Ramtin Naimi

It used to be, I want to maintain an average entry valuation of sub 20 million.

That's become impossible.

I used to be able to do that, but I could no longer maintain an average entry valuation of sub 20 million.

Maybe my average entry valuation today I want to maintain is sub 30 million.

That means sometimes I'll do a deal at 15 posts because I found a deal that was off the beaten path and it's a pre-seed.

Maybe I took an early bet on people.

Sometimes I'll do a deal at 50 posts, but if I can maintain an average entry valuation of sub 30, it'll be nice.

If you start doing too many deals that are north of your 30, you start messing up your portfolio construction model because the more deals you do over 30, the less number of shots you have on goal.

Because if my goals have 60 companies per fund and suddenly my entry valuation starts to deviate from what I modeled in my portfolio construction model, then I start needing to consider myself, is investing in this company worth losing one shot on goal out of this fund?

That's kind of when you start thinking about price a little bit more discerningly.

And sometimes the answer is yes.

I'm just like, I want to invest in this company.

This company needs to be in the fund.

You kind of need to convince yourself that you like it twice as much as another company in your fund because you're shooting two bullets on one deal.

But once we've decided to invest in a company, price tends to be not something that dissuades us from investing in that company until it gets so egregious that you can no longer call it a seed deal.

That's basically our point of view.

Obviously, we try to get it to fit within the confines of our portfolio construction model.

But oftentimes, you have to deviate from that to get the company into your portfolio because ultimately, venture is an outlier's business.

You have no idea if the deal that you passed on due to price will be the outlier.

So you kind of just have to swallow the bullet sometimes.