Finding Peak w/ Ryan Hanley
200 Rejections to a Billion-Dollar Exit: Larry Cheng on Resilience and Growth
10 Dec 2025
Chapter 1: What is the main topic discussed in this episode?
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My philosophy is you try and turn the long maybes into a quick no. That saves you time. Every firm has a fit. It's the type of deal that's in their comfort zone. You want to assess whether you're a good fit. You could spend two months and it's not a good fit at the end. So I try and make it easy for people to turn me down. We might not be the right stage. We might not be the right sector.
Maybe we don't have enough proof points. Let me tell you all the reasons you can turn me down. I will not take it personally. Try and encourage the no, and that will save you time because...
Chapter 2: How did Larry Cheng overcome 200 rejections in fundraising?
The place that I wanted to start with you is actually a tweet that I found from a few weeks ago. It's just something that intrigued me and I was wondering where it came from. You said, just a thought this morning, a personal philosophy applicable to selling, fundraising, et cetera. Don't take no's personally. Don't take yeses for granted. I love just, I think you're dialed on that.
And just interesting where that came from and kind of how that applies to both the businesses you run and the businesses inside your portfolio.
Yeah, so let's go there. When we started Volition Capital, we're a private equity firm specifically focused on growth, and we had to raise a fund. And a fund is made up of different investors, very institutional, like university endowments, big charitable foundations, wealthy family offices, and so forth. And when we first started this firm in 2010, it was two years post-financial crisis.
No one wanted to invest in a new emerging firm. They wanted to even cut their allocations to this asset class and only stick with the firms that they knew. And I put my head down. I talked to 200 different investors, and they didn't even say no to me. Most of them ghosted me. And in my world, the investors are called limited partners, LPs.
And the reason they ghost you is because they want to see if you can raise your fund to get close to your target, and then they can come in at the finish line. And I didn't take any of those turndowns or ghostings personally, because honestly, I understood. We are a new firm. There are reasons to not invest with us. It's a long-term commitment. It's like a marriage.
And I didn't take it personally. And somewhere in like 200 to 210, someone actually committed. And that started the ball rolling. And we got a few more investors. And we ultimately raised our first fund. And our first investment out of that fund was Chewy, which became the leading pet food e-commerce business, which I'm sure we'll talk about, a multi-billion dollar exit.
And we've been off to the races the last 15 years. And so now we're sitting here where we are 15 years later. I still don't take turndowns personally because there are going to be times when certain investors, they can't invest or it's not the right fit, and that's a-okay. And we certainly don't take for granted any investor who wants to invest in us because we know how hard it is the first time.
And so you always treat your LPs, your investors well. You care about what their needs are. You're transparent with them and all that good stuff. And so that's always been my philosophy. I thought it applied even just to selling in anything. It seems like a healthy philosophy to go after it with.
Yeah, I completely agree. So 200 meetings before you got your first yes. I mean, even if you logically have this, you know, don't take no's personally, like I might say detach from the outcome, you know, whatever, whatever way you phrase it, right?
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Chapter 3: What is Larry Cheng's fundraising philosophy?
On the side, I was trading penny stocks. And I was trying to make a buck. And I put all this money into this penny stock that was doing broadband wireless. And I had convinced half the firm, my consulting firm, to invest in this stock. It was called Cellular Vision USA. I still remember it. And it turned out to be a total bust. But what I realized is I like the scorecard of investing.
I was an athlete. You like to win or lose. You know if you're right or wrong. I think that's fun. It motivates me. So that was fun. I liked tech. I liked innovation. So that was fun. And that got me into investing. And I started Venture Capital at Bessemer Venture Partners. And I haven't stopped having fun ever since. It's been 27 years.
I work with phenomenal entrepreneurs every single day and it's a lot of fun.
Yeah, I'm with you. Like my hobby outside of what I do, and it's more than a hobby because obviously you're playing with money, is I want... I still love looking at the pink sheets.
Like I still love, I, uh, I, um, there's, uh, uh, uh, I won't say the company, but there's a psilocybin company in Toronto that I caught at like 30 cents right before, right when the first research started coming out that a psilocybin could be really good for PTSD and particularly soldiers. And I was like, you know what? Like, I've had a really good experience with psilocybin.
Like, you know, my own experimentation, we'll call it, or supplementation, maybe. So it doesn't sound like I'm using it just to get high. And I was like, there really is something to this, right? I had had very positive results. So I was like, screw it. Threw like a couple thousand bucks in, you know what I mean? Like, again, they're all just like Powerball tickets anyway.
So, you know, and then this thing goes from like 30 cents to nine bucks. And you're like- Holy, you know what I mean? This was probably like 10 years ago, like right at the very beginning of this move, but it's intoxicating. But like you said, there's 10X the losers, right?
So, you know, one of the things that I've always been really interested in philosophically, you hear this a lot with VCs, I think with venture firms and stuff, it's maybe a little less, but it's, we're gonna place 20 bets and hope one of them goes big. Cause we figured the other 15 of them are gonna go to zero. Four will be maybe get our money back. And then one we have.
So when you're like, I'm really interested in that philosophy, right? Because every bet, and just taking this kind of arbitrary example of 20 companies or whatever, right, portfolio. Obviously when you're going in, you must believe that each company has the potential to be that Grand Slam winner, but you know they're not. How do you sort through those and work through?
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Chapter 4: What are the differences between venture capital and growth equity?
Like when you're when you're sitting on a board and, you know, I've never sat on the board of a public company. So, you know, this is experience that I don't have. I'm very interested. Like and you see like.
you see that kind of like your stock price, everyone looks at a company basically if you're, you know, and I'd say particularly amateur or unsophisticated investors, and they basically just look at price and they look at how much they're willing to spend on something and they put this arbitrary value on it, right?
When you're sitting there as a board member and you really understand how these market dynamics work and you watch something like, you know, some price manipulation happening, which is what was happening, right? I mean, they were, people were driving the price up and, you know, obviously it came back down.
But how do you handle that as a public company and managing what's happening with a stock price and having to hit quarterly earnings and all that kind of stuff versus the private company world where... you're not necessarily on that time clock if you're able to pay your bills, right? As long as you're not running out of money, you're not necessarily on a clock.
Like with a publicly traded company, you have to do quarterly earnings reports, you have people pushing price up, pushing down, shorts, you know, all these different things that you have to deal with. Like, how do you manage the value of the company and just what are some of the things you have to consider public versus private?
Yeah, I appreciate the connection between the two because I live in the private company world and I'm on a couple public company boards, GameStop and Grove. And I think I bring that private company mentality into it, which is I don't worry about the day-to-day movements of the stock price.
And I actually don't look to Optimized for a quarterly earnings report because our job is to build the business for the long-term. and make those decisions that set the business on a great foundation to grow profitably in the long run. And that's what we do. So if there's volatility between here and there, it's not even occupying my mind, to be honest.
It's really about just making the right decisions for the business over the long run.
Awesome. All right. Well, I want to transition into what you're seeing in the market today because I have a bunch of questions from where you sit and what you think about. First, first, I want to go to crypto. Right. In general, is this a space you follow? And to like, obviously, we've seen a big move down. Bitcoin actually was it's kind of bounced back up a little bit. But as of last week.
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