Matt WamplerCEO & Co-Founder, ClearCOGS · CEO & Co-Founder, ClearCOGS 🔪

What It Really Takes to Succeed in Venture Capital

25 Jun 2025 · 2 min

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1:54

In this monologue, the speaker reflects on the difficulty of establishing credibility and financial viability when launching a venture capital fund, especially a small one. He recounts advice from his mentor, VC Todd Klein, who warned against raising a modest fund due to insufficient management fees to cover the extensive work required over a ten‑year horizon, including both investing and portfolio support. The speaker contrasts this with the experience of his former angel‑investing colleague, entrepreneur‑turned‑VC Brian Frank, who raised a very small fund (FTW Ventures 1) that took three to four years to close. Although the fund performed well enough to generate modest fees and allowed Frank to outsource back‑office tasks, he still had to underpay himself and rely on a management company until the first fund proved successful, after which he could raise a larger second fund and expand his team. The narrative underscores that even successful entrepreneurs must endure a long, arduous process to gain the credibility needed to raise subsequent, larger funds and sustain a VC operation.

Chapters

It's a long and tough process to gain that credibility, even if you're a successful entrepreneur where you really have the critical mass as a VC to theoretically make some good money down the road. One of our investors in our company was a VC, Todd Klein, who was a good friend and stayed a mentor for many years, talked me out of the idea of raising a small venture fund for very good reason. Small funds are very tough economically because the management fees are really not enough to cover the amount of work that's necessary for a 10-year successful run, not only investing but supporting the companies. My new best friend that I made back in my angel investing days was a Silicon Valley entrepreneur named Brian Frank, who had the exact same idea I did and went the other way and decided to raise a fund. And he raised a very small fund, which took about 3 or 4 years to close, FTW Ventures 1. And fortunately, it's done very well and it afforded him enough fees to underpay himself and have an accounting management company do some of the back office and not much else until he was able to, because he was successful with the first fund, raise a larger second fund. And that allowed him to bring in a couple of other great team members. But it's a long and tough process to gain that credibility, even if you're a successful entrepreneur. where you really have the critical mass as a VC to theoretically make some good money down the road, but also just to be able to afford to run your company. And so I watched how hard Brian had to work to close a first fund, make it successful, raise a second fund.