20VC: Lessons from 32 Years of Fund Investing | Why Exits Will Be Larger & Funds Sizes Bigger | Top Reasons to Turn Down Potential Fund Investments | Fees, Carry, Deployment Pace; What Do LPs Inspect When Fund Investing with David Clark, CIO @ Vencap

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The Twenty Minute VC

Finance, Venturecapital, Tech News, News, Siliconvalley, Technology, Investing, Startups, Business

4.4 • 637 Ratings

🗓️ 25 March 2024

⏱️ 71 minutes

🔗️ Recording | iTunes | RSS

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Summary

David Clark is the CIO of Vencap, one of the leading fund of funds in the venture landscape. David has been at Vencap for 32 years and has been an LP his entire career.

In Today's Episode with David Clark We Discuss:

1. From Unemployed Student in Love to Leading LP:

How did a girlfriend lead to David taking his first steps into the world of fund investing?
What does David know now about fund investing that he wishes he had known when he started?

2. Is Being an LP Harder than Ever Before:

Does David agree with Doug Leone, "venture has transitioned from a boutique high margin business to a low margin commoditised industry"?
Does David agree with Ryan Akinna @ MIT, "it is harder than ever to be an LP"?
Does David think that venture returns will worsen in the coming years?
Has the denominator effect for LPs gone? Do LPs have liquidity today?

3. What Makes the Best Performing Funds:

What are the single biggest commonalities in managers that did a 3x net DPI fund?
Of managers with a 3x net fund, how many had a single company return the fund?
How do the best firms do generational transition?
How do the best firms take cash off the table and sell part or all of their position?

4. Five Things LPs Hate In Potential VC Investments:

What are the two most common reasons David will turn down a manager?
How does David feel about the varying fee and carry levels?
How does David feel about the compression of deployment times of funds?
How does David feel about managers increasing fund size so significantly on every cycle?

5. Fund Sizes, Exits and Concentrating Returns:

Why does David believe exit sizes will increase and fund sizes could be even larger?
Why does David think that despite the above, the concentration of returns will be even smaller?
Is David concerned by the IPO window being largely shut and the increased regulation on M&A?

Transcript

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0:00.0	One of the prevailing narratives is that you can't get a fund returner for a billion
0:03.9	dollar fund. So we had a look at our data. And we found 45 investments that have returned
0:10.3	a billion dollars to the single fund that invested and were also fund returners. What you need
0:16.0	to do is to compare fund sizes today with the exit sizes in 10 to 15 years because that's when those companies
0:22.0	are ultimately going to become liquid. This is 20VC with me, Harry Stebbings. Now shows like this
0:27.2	one today are my all-time favorites to do. For any venture manager or investor, I think this will be
0:32.9	one of the best podcasts you listen to this year. I'm so thrilled to welcome David Clark,
0:37.3	CIO at VanCamp,
0:38.6	one of the leading fund of funds in the business. David has also been an LP for 32 years,
0:43.9	so there is nothing this man has not seen cycle-wise, booms, bus, and you can actually watch
0:49.3	this episode in video on YouTube by searching for 20VC recorded live in the 20VC studio. But before we begin,
0:56.0	I need to tell you about Hive. 2024 is shaping up to be a big year for the markets with a number
1:01.7	of iconic unicorns rumored to be going public. Whether you're a fund manager or invest solo,
1:07.1	Hive is the best way for you to access the coming wave of IPOs before they hit the market.
1:12.5	There is no charge to access the platform, and it's live trading data on hundreds of late-stage private companies.
1:18.7	Best of all, buyers don't pay fees on Hive.
1:22.0	Create a free account today at Hive.com forward slash 20VC.
1:26.6	That's Hive with two eyes.com slash two zero VC and see why they're the
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1:43.2	Secureframe empowers businesses
1:44.8	to build trust with customers by simplifying information security and compliance through AI and
	...

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