20VC: Why Small Markets are Better Than Big Markets, The Biggest Delusion of Early Stage VC, Why AI Investing is like a Horserace and Why The Most Ambitious Companies Growing the Fastest are not the Best Investments with Adam Fisher, Partner @ Bessemer

The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch

The Twenty Minute VC

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

4.4 • 637 Ratings

🗓️ 22 January 2024

⏱️ 72 minutes

🔗️ Recording | iTunes | RSS

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Summary

Adam Fisher is a Partner @ Bessemer Venture Partners and one of the most successful investors in Israel over the last two decades with seed investments in Fiverr, Wix, Melio, HiBob and more. Adam has now made over 60 investments and has had an incredible 23 successful exits. Adam has now been in venture for over 27 years having started his career at Jerusalem Venture Partners in 1996.

In Today's Episode with Adam Fisher We Discuss:

1. Lessons from 27 Years in Venture Capital:

How did Adam first make his way into the world of venture straight out of college?
Does Adam agree with Doug Leone that VC has changed from a "boutique, high margin business to a commoditized, low margin industry"?
What does Adam know now that he wishes he had known when he started in venture?

2. How to Pick Winners: 23 Exits in 60 Investments:

To what extent does Adam think pattern recognition is a good thing? When is it bad?
Does Adam prefer to invest in outsider founders approaching a problem with fresh eyes or insider founders who know the problem back to front?
Why does Adam believe that "category creation is BS"?
Why does Adam not like to invest in big, hugely ambitious markets? Why are smaller markets best?

3. The Deal: Mastering the Art of Negotiation and the Deal:

How does Adam reflect on his own relationship to price?
When doing an investment, does Adam think about who would do the next round?
How important is ownership to Adam? Does he want it all on first check?
Why does Adam not like to invest in hot AI rounds?
What have been Adam's single biggest investing mistakes? How did it change his approach?

4. Mastering the Art of Portfolio Management:

Why does Adam believe that it is impossible to know which of your portfolio will be the breakout winners early on?
How does Adam approach reserve allocations with this in mind?
How does Adam know when is the right time to sell a position?
What does Adam believe was the biggest sin of the zero interest rate environment period?

Transcript

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0:00.0	I don't think that the way you build a big company or the way you get a big exit is by investing
0:04.4	in the most ambitious companies, growing the fastest. Those are also the companies that crash
0:09.4	and burn. I think we dilute ourselves into thinking we know exactly which company is going to be a big
0:14.3	outcome. We don't. Oftentimes, 90% of the value that is created in the company happens in the last
0:20.0	12 or 18 months of the company's life.
0:22.4	As an investor, you need to decide are you going to make your mark by having hit one out of the park or by having multiple hits?
0:29.1	This is 20 VC with me, Harry Stebbings, and I started 20VC nine years and 2,700 episodes ago
0:35.9	because I wanted to be the best investor in venture, and I wanted to
0:39.0	learn from the best. And the podcast today is a great example of this. The learning still carries
0:44.7	truth today, and this episode is one of my favorites that I've done recently. So joining me in the
0:49.2	hot seat, one of the most successful Israeli investors of the last two decades, Adam Fisher, partner at
0:54.6	Bessemer Venture Partners, where he's made over 60 investments, and check this out, had
0:59.2	an astonishing 23 exits.
1:01.7	What a hit rate.
1:02.7	He's led the seed rounds for Melio, Hybob, and many other incredible companies, including
1:07.6	also Fiverr and Wicks.
1:09.3	But before we dive into the show today, Hive is the marketplace for private stock.
1:13.8	Whether you run a fund, lead an investing syndicate, or invest solo.
1:17.9	Hive gives you unparalleled access to some of the most exciting companies in the world,
1:22.4	all before they go public.
1:24.1	Think Flex Sport, Reddit and Airtable, alongside many other companies I've featured on the show.
1:29.1	Secondaries are so much easier with Hive. Stay on top of the private market with free access to volumes
	...

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