Insightful, although I think this is one of the major problems with VC- at all investment stages. Up until recently, sourcing was an issue (too many new funds, not enough good deals). Now everyone is rebranding into autonomy/sovereignty/defense etc. Yes, Tier 1 VCs have the brand and talent pull to attract the best deals. But they also have the value-add ingredients to multiply their investment. In a nutshell, too many VCs are playing the brand/fundraising/sourcing game- and are incapable of managing a portfolio and generating a meaningful IRR multiple for their LPs. This also applies to PE- brand over returns hence the rise in continuation funds and liquidity crisis. 15 years in this industry- VC is not just about brand- it’s a host of other things including the capability to manage a portfolio, operations, growth etc- and this is the true gap today.
Agree, sourcing is only the first step of the funnel, and there is much more to venture investing than having a strong personal brand. Moreover, a strong brand can also come from doing the other steps incredibly well - if you go out of your way to support someone who is part of a tight-knit community (think YC for example), you can be sure they will talk about you and that will help your brand within that community.
This being said, sourcing is still the first step of the funnel, and without having a healthy top of the funnel there's not much you can do!
thinking out loud separates those who live and breathe their thesis from those who simply make slides
great and sharp insights. Thanks!
Insightful, although I think this is one of the major problems with VC- at all investment stages. Up until recently, sourcing was an issue (too many new funds, not enough good deals). Now everyone is rebranding into autonomy/sovereignty/defense etc. Yes, Tier 1 VCs have the brand and talent pull to attract the best deals. But they also have the value-add ingredients to multiply their investment. In a nutshell, too many VCs are playing the brand/fundraising/sourcing game- and are incapable of managing a portfolio and generating a meaningful IRR multiple for their LPs. This also applies to PE- brand over returns hence the rise in continuation funds and liquidity crisis. 15 years in this industry- VC is not just about brand- it’s a host of other things including the capability to manage a portfolio, operations, growth etc- and this is the true gap today.
Agree, sourcing is only the first step of the funnel, and there is much more to venture investing than having a strong personal brand. Moreover, a strong brand can also come from doing the other steps incredibly well - if you go out of your way to support someone who is part of a tight-knit community (think YC for example), you can be sure they will talk about you and that will help your brand within that community.
This being said, sourcing is still the first step of the funnel, and without having a healthy top of the funnel there's not much you can do!