We are a capacity constrained growth fund. We chose to focus on small growth checks because this enables us to take advantage of opportunities that large funds ignore.
We can invest into opportunities when the allocation size into “consensus” deals is too small for big funds, or the deal is perceived as “too safe”. These opportunities exist because big funds have become roughly 10x bigger in absolute terms over the last decade. A $10mm check that turns into a $100mm outcome doesn’t move the needle for them, but it does for us.
These platforms make exceptional partners, and will continue to have success with their strategy. And we will make exceptional partners to them, as well as to founders. Every founder has a story about the most helpful investors on their cap table, and they tend to be loosely correlated with check size.
There is a myth in silicon valley that the best way to select power-law companies is to try to pick power-law companies which steers smart people away from “safe” bets. Every 100x investment at some point had to 3-5x, and thus we aim to deeply understand the first principles that lead to the next major inflection points of the company. We never invest in companies where we think the upside is capped after that 5 year exercise; we just think this is the best way to understand a business while avoiding a whole lot of navel gazing.
We will register the firm with the SEC. We want to be able to access great businesses at fair prices, and not be hamstrung by an arbitrary regulatory rule written 100 years ago. It is not our job to be the saviors or stalwarts of an old funding paradigm. Our job is to invest in the best companies we can, regardless of structure.
Industries come in and out of favor. Interest rates (and fund sizes) rise and fall. There are few evergreen pastures in Venture Land, and we will structure our fund to pursue those ruthlessly.
Founder talent will remain the scarcest resource. There will always be monumental companies started by the technological conquerors of the era. The areas these people focus on will continue to shift as technology accelerates, and accordingly the way in which they are funded will change. We will change with them.
The funds we admire most have succeeded because they are built in ways where decision makers have enormous autonomy and accountability. They don’t outsource their thinking, and they can move ridiculously fast.
The easiest way to assure we do this is to keep our team small. A small team also enables us to provide borderline-uncomfortable levels of transparency to founders because almost every conversation they have will be with a decision maker. We will occasionally hire apprentices, but this is mostly to give back to the ecosystem. We were once junior investors at VC firms where someone took a bet on us, and we hope to do the same.
Eric Scott, Managing Partner
Robey Miller, Managing Partner