What I Tell All New VCs About Their First Funds

No Need To “Grab a Coffee and Pick My Brain” Because Here’s What I’d Say…

A lot of new venture funds out there these days. People sometimes ask me, “wow, is there still room for new investors?” and my answer is that generally while a particular zip code or two might feel ‘overfunded’ at a moment in time, that early stage entrepreneurism is still UNDERFUNDED globally by at least an order of magnitude. So yes, there is definitely room for new investors, especially if you are going to execute at least one of the two following competitive advantages:

1. Fund people/ideas ahead of consensus — that is, find founders and markets that aren’t currently being chased by the mainstream and get to conviction ahead of the pack.
2. Be more helpful than the folks on cap tables today who overpromise and underdeliver — every cap table I’m on has some percentage of allocation that provided zero value after the investment. If you can be more valuable than that, I’d love to bring you on to the cap table of the next seed round we lead.

Photo by Ben White on Unsplash

So besides those points, here are three things I generally advise folks raising their first funds…

A. It’s Not Always Worth Doing Second and Third Closes: I generally believe new investors underestimate the…