Start, Bench, or Cut: Which Emerging Manager Archetype Do You Want on Your Team?

Alexa Benz

Welcome to Swimming with Alligators, the VC. Podcast from the LP perspective with your. Hosts Alexa Benz and Ernest Sweat. You ready? Let's dive in on this week's episode of Swimming with Allocators.

You have your hosts Alexa Benz and me, Ernest Sweat, for a special DDQ episode. This is our second one. And so to kind of level set for those that are not fund managers, something that you will have to go through if you ever do raise any type of fund from institutional investors is you'll have to answer all of these ddqs, which are due diligence questions, and so they can be very, very long and arduous. And it's a beast. It keeps getting longer.

Yeah, everyone we talk to, they say they keep getting longer. And so we wanted to have a kind of fun play on something that all fund managers and allocators have to deal with. So we're calling these the DDQ episodes. D number one, we discuss what we've been hearing from LP's. D.

Ernest Sweat

Number two, we debate some of the things that Ernest and I. Have. Been learning, our own point of view, and then we answer some of their audience questions. So should you have any questions you want us to answer on the next DDQ, shoot them to us on social.

Alexa Benz

So first, discuss. These are themes that we're hearing from allocators, both from the episodes that you have heard from things that maybe we heard off the record or episodes you haven't heard yet. So Alexa, what's the first theme that you've been hearing from the allocators? Yeah, I think a common one is that your next fund is going to primarily be made up from your existing LP's. I think for gps in firm building mode, that's, that's pretty rough news to hear.

Ernest Sweat

But I do think there are some easy ways to mitigate this. A maybe extreme example Jason Calacanis just recorded with us, you'll hear him next week, and he described fund one for him was 10 million, fund two was eleven. And he's out in market right now raising 100 million. And he's told us if he were to do it again or going forward, he's going to be focusing on annual rolling $10 million funds. If you are a first time fund manager, you're getting ready to go out for fun, too.

Those were probably friends, family founders backing you. And because they're not institutional LP's, they aren't necessarily familiar with the re up process. They may not even know that's something they have an opportunity to do or an expectation. So I think it's on you as the fund manager to be educating your less professional LP's and really embracing those smaller LP's to bring them along to fund, too. That's, that kind of ties into what I've been hearing, and it's being more prepared when meeting LP's for the first time and understanding the long term relationship path that you're going on.

Absolutely. And so, you know, we've heard this from a number of allocators, and not to kind of plug our show, I think one of the great things that we're offering on our platform is an opportunity for you to have that first meeting, really kind of intro meeting. We've all been there where we're meeting with founders or allocators, and we're slotted for 30 minutes, but about 20 minutes is taken up by both sides doing intros. We're taking away some of that for you. And we've actually heard from fund managers, both established going on fund six to those going to fund one or fund two, how they've been able to listen to these episodes, gain insights, and then have more thoughtful conversations with those allocators.

Alexa Benz

And so taking both of those sides, it's really important for you to be as prepared and understand your customer, which is are the allocators, and see how you actually fit. Do they even like your style, whether it's your construction, your fund size, or are they overweight in that? No, totally. It's like making this a two way conversation. I've had a few managers pitch me recently that did a really good job of this.

Ernest Sweat

And it reminds me why C founders are so stellar at getting the gist out in, say, five minutes. And that leaves 25 minutes to actually have a conversation. And same thing. If you're pitching your fund to an LP, of course you've got 15 slides. Of course you've got a data room if they want to go take a look.

But that's not what the first meeting is for. The first meeting is just to get to know each other and see if you're even on the same page, if there's any alignment here. Another thing that I have started to hear from both fund managers and allocators are that people are looking to deploy still. Now, it still might take time, but you have to be persistent, I've heard, and this, who knows? This might be stale when this comes out, but even family offices in the energy region, so Texas and Oklahoma given kind of like where the price of oil has been, those family offices are now a little bit more active and have a little bit more capital to be able to deploy in private equity and venture capital.

Alexa Benz

And so it's about being persistent and looking for where the opportunity is, because there is capital out there looking to deploy from the international markets. I've heard of the rise of companies, whether it's corporates or family offices, out of Asia. So in Japan, Korea, really looking to invest more in us venture capital. And part of that is because if you look at their economies, especially Japan, there hasn't been as much innovation. And they're really trying to get both strategic insights as well as returns, insights that they can bring to their own ecosystem.

And so we've started to hear that the large funds, large asset allocators that are across multistage are going more and more over there, as well as if you're emerging managers who have some relationship connection, can speak the language, you're at an advantage. So that's another point. But with that said, I think all the stuff that we're learning, I think really fuels kind of the next segment of debate. And so, looking forward to sharing what I believe and seeing if Alexa feels the same way. No, it's interesting that some of these are things, some of the things that I want, we have not shared with each other what we want to debate yet.

Ernest Sweat

And some of them are things that we've been hearing from LP's that I slightly disagree, or maybe have a hot take.

Okay, hot take. We are hearing a lot of LP's who are saying, for true Venture returns, that's five x to eight x, you need to go early in the lifecycle. So they're focused on sub $50 million funds. Specifically, they're looking at seed, pre seed. I've got some questions about that strategy, and I know timing the market is not advised, but right now we're looking at a valuation reset in Series A and above, where valuations are still pretty high in seed.

So if you've got limited slots for a new manager, maybe you're going to deploy into one new manager, maybe two. And you already know the 2023 2024 vintage. You're able to look at some of the companies that they've put in the portfolio. I'm not sure why you're going to go for a pre seed or seed based fund when, frankly, Ernest, I'd love to hear your perspective on this because you're more of a Series A investor, growth investor. It seems like you have way lower risk and better pricing at series A.

Alexa Benz

Yeah, I am extremely bullish on a right now, and I hate this because we agree. But, yeah, and I'm actually, I've heard, well, I've seen as well as talk to some other fellow series A investors, and you're starting to see just a variety of points on, like, our opinions on what series A metric should be. And so that's causing this. The same problems we saw in series B and series C a year ago on, like, what is a series B? What is a series C pricing?

Because we were out of whack the last couple of years. You're seeing that in series A. So, like, for the, and this is throwing out even the AI companies that they're just gonna price at whatever they price it. But everything else where you're having good growth, good companies, everybody's like, yeah, get to 1 million ARR. Is that actually the right number?

And is it really about, do you have the ability to create a sustainable, enduring business that can grow faster when the market's right? And so, yeah, I think the pricing is going to be very interesting right now, especially if you raised a seed in the kind of height of the market, 2021, 2022. So, yeah, I love, I'm extremely bullish on series A. Okay, so if you are a pre seed or seed fund, maybe what you need to go do is a tiny little opportunity fund. Like, maybe that's the thing to be raising right now.

No, I disagree that I think we've learned. I'm glad we have something we disagree with. This is more fun. Yeah, exactly. Thank yous.

Thank you for saying something wrong, Alexa. So it's. I completely disagree right now. I think if we look at the Zurp era, where we had, what we had there was, like, obviously cheap capital, but we also had a lot of new managers, as well as established managers, have scope creep. Right?

And as I've talked to allocators more and more over these last couple of years, I can see their point of like, hey, I am making a big bet and risk, especially if I'm an institutional fund on you, earnest, you, Alexa, to do what you told me you were going to do, to then think when you come back and you're actually doing well at what you told me you would do, and then say, but, yeah, yeah, actually, I want to do all this other stuff.

That means I have to diligence something totally new and question all these other things. And so I would say kind of like a way to meet in the middle is, as you have great companies that you've invested in, or even, I've always argued, even companies that maybe you try to get in but missed if you have the ability and some strong lp's that are willing to do co investments with you, that's way for you to like maintain ownership or even increase your ownership or make brand new investments, that's kind of like a middle ground instead of doing an opportunity fund. Yeah, no, and I would argue that somebody who does a consistently like yourself knows what year up against versus if you're a pre seed and seed investor, you don't see hundreds of decks of other a rounds. So I truly would trust series a guys to pick among the winners more than the insiders. It's funny, you brought kind of like where the opportunity is.

You were looking at from a kind of fund manager perspective. I came up with one of my debate topics was actually from the allocator perspective, where is the opportunity? Is it we're seeing this bifurcation of cottage industry and from talking to Frank from Morgan Creek about the keynotes, that kind of solo capitalist, those connectors and it becoming a kind of two offerings right now. Right. Like it's either you're an asset allocator really, really big, you're offering capital, or you're one of these kind of cottage industry kind of going back to the old days and you're offering relationships and kind of one on one help.

Ernest Sweat

Yeah. And so, you know, anytime I go on Twitter VC Twitter or VC LinkedIn, you see different views on or data on which actually performs better. I'm on the personal and bias view that like funds that are 500 and below or can perform a lot better. It's just kind of like a math thing. But where is the actual opportunity?

Alexa Benz

I think in this next stage is going to be the smaller companies. But when I also think about where this market is going, I think about even the advances of if AI is the biggest driver, what's a better bet? One of the top five cloud providers stocks or a new startup? What's going on? Or I'll give you the field of startups.

Ernest Sweat

Yeah. Versus those five companies. Like who's going to perform better over the next ten years for sure. I mean, I just bought a bunch of Microsoft for sure.

Okay, well let's, let's play a game. Let's play a game here of like who the better bet is. I'm going to throw out three theoretical emerging managers and we're going to play FM K. That's for those who aren't familiar. That's flirt.

Alexa Benz

Is flirt. Exactly. Bang, Mary kill. I'm going to describe three pitches, three managers and who's your long term bet? Who's good for fun one.

Ernest Sweat

Oh, yeah. Just a fun one. And who do you pass entirely? Okay, do you like this game? Okay, yeah.

Alexa Benz

You could also do it in a sports thing. You could have did start, bench, or cut, but, yes. I mean. All right, folks, start, bench, or cut. Option.

Ernest Sweat

Option number one, you get a pitch from founder turned angel. This is first check in strategy. All in the industry he knows, highly engaged in 20 deals. And the LP's are all fellow founder friends or. Pitch number two is a new substack newsletter publisher.

It's all AI, huge social following, extremely young, maybe minimal work experience, but technical and tons of deal flow. And the LP's are the readers. First of all, I feel like you're trolling, and it's hard for me not to spew out names of people I know and some people I don't know, but, yeah, continue. All right, gotcha. Pitch number three, a principal from brand name VC going out on his own infrastructure.

Focus lP's are the old boss. Make it a junior partner instead. But go ahead. Why are you. No, why.

Why are you stepping on my shit? This is the choices be. Okay. All right. All right.

Alexa Benz

All right, cool. We're playing FMK and these are your options. All right, cool. All right. All right, cool.

Finish. Finish. Finish the third one, then finish the third one. It's a principle. This is an adult brand name VC going out on his own.

Ernest Sweat

And the LP's are the old boss and a few relationships. A few LP's from the old friend. Okay, some. Some clarifying questions. Are they.

Alexa Benz

Are they all raising the same size fund today? They are all raising the same state's fund. So the question might be, who has potential down the road? But yes, today they're all raising, let's say 20. Okay.

And all pre seed seed, obviously. All right, so the first person, founder archetype, second person is kind of like this social community archetype. And third is like the investor type who probably couldn't get deals done at their firm.

And then. All right, so I'm doing start, bench, and cut. So. Okay, before I give my answers, this is an awesome game, and we should do this all the time. Second, this also shows why this industry and fundraising is tough, because there's no standard answer.

Each of these, all the permutations of these three can be for different people. And that's why it's important to find the. The right people and understand your ICP. So I would. There's a hundred of each of these.

Yeah.

But then also understanding, kind of like, if I'm the LP. Like, I'm the ICP for a very, like, it's probably pretty easy to see who I'm going to, like, connect with first or value more or all that stuff, but just on my experience and what I've seen. So I would probably do at the early stage, they'll probably be the founder. First is your bench. No, start the founder.

Start the founder. Because my thinking behind that is she will have the relationships know. Exactly. After all the people who have worked for her, who she's partnered with, and great founders, depending on, like, I would have to dig into, like, what is their, you know, have they made an exit, have they gotten close to exit? All that stuff.

They usually know other great founders. And so betting on that, the second person, because it's also my bias as a series A investor is like, all right, earlier, much earlier than me is much, much more towards diligencing people and seeing opportunities. And so I'm going to value that more. So digging into the second person, the bench would probably be my community person because based on kind of what they've been able, like how much reach have they had, who's been involved? I think I really value that to be able to get deal flow as a series A investor.

Ernest Sweat

Yeah. And then last and then cutting would probably be somebody who's more my archetype. Similar. Right. We have more overlap, and that's the principle coming from the brand name firm.

Alexa Benz

Because the question always there, rightfully or wrongfully, is did they get the deals or was, did their email address get the deals? And that's a hard thing to say, but it's real. So I would want to dig into what angel things have done. I want to dig into, like, it's great to have support from your former bosses as well, but were they doing series A and now they're doing c? That might be a leap, but we've seen, and I'm not going to give people shout outs that I don't know, but, like, we've seen people do it and do it well, and so there's no shot at them.

It's just like what my personal I would want when I'm investing, especially somebody who's already an investor, I want people to fill gaps that I don't have. Yeah. What would be your answer? I think I start the founder, too, because they actually have run a business. And I think this is more than just sourcing and selecting.

Ernest Sweat

I think, like day one, if you're taking money, you're starting a company. So I think they're going to be better at processes. I think they're going to be better at understanding differentiation, etcetera. If I could pair them, if I could hear them. How did you say I can't change your rules, but then, like you're changing rules.

I think it's a bigger toss up for me between two and three, do I cut the community or the lifetime investor? But truth be told, if you only get to cut one check, it's going to founder. Yeah, yeah. And so for to kind of close out, you kind of brought up with that last archetype, the spin out of the principal, or I even think junior partner or GPS, I wanted to throw out a statement that I think VC's customer bases should really think about more. And so those customers are obviously like LP's and founders.

Alexa Benz

But my hot take is, I think the biggest flight risk in our industry right now are 30 something and 40 something gps. Where are they going, Ernest? I will repeat, I think the biggest flight risk are 30 somethings and 40 somethings GPS at funds. I think that, you know, I've had friends who were at upfront, I've had friends who just been talking to them, and even people you think that are sitting pretty at their firms. And I won't give details of firms.

Cause it's so easy to just like, guess who the people are, but that are waiting for the moment that there's a better market to either jump ship to another firm or team up with friends. And so, 100%, I think it's something that's not really talked about, but I've actually heard, and I wanna hear your opinion on it too. I've heard that founders have started asking these people and these archetypes, hey, I like you, but this is, if you're a seed investor or a series A investor, or even series B investor, we're looking at anywhere from seven to twelve years. Right. Of a relationship.

If I take this check from you, will you still be here in two years? Yeah. Because I like you. I like you. Yeah.

But I don't really like anybody else at this firm. Yeah. So I. 100%. People are asking me for advice on fundraising.

Ernest Sweat

Who are those people right now? Who. Yeah, you would, you would assume that they are quite happy working for some gray hairs and in fact, they're more excited about going and doing their own fun. Yeah. So I, my advice would be, I think if you are an allocator or a founder, you should really be asking the, you should be asking these people, you should be asking potential partners, VC's, what are you looking to be here for a while?

Alexa Benz

I would love to develop a relationship with you or really diligence the entire firm so that, like, if somebody does move for a better opportunity or new opportunity or whatever, you feel comfortable that you've established a relationship with all that, all those people. No, I think that's great advice to check in with everybody on how long they're planning on sticking around. Yeah. Interesting. Okay, I've got one final hot take.

Oh, I don't think you put this on here, but okay, cool. It's not on the rundown, everybody. Final hot take. We're hearing from folks. Okay, Josh Wolf quote on Twitter, massive, massive contraction in VC coming.

Ernest Sweat

And my hot take is that this is not an emerging manager reset or even a VC reset. I think this is a blip and that we should expect to see emerging managers first time funds continue to explode up into the right over time.

I think my context for this is at the dawn of the micro VC era. My sisters and I invested in Mike Rothenberg's first fund. It was 5 million fund one, and his pitch was, I'm 29, I'm going to invest in my own fund. What's crazy is that that was a unique strategy at the time. And right now, everybody who's a first time fund manager is 29 and investing in their funds.

It's become so much easier to get a fund up and running in those past ten years. And a lot of that is thanks to the tech platforms that are our sponsors and they're making up, setting up and managing a fund super easy. But I think what that means is, I'm not kidding, we're going to have tons of high schoolers starting VC funds. Everybody and their moms and their moms and their grandmas and their babies are going to be starting VC funds as time goes on. I don't think this is a new trend.

And with that, I think the business model might change. So you'll have some gps. Yes. Who are firm builders going for? You know, growing assets under management, going for management fees, but I think others are going to be opportunistic and time bound.

So you can imagine two second years at GSB, they get together a $15 million fund from their network to invest in their classmates with the intention that they're going to deploy over 24 months, and then they can hand things over to like a parachute or an envoy capital to manage the thing for the final eight years. So, like this question of, there's a lot of focus right now on graduation rates. And I think, like that's, that's kind of missing the point that some of these managers potentially don't want a ten year commitment. They're not looking for a marriage. And I think actually lP's are going to start to appreciate, I mean I would probably go in on that today.

I am not announcing my fund to fund of high school VC's, but you know, stay tuned. Maybe that's next week. That's funny. That sounds awful to me, like I said, but I'm also, I'm also becoming a middle, not becoming, I'm a middle aged man now. I think you're probably right.

Alexa Benz

I'm not sure if there's a market for that. Maybe as we have more democratization of kind of venture and access to it and have more retail investors, we're starting to see a lot more RIA plays. Right. And I think we have some that are some of those more established programs going to be guests in this season. So that's exciting.

But I do still for the like level up, if we look at the LP stack, as you get higher and higher up, those individuals are still going to be looking for not investors because I think what you're talking about is we'll have like a proliferation of investors, but not, they're not, they're going to be looking for fund managers. And so the question is like, do you want to be a fund manager? Which is a very different thing. So I think that'll probably happen. And it just, we'll start to see kind of like even bigger asset allocators and multi stage funds and then more of this kind of like, you know, what does that do to seed?

And this sounds like series A is just going to be awesome because that's going to be the first institutional investing group or majority in institutional investing group. So maybe I do like it. Actually, I changed my mind. I don't think it's great for the retail investors. I think you still have power law and I think it'll be really hard as a person dabbling in your son's senior year VC fund.

Ernest Sweat

So I don't know that the returns will be there, but I think the kids are gonna try it. And by kids I mean all of us. I mean everybody who's starting a VCF, you don't set out to, you don't set out to be a bottom 90% fund. Right. So actually to that point where this all originated, your point from the tweet and actually what I kind of heard from that tweet listening when you were saying it was that the contraction.

Alexa Benz

I think it's going to come from all aspects, right? It's not just the graduation, like you mentioned, of emerging managers. We're going to see a lot of those that are between fund four and fund eight that are going to stop. And we've already talked about, like a lot of those firms who have decided not to raise another fund. But even talking to large fund of funds that have been around for a while, talking about, do they still want to be in the business of like the asset allocators and multistage?

And so this is why you're starting to see those bigger players that we all know the names are going to more international potential lp's as well as like, going to places that they never went to, even in the country, to ask for money. So everybody's feeling it from, from all aspects of the industry. Now we'll start answering a few questions that we have that we gathered from our listeners. As a reminder, if you have any questions for us, you don't have to wait until we ask too late on our social media, right? Before you can always just say, you can find us on LinkedIn or Twitter and just say, hey, here's the questions that I think I would love to hear you two perspective on.

So, Alexa, you want to start us off? Okay, so from Sureventures Gopi, he's asking, of the three S's sourcing, selection and support what matters most? And I think we could put a little earnest spin on this and say, specifically, with the entree of AI inventure, as you know, when you add in the copilot in this job, does that affect what's most important between sourcing, selection and support?

That's a great question. I think it's always going to come down to selection. Like, obviously, if you don't have the sourcing capabilities, then, yeah, you're dead on arrival. But let's say you do get that. That's only part of the battle.

You can find all the great deals and have the best anti portfolio, but that's not going to bring in more allocators to invest in your funds or make you intriguing. When people think about what, what's the secret sauce of an individual? They're really asking how do you select from the pools of sourcing that you have? And so this is probably when you're thinking about starting a fund, I would say thinking about what is unique about your selection strategy. So, AI, I think it can help fill the gaps on different things, right?

It can help you draft, you know, diligence, memos, at a faster pace. You can even create certain things to be able to then source and use, you know, AI as well as with kind of, like, a lot of these data sources on, like, hey, these are the type of companies that fit my thesis best, so it can help with, like, timing and kind of, like, a lot of the grunt work that a computer can do a lot better. But when it comes to actually assessing talent, you're still. We still have to go back to real intelligence.

I think that's in all, in every industry. Like, you still need. There's certain things humans can do still in assessing things and getting a feel for things and having that commitment and conviction. These are not things that AI can do yet. Not to scare people, but, like, yeah, so that's my view.

It's a tool to be able to kind of, like, cover your basis, but it's still gonna come down to, like, you selecting the right company, you sourcing from the right pools, and essentially, like, yeah, you know, all it. It still needs you to provide a prompt. All right, so our next question was from a first time fund manager, and their situation is, they've closed $10 million, were originally going for more, and their question is, should they just close and then go back to the market later when the market's better for $25 million, for a bigger fund to appeal to more institutions? So it's kind of this idea of, like, get what you can now, prove it out, and then go back to those that you were in discussion with. Yeah, yeah.

Ernest Sweat

We've had a couple lP's on the show talk about your minimum viable fund. So maybe you just figure that out. Can you pay for your mortgage? Is this enough? But I don't know why.

Something about this question bores me to death. I just don't even care what you decide.

Like, I give zero f's what you do.

Alexa Benz

I did not see that coming. I bring. Okay, so somebody's gonna be the bad cop. I'll be a good copy. I think you should.

I think you should consider your situation. Is it first close, second close?

What are you trying to. It's kind of like when you talk to a founder and they're like, I'm going to raise a 300k bridge. And it's like, for what? What are we bridging towards? Is the story going to be that different?

Is it going to be that different? And so really kind of ask those questions of what did you trying to get to? What narrative are you trying to say? And then, you know, if you do, just stop now, first of all, and this is hard for me to do, I'm like the worst at it. But like, be grateful and celebrate that you were able to, you got ten more million than a lot of people and go to work, make the best, like investments that you can, and then have a story on, like how you're going to grow and why you're going to grow for this, for this next fund.

Again, it's about, are you an investor or a fund manager? If you're a fund manager, you're able to start from something and then grow that into something else. Oh, good thing you have earnest. That's what I'm here for.

Ernest Sweat

Okay, last question open LP posed, what should LP's be asking gps? And I'd like to flip that and ask, what should GPS be asking LP's? I think they should be asking, are you deploying capital now? Because, because one of the most frustrating things from founders we hear are like when they start to really enjoy getting to know a fund manager and then here the fund manager hasn't closed their fund and can't really deploy anything, that's frustrating. It's starting to happen more, even from LP's.

Alexa Benz

And so LP's be upfront, like you tell us to be up front with founders, you all should be upfront with fund managers. So that's 1 second, do as much research as you can. But if you can't find, I would even ask, like, what do you feel that you're underweight in or overweight in? Because that can give you a sense of if you fit or you don't fit. And if this truly is about developing relationships for the long term, maybe they're overweight in your category of series A B, two B software.

Yeah, but they're underweight in consumer, you're like, well, I have a very good friend, Alexa, who you should meet starting those relationships, and then Alexa's going to blow them away, then they're going to think more highly of you as well. Right. So those are two things I would ask. Yeah, yeah. Is there anything the IC committee might be hung up on or might be, you know, something that they might bring up and so you can practice together addressing whatever the complate confounding elements of your strategy are so you can actually talk through it with them?

Ernest Sweat

And maybe, maybe the answer is, oh, it's not going to be a fit. Or maybe the answer is, oh, cool. Now that we've talked through it, I think that is a good argument why this does, this is a good fit. So one thing that happens a lot of times on DDQ's is, there's usually a box at the end if you've answered your life away of 50 pages of like, is there any additional information? So we wanted to have a segment called additional information where one of us provides kind of some parting thoughts that may or may not have anything to do with what we've spoken about.

Alexa Benz

So I'll do the first one. We'll see how this goes. And Alexa, feel free to if you find something funny, laugh. If you don't, it's fine, too. All right, I need to call something out that's really popular right now.

Sure. It's having a lot of adoption faster than PCs, cloud computing, and mobile combined. It feels like a real platform shift in our society, and I need to call out what's wrong with it before it becomes so mainstream. I mean, from teenagers to grandparents, everyone is talking about it and consuming it, and enough is enough, even though it seems like we are headed into a world where all we see and hear and consume will be unoriginal, maybe even artificial. Oh, I just realized you might think I'm talking about AI.

No, that ship is sailed. That is definitely going to be infused in every aspect of our personal and professional lives. Although I promise I didn't use chat GPT to write any of this. This is real intelligence. Anyway, back to my point.

Ernest Sweat

What is?

Alexa Benz

I want to point out something more on the undercurrent, but it's there if you notice it. I'm talking about nostalgia.

It's at an all time high in the 2020s, from the entertainment industry bringing back new stories of my childhood favorites like Teenage Mutant Ninja Turtles to X Men, others being taken back with a Barbie movie, or new generations joining the conversation of once popular tv shows like Friends, Overrated, Martin Underrated, and Seinfeld unquestionably the greatest show of all time. Hell, I've even seen it in consumer tech, with the rise of non smartphones and wired headphones becoming more popular. Look, it's even got me. And lastly, I can't forget how even the political arena has become nostalgic and has resulted in us having the same two presidential candidates that we had long ago in the fall of 2020. But the venture capital industry hasn't been shielded from this shift that I want the old thing back.

Train is here. We've had very prominent investors move back to their former firms with other founders turned investors turning back to becoming founders. As it seems the clock is striking, almost midnight. We have also seen the trends of capital deployment and fundraising returning back to the good old days. Or I should say not so good old days for some.

The class of Zurp emerging managers are struggling now to raise fund one or fund two. Capital raised by underrepresented and female founders has returned back to the days of 2016 and 2017. The untold story is that so many women and black and Latinx investors that broke into the industry as associates, principals, junior partners are now still on a website but no longer work for those firms and fear that they might not get back into the industry. While the industry is clearly at an inflection point, where there are some firms going back to being one on one personal relationship focus, while others are becoming bigger and bigger and bigger and providing capital as an asset, allocators so what's the point of nostalgia? To learn from the past or reinvent it, or keep doing the same thing?

Instead of making things great again in VC? Let's make them better. I love it. Ernest, I think you're hitting on something here that it does feel like a reversion to the comfortable and a reversion to how things have been. So hopefully we can help with this platform to not and make things more transparent and make better.

Ernest Sweat

Yeah, my high school fund of funds is going to be the first of its kind and we're only going forward. Well, at least I please you on that, Alexa. So you're up for next DDQ. See you later. Allocator after portfolio tile investing with a smile.

Alexa Benz

Allocator after portfolio tile investing with a smile.

Ernest Sweat

Allocator after portfolio tile investing with a smile.

Alexa Benz

Allocator after portfolio tile investing with a smile.

Start, Bench, or Cut: Which Emerging Manager Archetype Do You Want on Your Team?

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2: Deep Dive into Emerging Manager Challenges

3: Listener Q&A

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