Eldar Tuvey

Firstly, this isn't a post about Europe vs US. They're different beasts at different stages of development… However, as a European VC, it's critical to be connected to the US VC market. If you are, on average, you'll get bigger markups for your portfolio by taking advantage of the UK/US arbitrage among other things. Two examples of this are Lawhive and StackOne from our portfolio. Both have founders who've moved to the US and both have raised from GV (Google Ventures) with deep US ties of course. Same with companies like Mimica (Khosla Ventures), Carwow (Bessemer Venture Partners, Accel) and many more. You need to be able to pick the phone up to tier 1 US VCs and get them to meet your portfolio. So when Adam Shuaib, PhD, Millan Suri and I went to SF a few weeks back, we tried to cover as much ground as we could, meeting about 40 of the tier 1 US funds like Founders Fund, Greenoaks, Sequoia Capital, Thrive Capital, Andreessen Horowitz…. It takes time to build this network but the rewards are great. As you can see, we also went surfing.

74

2 Comments

🚨 We just uncovered the strongest correlation to fund launch success that we’ve ever seen.   We work with over 60% of the world’s new VC funds and have built the most detailed database on emerging managers anywhere.   For years, we've been trying to find WHAT correlates with new and emerging manager success.   We studied every angle: demographics, geography, professional background, even personality traits. None of them consistently explained why some managers succeed and others don’t.   Until now.   My colleague and good friend, Michail Michailow ran models across hundreds of variables on all the managers we’ve worked with in recent years.  But none of them seem to reliably predict performance.    Then he looked at one we hadn’t fully considered before: how much managers use AI in launching their fund.   The results were staggering.   ➡️ The more managers leveraged AI, the faster they launched. ➡️ The more they used AI, the more capital they raised from LPs. ➡️ The correlation wasn’t just strong — it was the strongest we’ve ever seen.   The difference is massive. Managers who don’t use AI are operating on a completely different playing field, and we think the gap will only keep widening.   Venture capital is a game of speed. If you’re not using AI, you will be slower to fundraise, slower to close, and you may never reach the momentum needed for your fund to truly take off.   AI has become a DECISIVE factor in who breaks through and who never makes it.   If you want to see which AI tools these top-performing emerging managers are actually using right now, drop a comment below and I'll share more!  

118

50 Comments

We had Tom Charman (Co-founder at Blok) on Ventures, Fresh out of stealth having raised $7.5m He explains why their star-studded team is building Blok "A lot of companies aren't particularly good at predicting how their customers are going to behave, but more importantly, they're not necessarily targeting the right customer." "Most companies will optimise for short-term benefit as opposed to long-term gain - what's actually happening is in the long term they're shooting themselves in the foot." "Nine in ten experiments are failing, it's taking too long to run experiments, teams don't know which experiments to run." "If we're going to move towards a world where it's multimodal interfaces with lots of different UI, knowing what to generate for who and when is going to become significantly more difficult." You can watch the full conversation by searching "Tom Charman, Co-founder @ blok: How We're Predicting User Behaviour Before Writing Code"

57

1 Comment

Friday rant time. Investors don't take risks. Everyone wants Tier-1 background.  Nobody is out there for the little guy. Sharing a brief breakdown of VC economics (deep dive link in comments). VC is NOT charity, it's pure financial services. The NUMBER ONE metric we're measured by (for older funds) is DPI, fancy term for how much money you've given back. 1x, shut shop and go home. 2x, better, but still bad. 3x, now you have a reason to live. (for folks wondering how young funds are measured, it's typically MOIC + IRR, basically, how are companies you've invested in performing at present). Assume a ₹200 crore seed stage fund. Needs to give back ₹600 crore at least. Ignoring fees and expenses, you can invest ₹10 crore in 20 companies, for 10% each. Since it's quite clear (Fractal, Zomato, BlueStone, Nykaa) that it takes 12-14 years to IPO a startup in India, you can't wait that long (fund life is 10 years). So you have to exit to Series C/D investors who WILL want a discount. Assume 3 rounds of dilution, leaves you with ~5%, 20% discount, so 4% held. Seed has ~75% mortality rate, so 5 companies left. These 5 have to get you ₹600 crore. At 4% held: 1 company needs to raise at ₹15000 - Just NOT happening 2 companies raise at ₹7500 - Still VERY unlikely 3 companies raise at ₹5000 - Closer 4 companies raise at ₹3750 - Possible 5 companies raise at ₹3000 - More possible ^This is also the price Minimalist was acquired by HUL, which was an OUTLIER outcome and first of it's kind for consumer startups. The above should illustrate how hard the business is. Hence when funds insist on backing folks with successful exits, strong corporate careers, or absent both, just a great educational background, is maximizing luck. At Seed, there are two things that swing it for you. I call it Numbers & Story. If you have a GREAT story (I sold my last company for ₹500 crores), you can have ~no numbers. If you have a good story (I was VP Google India), once again, numbers are lower priority. If you're 22, from a small town college, breaking it down harshly, you NEED numbers. As an investor, we just DON'T ignore amazing growth. That being said, since this is a (very hard) financial business, we're looking at any and every indicator of possible success. Experience here helps in two ways: - Have already made dumb mistakes on OTHER peoples money - Have a network who will pick up the phone and help you/become first customer #venturecapital #startups #funding

455

99 Comments