex, you get a high-limit corporate card, a high-yield business account, with up to $6 million in FDIC protection and bill pay, all built with a global-first mindset. Brex enables you to operate in more countries and currencies than any other provider, so you can pay vendors, run payroll, and make international payments faster. We all know that's a must have for startups at any stage of growth. So are you ready to learn more about Brex's global first solution? Visit brex.com/20vc, that's B R E X dot com slash 20 vc. And finally, Angel List is fast becoming the centre of the venture ecosystem. The startup world is just buzzing about how fast they've been shipping products that meaningfully improve the lives of both startups and fund managers and their investors.
53:47 Harry Stebbings? For startups, Angel List reduces the friction of camp table management, banking and fundraising all in one place. Teams can focus on scaling and let Angel List handle the rest. Thousands of startups have moved their camp tables to Angel List in the past year. Angel List also supports large venture funds and their teams with an automated, software-first approach and the best customer service in the industry. Fund managers can focus on making great deals while Angel List handles reporting, taxes, compliance and more. So if you're ready to scale your startup or fund with the platform at the centre of it all, visit angellist.com/20vc to get started. As always, I so appreciate all your support and I cannot wait to bring you an incredible episode on Monday with Akin at Triple Dot.
Previous 20Growth: How to Master PR and Comms, How to Get Your Startup Written About; Press Releases, Fundraising Announcements, Embargos etc & Lessons Scaling Duolingo from 3-200M Users with Gina Gotthilf, Co-Founder @ Latitud Next 20VC: Eight Pieces of Startup Advice that are BS: Why You Do Not Have to Love Your Space, It Is Ok To Do It For The Money, Focus Is Not Everything, Speed Is Not The Most Important Thing with Akin Babayigit, Co-Founder @ Tripledot Studios Page updated October 25, 2026 · transcript and summary are machine-generated
