Unconventional Approach to Startup Investment: Where Your Time Truly Matters!

Name: Unconventional Approach to Startup Investment: Where Your Time Truly Matters!
Uploaded: 2023-11-11T19:07:27+00:00
Duration: 14 s
Channel: Jason M. Lemkin
Description: In this informal conversation, two speakers discuss how venture capital partners should allocate their time across portfolio companies. They debate…

11 Nov 2023 · 0 min

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In this informal conversation, two speakers discuss how venture capital partners should allocate their time across portfolio companies. They debate whether focusing on high‑performing winners or struggling losers actually influences outcomes, concluding that mid‑tier companies may benefit most from VC attention. The dialogue also touches on the difficulty of identifying future winners early, the importance of founder loyalty, and how modest differences in company multiples (e.g., 0.5x vs 1x) can dramatically affect a fund’s carry and overall returns.

So this, I, it ties to how involved to be, like the 5x versus 1x, but I actually don't know if you can see it early enough to really have those impacts you described. A lot of people worry about just loyalty, quite right. How do you feel about that? Spend time with your winners, they're the ones that return the fund.
I mean, I don't know. I think it's like a little bit weird where like the winners don't really need you, so spending time with them doesn't really change the outcome. The losers don't really need you either because they're going to lose. So it's actually kind of the people in the middle that probably need you the most. You know, it's a really, spending time with those. Like, if you spend time with like Airbnb or not, I don't know. Also, I've never seen those ones actually fail if they're 100% committed and they have any customers, right?
And I actually think the difference between 0.5x and 1x can be huge if it's— if the fund's in carry mode. Like, you can make mil— you could also make mil— maybe you don't make $100 million, but let's not be gleeful.