One of my favorite comments about our Partner Fund portfolio came from a well-known VC at a high-flying fund. She noted that we get to work with “all the good people in venture.” I suppose people are the price of admission for our family. However, we can’t invest in “ALL the good people in venture.”
We plan to invest in roughly 30 total Partner Funds for our current portfolio. We’ve disclosed 15 of those and we have five more in various stages of closing right now. We’ve known some of the funds for years, while others came to us early in their life as they formed a team and strategy. There are another five that we’ve been working with and holding a spot for as they come back to market. That leaves us just a few slots for consideration over the next year.
We start with something we call the “good human” filter. We then look for those opportunities where their strengths match their strategy and fund size. The nuance of balancing these mostly qualitative characteristics is the hard part of getting our Partner Funds strategy right.
The explosion of fund formation over the last few years and our view into that expanding market has presented us with a wealth of opportunities far beyond our fund size and capacity. We decline quality funds multiple times a week where we know they are “our kind of people” and have a compelling strategy. We wish we could be more prolific, but in these cases we try to give some real feedback and be transparent in our process and decision making. We do our best to make time for good people and hope that we can provide support, if not capital to many of these.
Unfortunately, we have to say “No” far more often than we get to say “Yes”. It is part of being an investor and forces good discipline into the strategy we’ve designed for ourselves. However, we are certainly missing the opportunity to partner with some great firms and good people.
With so much negativity in the media around our industry, we are glad to see so many “good people” in venture.