Mark Goldberg
Appearances
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
I think one of the dirty secrets of multistage investing is that portfolio services teams are not for founders. They're for the VCs. They are a way to make something unscalable scale. So we have a very light reserve model. Peanut buttering all of your reserves in every pro rata round that gets done is not a good thing for the founder.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
And so we have a very light reserve model. We will double down on companies where there's exceptions, but we have a very light reserve model.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
So first off, we're going to be competing. We're going to be competing with everybody. And that's fine. I mean, this is an industry where you're both working with people on one deal and competing against them in the next. But we are certainly going to be competing tooth and nail in every deal that we're in. But we think that's a great thing for founders. Founders should have choice.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
I think you have to play the game on the field. And the question is, are there good companies that are emerging right now in this vintage? I would say yes. Now, are there ridiculous deals happening that I don't think fit the risk return profile for you or for me? Absolutely. But I think around that, there's plenty of work to do.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
One of the lessons I learned from Index Ventures and certainly two of my mentors, Mike Volpe, Ilya Fushman, was you want to be in the category winner. And when you need to pay up to be in a category winner, you don't want to be in the number two or the number three in a category. And there are times when I'm willing to take risk in that direction.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
Your risk is the valuation, but you feel extreme conviction in the leader in a category. That's in time when I'm willing to kind of stretch. The other time, Harry, just before you jump in, and really the way I think about early stage investing, is so much of a founder focus of, do I have insane conviction in this individual, in this founding team?
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
And when those variables line up, I tend to feel more confidence in my ability to kind of stretch on the deal price in terms.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
I don't mind competitive markets. I think so much about ideas are a dime a dozen. You want to find people that are excellent at execution and that have the vision to outcompete the folks in their market. I have never shied away from competitive markets. What I lean into is a founder who is willing to go head to head at a competitive market and I believe has the chutzpah to go win it.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
So for me, a competitive market validates the opportunity and is not something that I shy away from.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
To me, it's the founding team. I think that no company I've been a part of from the early days has been a straight line success. Everybody takes a punch in the face and the founders that have the grit to take the punch in the face and get back up are the ones that I think have the highest correlation of going from zero to one and ultimately from one to a public company.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
I think a lot about not, do they miss their OKR by 30%, you know, this quarter and therefore this isn't going to work? No, it's, is this somebody who's resilient enough to take the adversity to learn from it? And the velocity of their learning is ultimately what crosses the chasm.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
So I think he said that OKR, it was a great episode. And I think he was saying, why were they lifted from the manufacturing industry and plopped down into the software world? And I would very much agree with that.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
Post-product market fit, I think hiring is probably the biggest limitation I've seen. When you were an early stage company, this is where, you know, going back to our conversation on what is the value out of a VC, you know, again, do no harm should be beating 80% of the industry, but I wouldn't agree with your zero. So I think that at every stage, and when you feel the pull of product market fit,
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
you need to really consider who are the leaders of your functions, especially your go-to-market functions, and are they the right people? And when you move from founder-led sales into a professional organization, really asking yourself, do I have the right people in those seats?
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
And back to the point of what can a VC do to be helpful, showing people what great looks like, one, two, three stages in front of where they are, and giving them a way to evaluate where their team is relative to that, I think is a very helpful thing. And the folks that I've seen take longer to get from that one to 10, 10 to 100,
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
are the folks that tend to make the wrong decisions around hiring in their leadership teams. And by the way, I'm very bullish on their leaders. And I can give you examples that have scaled from the early days all the way to an exit. It's unusual, but it's possible.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
But I think having a way to give founders a sense of this is what great looks like for your stage and these functions that you might not have seen before is a very important thing for them.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
First-time founders. I think the ability to think from a clean slate to do potentially foolish, but on the other side, potentially visionary and transformative things, the hunger, the naivety that you described in a first-time founder, I think outweigh a lot of the benefits of having seen the show from one, two, three times in the past. There are caveats.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
I love founders that have tried and not broken through with a first business. So a founder who feels like they gave it a shot but ended in a place that they weren't happy with and they have a chip on their shoulder, I think is a great profile.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
A founder who has done so well that, you know, they are financially independent or they might not have the same level of hunger that they brought to the first business. I'm less excited about that.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
If they want an established brand that's been around for 30 to 50 years. Do you think that's still worthy? I think different founders want different things. You know, you and I talked about earlier in the conversation, a founder that is coming new to Silicon Valley that really wants the validation of an established fund that's been around, we're probably not a great fit for.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
I don't think it helps with customers. I think it helps with funding. You know, when Sequoia does a deal, there's going to be money that follows it. That's great. That's a feature of the brand equity they've built over a long period of time.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
I think we tapped a rich vein in the LP community that there was some frustration, especially at this point in the cycle, that some of the venture funds that they had invested in 10 years ago, 20 years ago, they felt like had become asset managers.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
And the idea of being able to invest in a pure play venture fund that had experience, but also a lot of hustle was something that we think resonated in the market. So I think we were fortunate that we kind of hit a market moment in the fundraise that aligned with a lot of the zeitgeist in that community. When did you start the raise? Like what type of time of year? We raised this summer.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
So we went out from kind of June to August was our fundraise.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
We were very fortunate. I think again, we were, you know, tapping into some real excitement about a team that I don't think there's a team of experienced GPs that's come together with three folks in quite some time. And I think that was something novel.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
And again, at a time where the macro backdrop was a little bit of frustration with how big some of the multistage funds, the legacy institutions have become. And this sense that the returns you saw 10, 15 years ago from small teams and focused partnerships may not be the same going forward.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
We wanted to keep enough diversity in the fund where we didn't get anybody, you know, kind of much over 10%. That was kind of where we adhered to. So we wanted about 20 LPs and that's pretty close to where we landed.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
No, we wanted good people. I feel like I have learned so much about being an investor from going through a fundraise.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
I mean, so many things. First off, I feel like every VC should have to fundraise just to be table stakes as a VC. And in some ways, I think my order of operation was wrong where I invested for almost a decade before becoming a founder. I wish though it would have been difficult to have done in the opposite direction, but some of the learnings.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
So first off, there was so much empathy from having to pitch. For a decade, I sat on one side of the table and heard the pitches and to be forced to feel the pressure of stepping into a room with everybody's eyes on you and you need to deliver is something everybody should do at some regular interval to kind of balance the equilibrium of power.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
And I think, I don't know if you felt the same way, Harry, when you were fundraising, but for me, I felt tremendous empathy for that. And I'll just give you an example. When you're pitching somebody, this is one of many meetings to them. And this is the most important meeting of your day. I mean, for me, there were a handful of meetings like that.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
And it's like, oh, well, as we know, it didn't hurt your ability to do something incredible with your own fundraise. And in some ways, I hope to give you a perspective. So when a founder is sweating in front of you, you have that empathy.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
And that's a lot of what I felt, the sense of, you know, oh, okay, this is a really helpful reminder of what it takes to really put yourself in the shoes of a founder. Did
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
That is a very good question. And I think that we met everybody in person. Now, because we're in San Francisco, a lot of people were coming through for different LP events. So there was a lot of kind of the community moving through. But we hustled too. We spent a lot of time on planes. And we, I mean, we were... We were out there. It was a quick fundraise, but we were out there hustling very hard.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
By the way, it's a great way to get to know your co-founders better. We're an equal partnership. All three of us were telling our story. It's kind of like a group interview. And poor Christina and Ethan, who had to suffer through me telling the same jokes and anecdotes over and over and over, sometimes eight, ten times a day.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
I don't know this.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
We did many, many tests throughout the relationship and the founding story of the three of us. The Tokyo test was not on there.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
Yeah. Now we divided and conquered. And the other thing is we tried to vet those meetings by first screening for the appetite for a first fund. There was, I think, a lot of interest in a shiny object to say, you know, I want to go meet this team. And we tried to weed that out by saying, you know, what are some first time funds you've done?
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
If you haven't done anything in the last two years, you're probably not going to be excited you know, about doing, doing things. So we did a lot of pre-screening, but we actually got to probably a hundred meetings.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
We were fortunate in that we were, we were pretty well oversubscribed. So it ended up being more, more than 20 yeses. And I think we could have raised a fund significantly larger than the one we raised. That said, we got a lot of no's as well. I mean, part of the LP community and understanding is what are they interested in? And
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
And if we walked into a meeting and they said, our belief in the asset class is that, you know, venture is no longer a good return or the only way to play venture is to be in, you know, five legacy brands. We probably had done a poor job in vetting that meeting. And there were a handful of those that we did not have success with.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
Well, it's an interesting parallel to why we say no as GPs. And again, to the empathy point, I think a lot of the reasons people gave as a no were not the actual reasons. But the biggest reason we heard was the three of you haven't worked together. And there's a lot of team risk in a new fund at this size with three people. And to their credit, there is risk.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
The biggest mistake is when you try to make consensus decisions at the early stage, I think you end up with consensus funds.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
I feel very comfortable with that risk. In the same way that a VC might say, it's too early for our fund. You never really know what people are thinking.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
We did. Yeah. And we got some great... I mean, again, back to the parallels of being a good LP is very similar to being a good GP. The funds that we most liked working with, whether or not they invested or not, were clear, direct, communicative, gave real feedback. It's a good lesson for me. It's a good lesson for anyone on the GP side.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
And again, why I would encourage anybody to go through a fundraise like we did. When we tell our friends, what are the best LPs? It wasn't the ones that necessarily all said yes to our fund. It was the ones that were great to work with. And they were great to work with for the reasons. They gave...
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
great feedback they were very sophisticated on their perspective in the market whether or not we aligned with that vision you know that was what made a great lp and i think ultimately what makes a great gp
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
We did have some funny stories from the fundraise itself. And at one point, I remember Christina was having what I thought was her best fundraising meeting. She's just, you know, really doing a nice job with her talking points. And I look over and she's, you know, laughing and having fun. I look over and it's nine o'clock in the morning.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
And instead of a seltzer water, we had, you know, we're borrowing somebody's office. She had grabbed a white claw instead. And so she's drinking her second White Claw thinking that she's drinking seltzer water. And, you know, we had a few things like that where, you know, you just kind of have to laugh in hindsight.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
And we had to tell her afterwards, you know, we didn't want to stop the train at that point, but we had to tell her she wasn't drinking, you know, something that was that was seltzer water. Mark, did you have any terrible ones? The terrible ones were more misalignment, I would say, where we would get into a meeting and someone would ask us to pitch venture capital as an asset class.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
We had one or two of those where it was like, why is this asset class still worth investing in? That was more, again, an alignment challenge where if you're starting from that question, we're probably not in the right conversation. And we did have a few of those.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
One of the best pieces of advice we got was build a diverse set of LPs and not in terms of the institutions you just described, fund to fund, family office, endowments and foundations, but people that think differently and think independently. And that's why I think we ended up with such an interesting mix of people that we almost didn't want people to correlate with one another.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
And I think it would have been very easy to do. And for people that go this route, where there's a lot of correlation between, hey, these are all alumni of the same institution. And so they're going to group things together. We wanted to avoid that. And I think we're very fortunate we were able to.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
So we had a few groups that told us this is going to be a six month process. You know, there's no way to accelerate it. And after the meeting, we're kind of done in two weeks. And we loved that kind of speed to conviction. And that meant a lot. Some of those early conviction checks where, you know, we weren't sure exactly how long the fundraise would take.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
And having a few people say, like, we believe so much in what you're doing. We're going to make exceptions to do this quickly and to get behind you.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
Well, this wasn't the most recent disagreement, but a really substantive disagreement was about whether or not to build a junior team at chemistry. Where did that net out? We are doing it, but I'll give you some of the color around it. So I came in with more perspective that we need to be extremely streamlined. You know, having a GP only group is going to be an advantage in terms of the ecosystem.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
I think Ethan and Christina had a much stronger feeling that working with a junior team is going to add an element and dynamic element in terms of different ages, different networks, that's really going to complement the GPs. What all of us were aligned in not wanting to recreate was the hierarchy and institution and bureaucracy of a really large organization.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
So what we netted out to is just a very small junior team. We're going to have two folks. We've hired one so far who's fantastic and already making a massive impact on the fund. But that was something we really needed to unpack and try to think about the pros and cons.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
Office, in office every day is a really important tenet of how we think about building. You know, we're a new team. We're a startup, right? Like we need to be shoulder to shoulder.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
Some of the folks that I respect immensely are the Excel Venture team, Dan Levine, Vasanth Rajan, some of the folks that I would describe as similar age to the three of us there, you know, that are doing a tremendous job in the ecosystem. There are some funds that I would consider new guard funds a little bit in front of us. I think Sarah Guo has done a tremendous job with Conviction.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
Jack Altman doing amazing things with AltCapital. It's probably the most dynamic moment in 20 years in venture, where you have these legacy institutions that are dealing with generational change, huge portfolios.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
Yeah, I think both can be true. I think there can both be a shakeout that is already happening in terms of the amount of dollars. And I think there can be a turnover between an old guard and a new guard. And I think you and some other funds I respect represent that next chapter and what a new guard. But I think there's a moment.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
And I don't think that moment existed three years ago, five years ago, even 10 years ago. And I think it's happening now.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
No, I'm not. First off, I think products will evolve to create liquidity for those late stage private companies that give liquidity options to early stage investors. So I think the market will evolve. So just because companies are staying private longer doesn't mean I think the liquidity duration will be as long as it is today. I think we'll see innovation in that area.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
So there'll be more secondary opportunities for early stage investors. I mean, my belief is the capital markets will create new products to solve for that. I do think that you need to have a long-term outlook in this industry. And even when I started fundraising, I thought the duration of a fund was 10 years.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
And I was surprised to learn that many of the LPs said we rarely see closed funds before 15 years. Just you have to have kind of the stomach to be in this for a long time.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
I was very fortunate to join the venture industry at the end of 2015, early 2016. And I'm very grateful to have been at a fund that did really well in those vintages and was able to get some liquidity. So I'm fortunate that I've seen that.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
It's a very what I would say is I don't think those funds will do very well. I mean, the vintage is going to be very, very challenged. Will it be a 1x? I don't know. I think it'll be better than a 1x. Maybe they're going to be tough funds.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
Well, I think we're already seeing some of the oxygen being sucked out of those companies. I think as you talk about your frustration with founders choosing to kind of raise at terms that feel unreasonable, I think we're seeing the other side of that, which is many companies wish that they'd taken a more graduated approach to their fundraising.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
Because the momentum, the cultural momentum, and I've got some companies that that have been very thoughtful in this and deliberate in this effort, the momentum you lose when a fund when the employees know that the valuation isn't realistic, I think really hurts the morale and hurts the ability of the company to kind of do its best work.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
So I think really deliberate founders that don't overstretch, actually, you know, you're kind of seeing the advantage of that, but everybody has to kind of go their own path. So
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
Yep. How's that working for you?
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
Are you seeing bigger or smaller numbers than you expected? Smaller. I mean, that's amazing.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
Yeah. I mean, I think it at least changes the tone of the conversation from one of this is a zero sum game where the valuation is a reflection of my self-worth and kind of a scoreboard win to one of let's put this in the perspective of a long term journey. So I think it's, you know, I think it's a really interesting framing you're giving the founders of let's think about this in a different way.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
No, of course. But it's a little bit of mental jujitsu, which I will think hard on.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
So I think we're already seeing the oxygen in this bubble start to get sucked out. Now, obviously, there are exceptions. There's still some extremely unreasonable deals happening within AI.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
I think that just calling yourself a .ai company is no longer tacking the same premium onto your business as it would have a year and a half ago. And the people that were the same camp of founders that were a .xyz during the crypto boom that have migrated to .ai for the AI boom are starting to recognize that they actually need a sustainable business.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
Harry, it's a total pleasure. And it has been so fun to watch you launch your new fund. I think I read online that it was a 10-year overnight success. And I think that's what most resonated with me. You've been doing such a good job crushing it. And I'm thrilled for you. So it's fun to be doing new funds at the same time.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
And that's what they're going to be evaluated on. Now, that doesn't mean that there aren't rounds happening at the red hot center of the AI infrastructure ecosystem. But I do think you're starting to see some pullback and some proportionality brought back into the other side of the market. It doesn't sound like you're seeing that by the way you looked at me.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
So we are a single trigger model, which means that any one of the three of us can make a decision on an investment and go with it. Now, the biggest mistake that I have seen from my own personal experience and from other funds is when you try to make consensus decisions at the early stage, I think you end up with consensus funds.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
And I think it's the errors of omissions at the early stage where one person or two people have super strong conviction in an idea that end up being the outliers. If you think about the outliers, you're going to get, you know, when you open the aperture, when you've got kind of the decision framework that I just described, you're going to get both. You're going to get deals that don't do as well.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
But I think you're also going to solve for the extremes that do very well. And that was the model that we landed on.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
Chime. I really love that business. From a fintech perspective, it was one where I would have loved to have been a part of the early stage rounds and kudos to the folks that figured that out earlier than I did.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
I think nobody has really cracked the product velocity that Revolut has. I mean, Revolut's product velocity is just unparalleled in really any market at this point, including NewBank. And you could argue the US is a harder market to differentiate on features, but Revolut has had a superpower. And
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
you know, they just move so quickly in terms of the breadth of products they're able to offer its customers. I don't think anybody's been able to match that in the US. That said, I think a lot of people get consumer finance wrong in the US and say, just because nobody has built a Revolut sized business means that it's not going to happen.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
Actually, the last time I was on your show, I think I predicted $100 billion neobank coming out of somewhere. And I think we're a lot closer. I think Revolut's the closest we're going to see to that. So
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
I would argue that there might be a company nobody's ever heard of yet that actually wins the mantle.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
I think lending businesses are very, very, very challenging. And if you look at the way that I've been comfortable investing in fintech, it's mostly been through the infrastructure that supports the growth of digital finance.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
To me, it's a very obvious answer. I would go all in on it. That would include lending as well. It gives me heartburn. But at the early stage, the stage I'm investing at, the stage that's core to chemistry, finding great people at this stage, they're going to iterate into something that's interesting. And again, please take the other side of it.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
You know, even in my partnership, you would hear Ethan's much more markets focused than I am. But for me, great founders figure out a way to create market. I mean, if you look at I was very fortunate to see some amazing companies from Index from the early days, whether it was a Figma, whether it was a Wiz, whether it was a Datadog.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
Companies that have been able to build TAM by just increasing the surface area of their products. That's the lesson I draw from some of those businesses that I've seen from the early days.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
Okay, so... It's funny. We just looked at a recruiting software company. So I'm just laughing about that. But what I would say is one of the dangers of experience and having done this for almost a decade now is shutting your brain off for a category that didn't work in the past.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
So I have a little bit of an allergic reaction when you say that, not because I disagree with you in any of those specifics, but in the sense of a trap that people fall into. And this happened in fintech. You look at the evolution of fintech.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
So in FinTech, the most knowledgeable people were a bunch of the East Coast funds that knew that had spent two decades inside of financial institutions and knew the market way better than the West Coast funds. And they outsmarted themselves from every money making deal in the category, the really, really big ones.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
And the West Coast funds that had the naivety to lean in, I think still did really, really well.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
What I would say is Matt Harris is probably the smartest and best FinTech investor out there. I mean, you know, Rivet's obviously incredible as well. But Matt Harris, I think, you know, has kind of set the direction of FinTech for a very long time. But what I would argue is like that knowledge can be counterproductive as well. If you know too much, because the crazy ideas are crazy, right?
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
Like you can outthink yourself from any good series A by overthinking. I've done it myself. I've seen other people do it. And I think knowing too much can actually be dangerous. So what industry are you like? Sales tools. The next AI for sales tools company. I have a very hard time, you know, keeping an open mind at this point.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
You mentioned at the beginning, listen, I know how well they're doing, but I just have a hard time seeing. I've just heard the pitch so many times. There's a lot of activity that I don't think is going to go anywhere there.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
My answer to that question has changed by fundraising myself. There were a lot of times where it was easier as a VC just to say something polite to not give people the real feedback. And having been on the other side of a fundraise and now felt the other direction, I think it's really helped me understand how useless that is and the importance of giving strong, constructive feedback.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
The world doesn't need another venture fund. It needs a new venture fund. There are too many VCs right now, but we wanted to do something different. What Christina, Ethan and I started talking about was if you were going to design a fund where you fully align the values of the investors with the founders, what would it look like?
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
That is such a good point because you can be wrong and right at a multistage fund. When you're doing what we're doing at Chemistry, you get one bite at the apple. And that is that's actually for what it's worth. That's a new muscle for me. But it's also really empowering.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
And it's one of the reasons I'm having so much fun right now, because it focuses you in a way that I had not done before, where the danger of the optionality of being able to do every stage at every time is you have to keep so many doors open. There is something that focuses the mind by saying, this is the stage we're doing. And this is the stage we are not doing.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
And therefore kind of giving yourself the kind of the test of conviction of where you are, and then being able to kind of adapt and change the operations around that. What will you break first or more willingly, check size or ownership? The check size. It kind of goes back to my sense of you have to be in the winners.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
And I think that when we feel like we are in a winner, I'm willing to move up on check size to be a part of those companies.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
I can't remember what legally we have as the concentration limit, but certainly we don't want more than 10% of the fund in a single company.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
Listen, if it's the right company, that's incredible. I would have a hard time sleeping at night with that sort of concentration. But I think that's- But if it was Airbnb, I'd probably- Then you're sleeping just great. But you're probably sleeping on a yacht in Saint-Tropez. So it's different. But I think having some sense of perspective.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
But listen, I think one of the advantages of being a new fund is taking a lot of risk. I think we are going to try a bunch of things that don't work. And I'm totally comfortable. I'm excited for that. Like we should be doing all sorts of things and seeing how do we push the innovation in this industry. And I think that's going to create a better founder experience, even when we get it wrong.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
So funny enough, we had some LPs say exactly the same advice, which was one of our more surprising moments from our fundraise, where some of the LPs said, it's that important that you're in some of these brand deals to be able to establish yourselves and don't be afraid to lean into that.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
We had LPs say exactly the opposite too, but it was interesting that even the LP community was, there are positive externalities from being in these, you know, these winners and you should be willing to kind of compromise to do that.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
That was kind of the question that was the jumping point to getting started here. And what we thought about is, first off, it would be smaller. It would be focused. It would be a combination of experienced investors from some of the biggest multisage platforms coming together, Avenger style, and seeing if you could do something different.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
The person I learned the most from has been Mike Volpe, just a tremendous mentor to me at Index Ventures and somebody I continue to call regularly for advice as I'm kind of navigating our new fund in the next chapter. What would you most like to change about the world of venture? I would change the groupthink. I think it's bad for founders.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
And I saw a great meme go around yesterday of a cheetah, an airplane, a rocket ship, and then the speed at which venture gossip moves between associates. And that resonated with me. I wish there was a little bit more independent thinking in the industry.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
I agree. I think you're totally right. I think companies need to be very cognizant of those dynamics.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
You know, really thinking about how I spend time and reorienting it 100% towards playing offense is a new skill for me right now after having been in a large... You think that's even possible, dude?
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
So you can't forever. You can when you have a clean slate from day one. So you don't have it forever, but I have it now. I feel like I'm running with a jetpack on my back right now. It is a tremendous feeling. And it's probably what you felt for your fun one before you'd made an investment.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
I mean, that's the level of energy and the juxtaposition from carrying a very heavy board load and portfolio load and going to that. So you're right. It's not infinitely scalable, but it's very exciting right now.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
Pick the fund? Oh, this is a good one.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
So growth, I would do Meritech. I think they're doing extremely interesting work right now.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
And they're constrained fund size for growth. And they're just doing some really interesting work. So I'm a huge fan of kind of the strategy and the people.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
It's a team of hitters. It's independent thinkers. They're going to have tremendous returns. And founders love working with them. So that's an obvious choice for me that there are some other great funds as well, including IVP. At the Series A, I think Accel Ventures continues to just do really interesting, innovative work.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
Very independent, very strong crew between Dan, Voss, Steve, a bunch of the other folks there, Amit. And there's so many good, interesting seed funds right now. I have a hard time giving you one off the cuff of my head. Come on. I'll tell you what though, we worked out of the Uncork office to start the fund and they're a fantastic institution.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
And you just talked about what it feels like to be an owner. I wanted that. Christina and Ethan wanted that. And we felt like the combination of experience and hustle was something that would be the blueprint for a new fund. So that was the origin of how we started talking about this.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
What's the most challenging thing about starting a new firm? It's hard building something from scratch. Here we are before this interview, I was trying to figure out how to get my microphone and lighting set up at a big fund. That would have been, there would have been a whole team helping me do that. It's both the fun part, it's also hard. And that's, I think, what makes it fun.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
Nobody has ever asked me that. That is such an interesting question. My gut reaction is to say the opposite, which is that the wealth level correlates with a lack of hustle. But that's actually not in practice what I've seen. I think there is a correlation less about the money and more about the people who are so good at this job that it's not actually the money is the afterthought.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
They love the job and they love doing this. And I don't know if it's the I don't give a shit anymore because I have so much money that I actually I'm not sure it's that I think there is to get to that level. There's such a love of the craft and of doing this job that they're probably pretty good at it.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
Harry, it's a total pleasure. Like I said from the beginning, congratulations again on your fund. Thank you for having me on the show. And thank you again.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
I don't necessarily think the fund size does. I think it's the purview of the responsibilities of the fund. So for us, having a stage focus, I think is very important. I've seen, I think, what the growth of different products and the size of a portfolio does to the focus of an investor.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
And I think there's a paradox at a lot of the larger legacy institutions where the most experienced VCs have the least amount of time to spend on new deals. And I think that's a problem for founders. And that was something that we thought a lot about as we were debating whether or not we were going to jump into this. And one of the things we thought we could help solve with chemistry.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
So absolutely, the longer you're in market, the portfolio is like an iceberg. It just grows. And especially in an environment like today where liquidity is not as readily available. That said, taking an axe to all the bureaucracy of a large institution gives you superpowers in terms of what you're able to do with your time.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
When you're running, I think... I think when you're running an organization that is hundreds of people, that is multinational, like many of the large funds are today, I think there's a lot of time spent on people management, on administrative work that has a tax on the organization.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
When I think the most important thing is spending time with founders and spending time with founders at the early stage.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
I would challenge the notion that when you talk about, for example, some of the portfolio services teams, I think one of the dirty secrets of multi-stage investing is is that portfolio services teams are not for founders, they're for the VCs. They are a way to make something unscalable scale.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
And I think right now we're starting to see the cracks of an industry that has relied on subdivisions of the job, whether it's a talent team or a team that's going out and finding customers. But I think what founders really want is not to be disintermediated between the relationship between an investor and the founder. That's really the premise of our fund.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
And one of the things that I think that some of the industry has gotten wrong. Now, I would also clarify, I don't think it started that way. I think the intention, and if you go back to the innovation from 10, 15 years ago, when Andreessen Horowitz started, it was a great idea. It was this sense of excitement and innovation for venture.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
But I think where we are now is it's become more of a crutch to these organizations to try to get leverage in an area that's very difficult to do.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
I think what founders really want is a direct relationship with an experienced investor.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
You can absolutely be spicy. You know, I think when we think about alignment, it's more about putting the incentives in terms of where you're spending time. One of the things that pulled us into starting a new fund And I bet you saw this as you were kind of going through your fundraisers as well, is this sense from founders that we want experienced investors that have time to spend with us.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
We want something new and fresh in the ecosystem. And I think that's a lot of what we're trying to bring here.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
Well, first off, I think that you would clear the bar for 80% of the industry by doing no harm. And I would agree with that principle. The other thing that I would agree with is that the later stages, that's all that matters. When you're doing it, when you're picking what growth investor you want to work with, what you should care about is the price and them staying out of your way.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
I would disagree with you at the early stages. And my experience over almost a decade of doing this is that there are times even the best founders who are running autonomously where and I actually there's a concept that we one of my great mentors, Mike Volpe, talked about magic moments for a founder journey.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
where it's not about placing the IC, employee 142, the resume in the right spot of the company. It's about building a relationship where when the founder is questioning, hey, I'm not sure if I'm working with my co-founder, and they want to call you at 11pm on a Saturday night, you pick up the phone and you're there for that person.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
And when that company does well, and they remember like, what were the important moments in my founder journey? I think those are the things they think about. So I would disagree with you at the early stages. I do think building that sort of trusted relationship is ultimately what makes an excellent investor. Though I would say a great investor might just be due to harm.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
When I joined Index Ventures almost a decade ago, the pitch that I would give to founders when I didn't have a brand or a portfolio was, I'm going to out-hustle anybody else. And I remember some early deals where I would be going head-to-head with the equivalent of Gil from 10 years ago. And the founder would say, why would I choose you? You're an associate. You have no experience.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
And I would say, that's my advantage. My advantage is that your success matters so much to me that if this doesn't work, I don't have a job anymore. And that pitch didn't always work. I lost a bunch of deals, but I won a bunch of deals as well because they're different products. That choice is good for founders.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
Our view with chemistry is that the idea of having a small team, clean slates, this playing offense at a moment where many people are distracted, It is a really interesting idea for founders that want that kind of relationship. And that's actually why we named the fund Chemistry.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
I agree with the framework, though I don't think it's the age. I think it's the relationship to kind of insider-outsider in Silicon Valley. If you're coming into the ecosystem and you don't really know a lot of venture, what you're thinking about is the big brands, the Andreessens, the Kleiner Perkins, the Sequoias, and you should.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
Those are the names that are household names that if you stopped a founder on the streets of Austin or Portland, those are what you're going to hear about. To me, it's less about the age and more about kind of the proximity to your kind of networks.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
Well, first off, that's really interesting for somebody who is leading one of the multi-stage, the most successful multi-stage funds. And God bless Sequoia. I mean, their ability to innovate as a leader. I don't envy that challenge. I have always enjoyed being a challenger and punching in that direction. So for him to say that is very interesting.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
So what I would say is I think the direction of the industry, and I'm sure everybody who observes the industry would say the same thing, has been one of industrialization in the last decade. And when I say industrialization, what I mean is the boutique experience of, hey, there's going to be a handful of partners. You're going to know everybody there and their reputations.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
That was kind of the past. And the future seems to be this sense of, you know, let's increase the AUM. Let's increase the team sizes. And I would challenge even you, Harry, to say at some of these big platforms, name more than three, four or five partners when there might be 30 check writers.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
So that's what industrialization means to me is when you know the name, the brand of the institution, but you might not know who the check writers are.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
That's exactly right. It's a contrarian thought right now. Inspired by funds like Benchmark, like USV, we think that there is this kind of personal relationship at the early stage that we're going to try to reconstitute the fund around.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
MARK BLYTHISON- It's seed in A. It's lead checks at seed in A. And it was really a bottoms-up exercise. We thought about what is the right pacing for each GP. And for us, when we looked at our investment history over the last 10 to 15 years, it was about two to three investments per year. There were years that in 2021, I did far more, which was the wrong decision at that point.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
But when we looked at what was the right number, it was about two or three investments per year. And that's how we built the fund, which is that's about the pace that each GP should have in the fund. It's about a three-year fund, and we'll have about 25 investments in each fund.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
So this will be a seed and series A fund. And I think when you say A, you have to be careful because when you say A, it's like, what does that mean?
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
It means you're going to need to raise a much larger fund. But even if you exclude the handful of billion dollar series A AI deals... I think I'm seeing deals in the market that are $30 to $40 million series A's. And I think one thing you have seen or I've observed in the industry is that A's that would have been $15 million five years ago could be $30 to $40 million today.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
So when you talk about us doing a 30, we could do that from our fund, but it would be a very big swing. What we're looking at is, I would say, a click in front of that. Where it's not totally obvious that there's a category winner, we are going to have to roll up our sleeves before there's obvious financial traction.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
There's more risk at that point, but we think we can do some earlier kind of series A's. So almost the concept of a series A, I would argue, is it depends what you're talking about.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
I think a $10 to $15 million lead series A check is a very reasonable thing if you're willing to go a click earlier in terms of stage.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry
So we have a very light reserve model that might be worth clicking on. I think that the way that, as a new fund, we think about reserves is we believe that supporting companies from those early stages is extremely important. But that peanut buttering all of your reserves in every pro rata round that gets done is not a good thing for either the founder or the LPs in a fund.