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fredwilson
@fredwilson.eth
Hi Casters. I wrote about some "inside VC" topics this morning. You may or may not find this interesting. But if you are in VC, particularly early in your career, you should give this a read. https://avc.xyz/reserves,-recycling,-and-returns
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Todd Goldberg
@todd
Thanks for writing this. 1) Do you think reserves are as necessary for smaller early-stage funds (<$30m)? 2) Since you set aside reserves for every company, how much does subsequent valuation matter, if at all (ie are there limits), for you to do a follow-on? (Assuming you’re not the follow-on lead)
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Jeffrey Lebowski
@lebowski
@fredwilson.eth not quite as rosy a topic as reserves, but how does USV think about recalling capital?
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Alok Vasudev
@alok
How do you model your early stage crypto investments?
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Joseph Jacks
@josephjacks
Thanks @fredwilson.eth .. I’m a very disadvantaged solo-GP with zero investing experience (let alone VC experience) before I decided to start a fund 6 years ago. Ive made lots of mistakes but now manage $700M~ worth of investments across about 30~ founding lead (at incorporation) startups. Several have raised a ton more and I invest across funds and via SPVs. No reserves. Love to recycle though! And it’s working out great so far. For me raising the SPVs hasn’t been hard at all. Am I a weird alien exception or am I maybe doing something right? I feel like returns are optimal if you just fully deployed funds and then did SPVs for pro ratas and follow ons …
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Marcelo Gobato
@mgobato
Tks for sharing! Curious to hear your thoughts on equal reserves amount allocated per company Vs allocating reserves in a pool and doubling down on winners. Although there’s selection risk (false positives), do you think it’s worth running that risk.
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beiey
@beriy
Hope so.
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Robert Fisher
@brandicantrell
Interesting read for early career VCs
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Giuliano Giacaglia
@giu
This was a great post! Thanks for sharing it
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Barely Accredited
@baccredited
thanks for writing this. i used to do most follow-on rounds with at least my prorata to not get diluted. but i found a few fake-unicorns (ex is grove.co) where this strategy didn't work at all. then other real unicorns (like instacart) where investing only once before series A provided incredible returns with no follow-on investments. just presenting a real-life counter argument for a nano scale investor here
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Breck Yunits
@breck
> I have seen early stage VCs make way too little on their best companies because they ran out of money and could not keep on participating or they had to sell too soon or some other reason that was effectively poor portfolio and fund management. This has been me. I've had ridiculously good bets (I bet I could be a candidate for GOAT) but I just deploy all my money or give it away as it comes in. This is intentional though. My hope is someday people will realize my abilities and coinvest with me and give me a small carry.
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