YouSaid · the spoken record

Adam Besvinick

lines on the record: 55
first: 2023-05-29
most recent: 2023-05-29
sittings or episodes: 1
sources: podcast

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“Probably in the midst of investing out of Fund three, a very iterative step up from Fund 2, maybe on like the 40 to 50 range, still solo GP, still with a 27 to 30 company portfolio, still investing in the same themes. It's a step up and check size, continuing to be consistent with how I operate. As long as I can do that five years from now, I know I'm going to be successful”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“Have to say, I wish that things were a little bit more transparent. I wish that things were more consistent for processes for entrepreneurs. The process for raising capital as a founder is incredibly opaque and it probably shouldn't be. The amount of times that I've had to advise and coach founders how to have certain conversations when they're out raising what certain signals mean from investors, how to position the company and they're blown away by what my advice is is an indication to me that companies aren't being evaluated and founders aren't being evaluated in the most transparent, systematic way, if I could change anything. I wish that that dog and pony show, as I said before, wasn't as much of a dog and pony show. It's really hard to change an industry that is still in the grand scheme of things quite niche and has 10 to 15 year feedback loops before someone realizes that things need to be different.”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“To be. And when I say used to, I mean like a decade ago, but I think the fervor of 2021 is doing more harm than good, at least for founder mindset.”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“I think it's very challenging to advise founders right now as to what to expect in this market. What benchmarks matter, what milestones matter, what gets around done versus not done. The whiplash that's been experienced from 2021 to 2023 is challenging. Founders shouldn't necessarily rely on venture dollars to keep them afloat. Founders should figure out, all right, how do we extend runway? How do we grow revenue faster than expenses? How do we get to profitability? Even if we're not profitable, how do we reduce our burn to such an extent that we're able to get through 2023 and 2024 so that we have runway well into 25 and we can fundraise in 2025? That's an exercise I've done with at least half a dozen founders in the portfolio. How much cash do you have at the end of this year? How much cash end of 2024 if you don't raise any dollars at all until January 1st of 2020? Make sure you have it at least seven months of cash at that point. But I do think that it's a healthy shakeout for the ecosystem. It's the way things used.”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“I think the number of companies that are having a hard time raising seed in A rounds right now, like, hey, we've got half a million of ARR and we want to raise like $3 million. Like the level of companies that are raising seed and A, I think are unjustifiably being punished because VCs deployed way too quickly in 2021. And now they're like, well, we deployed hundreds and hundreds of millions of dollars in 12 months. Now we need to make sure this fund lasts for three and a half to four years because our LPs have told us that. And so you have investors doing way fewer deals than before. They're now actually doing diligence, which slows down processes as well. And they've reserved an increasing amount of their dry powder for reserves for existing portfolio companies to keep them alive versus net new deals because they're going to have existing companies that are doing well that are going to struggle to raise for no fault of their own. And so they need to have dry powder to keep those companies.”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“Companies that were raising multi-billion dollar valuations at 1,000 X ARR is the craziest, like just as a pure investment multiple valuation perspective. Ultimately, the craziest thing that happened was just the level of fervor and the pace of investment that you saw from funds that are now course correcting to an extreme degree. And it's really hurting founders. The level of slow playing of funds now, just extreme whiplash for entrepreneurs.”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“Signaling as relates to who is involved in your round. I used to be very, very averse to multistage firms being involved early with smaller checks. And I thought that there was signaling risk. Oh, well, if you have this family office in versus this other investor, then the optics of that don't look great because nobody knows who they are. And what the last 12 months have shown me is raise capital from reputable, reliable sources that align with your ethical standards and that are providing clean terms. Beyond that, it almost doesn't matter, at least in this current venture climate, who you raise from, because raising it all is an accomplishment right now. To me, all else being equal, you'd rather have tier one investor involved. They provide great optics, great signal, et cetera, et cetera. But like the signaling risk of certain investors being involved, in my mind, is completely out the window because ultimately you can overcome that with good execution.”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“Take Lux's growth fund. I think that firm is incredible. I think the work that they do is backing some of the most innovative and thought-provoking companies. And again, they're investing in things that I will rarely ever invest in. It's pretty challenging to argue with the returns that they've generated over the last few years.”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“They're still the standard, in my opinion. As someone who knows what they're good at, doesn't deviate from it. I have a ton of respect for the people that I know personally over there. And I just think they're outstanding investors.”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“I'd go with Bold Start. I think Ed and Elliot are phenomenal investors, very disciplined on how they get involved and what they invest in. I've co-invested with them a couple times at a prior firm and they were phenomenal to work with. They're investing in a lot of stuff now that I don't touch and will rarely touch. And so from a diversification perspective, it would be great to be an LP in that fund.”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“Been quiet this year when I see an announcement that Tiger is involved in a round. It's shocking versus in 2021 where I think there was one time in Pre-Max newsletter where they led seven deals in a single newsletter. I think people are returning to what they're good at.”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“I think the winners are the ones who are willing to adapt, and the losers are people that have nothing distinct to offer when it comes to compelling a founder to take their investment. Or we have a boatload of cash. We could probably lead every single one of your rounds if that was what was necessary. I don't really know that there's anything in the middle.”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“The way I think it's trending is hopefully smaller funds, more specialized funds, even firms that have a lot of AUM, you've seen them spin out dedicated funds that are focused on certain categories. And I think those smaller funds ultimately will outperform. And smaller doesn't necessarily mean 50, right? It could mean 250 or 300 compared to 2 billion. But I think what you're ultimately going to see is a very distinct bifurcation of relatively smaller vertical-oriented thematic-oriented funds and then behemoths. And if you're just in the middle, it's very tough to stand out.”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“You're describing a founder that has an uncanny level of discipline. It's easier said than done to say raise five and operate like you have one and a half. You and I both know that most people don't have the willpower or self-control. I would much rather invest in a founder that says, I'm going to raise two and a half and operate like I raised one. My general rule of thumb is you need to have at least 24 months of cash gross spurn, not net burn when you raise a around that I'm involved in. I assume the fact that they're probably going to overspend a little bit, so it's probably more like 21 months, but let's call it 24 months of gross burn. If you can't find product market fit by being that disciplined over a two-year period, you probably didn't deserve to raise more than two and a half or two or whatever the number was in the first place. Giving someone $5 million and four years to figure it out to me is a luxury of a billion dollar venture fund. That's a luxury of the multi-stage fund that knows that a $5 million check doesn't matter or doesn't move the”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“The round was quite sensible, is very achievable when the market is hard like it is now. It's not achievable when you raise at 15 to 25 before you've written a line of code.”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“That's fair, but those aren't looking glass founders, right? Like the founder that rolls out of bed and says, I'm starting a company and I'm leaving Stripe. That's not a looking glass founder. The person that has like eight term sheets lined up before they get their coffee at Cyclass when you raise $5 million at 25, you have a target on your back before you've even written a single line of code. But raising one and a half to two at something high, maybe 12, they're taking less dilution than maybe a first-time founder who has zero track record and needs to raise one and a half at six. But they're doing so because they understand that there's real discipline that's necessary to execute well and there's significant margin for error when you raise at a lower number. I've had nine companies raise rounds since the start of Q4. Six have been priced up rounds. Three have been saved with higher caps out of 24 companies in Fund1. All of them have been able to do so because they raised at very sensible levels. And so the ability to raise an upround when your original”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“Hard to disagree. I don't know how you define seed these days, right? I saw an announcement in Dan Premax newsletter yesterday that a company raised.”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“Funds are no different. The individual partner that you get introduced to really matters because he or she might specifically be looking for a company like yours. Their personality might really be aligned with yours or be really counter to yours. And I can help steer a founder to the right individual at a certain fund in a way that they probably aren't thinking about.”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“They're too narrow with who they go out to. They don't actually realize that there's lots of other investors that are not the household name preceded and seed funds. That would be phenomenal investors on the cap table. I'm talking about the really nichy healthcare investor that only does healthcare, that's based in Nashville, that nobody knows about unless they're a healthcare investor. And this founder just thinks like, well, I should just go to up and down the MIDAS list. And that's my lead list. And it's like, well, no, you need to have a much broader funnel and you also need to recognize that there's a lot of strategic value that an investor can bring to the table. You might not have ever known that investor before this process started, but I'm going to put you in front of them. I say the second point that they don't think about is they don't appreciate that the partner at the fund matters. They just think about the fund as a giant entity and don't realize that there are personalities and motivations and bureaucracy and all sorts of things that internal dynamics of any large organization invent.”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“Cold out bound to entrepreneurs. It allows me to build immediate credibility and rapport with them because I can point to a bunch of companies in the portfolio that are very relevant to them. When I build a syndicate of investors around a company after I've committed to lead that round or just a first yes to that round, I go through a list of literally hundreds of investors that I have relationships with that I've tagged based on stage and category that they invest in and check size and a bunch of other notes that I have for them. And I send that curated list over to the founder and say, which of these do you want introductions to? Give me a blurb and I'll send this note over. I know that I'm not the only investor that operates that way. And the ones that go to the top of the list are the ones that I know that are hyper relevant to what that company is doing.”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, I'm a single GP, so my bandwidth is constrained. I can't be a generalist. I can't see every deal. I can't chase every hot company. The thematic investing that I do is the fundamental driver of all of my sourcing. It allows me to be top of mind for other investors when they share deal flow because they know what I invest in. They know the constraints that I invest around. And they know that I could be a good fit because I invest in healthcare or climate or education or small business. They know that I should be top of mind for them compared to a generalist firm who they might not necessarily immediately think of when they're building a syndicate. It allows founders to come to me directly. I invest in cold inbound. I respond to every single email, even if it's simply to tell a founder this isn't a fit for me. Again, reputation matters. The deals that I've done that have been cold inbound have been explicitly because they're looking for investors that invest in relevant themes to what they're building. Those have been great companies. In fact, those are some of the best companies out of fund one. And then with my own.”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“No, and I look back, I acknowledge something and I thought it could be mitigated over time and it was not. With every investment memo, the last slide of it is a risks and mitigance section. And so I usually put three to four risks and three to four counter mitigants that could mitigate that risk over time based on what I'm currently seeing at the time of investment. It's a good check for when a company inevitably fails or isn't doing well for me to go back and look at, was this a risk that I was aware of, but I underwrote it and was comfortable with it anyway. This might change over time, but right now at this moment in 2023, with these particular companies, the things that are keeping me up at night are things that I was aware of at the time of investment that I was just comfortable with and thought would get mitigated over the life of that company. And in a couple instances, they have not.”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“It's not a home run game, it's a grand slam game. There are going to be companies that inevitably go to zero out of 24 companies. There's only a few that make me lose sleep at night right now, call it three years in. But ultimately, I know that the vast majority of returns are going to come from 20 to 30 percent of the portfolio. And I'm comfortable with the inevitable zero or less than 1x that's going to make up 40 to 50 percent of the portfolio call it eventually eight to ten years in.”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“I'm investing in a thematic way is that I can build instant credibility and rapport with a founder building in healthcare because I can probably point to half a dozen other companies in the portfolio that are super relevant to what they're building that might be customers. If I do cold outreach to a founder, which I've done in probably half a dozen investments that I've made so far, I immediately am validated in their mind because I have a portfolio of very relevant companies that they care about.”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“Haven't found it to be a challenging check size. So, like I said, in fund one, the ranges were 750K to $3.5 million. It's $4 million round sizes. I got what I was looking for in virtually every single investment. I don't think it's that unfriendly. I've come into rounds with a 300 to 400K check after there was already a lead. So it didn't prevent me from getting what I was looking for. A quintessential round for me would be $1.5 to $2 million at a six to 10 post down the middle of the fairway structure for me. If I want to write a 500K check, if there's a 1.75 million dollar round and they already have a quote unquote traditional lead who's taking a million, I can still get 300 to 500K and it's on me to compel that founder to give me that allocation. It's on me to sell them on why I should have that much of the remaining 750K. I'm not bashful about preemptively having founders give references to other founders. It's a key part of why.”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“No. In fact, I've had general catalyst, true ventures, tribe, lower carbon, forgetting others that have come in after me, after I've said yes, and have not altered the terms of those rounds.”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“I guess it depends on how you define lead. Like I saw Jason Lempkin tweet the other day, like a lead investor is the investor who writes the next check when nobody else will. If that's the only definition of a lead, then no, like I'm investing out of small funds. I can't necessarily justify writing follow-on checks. To me, that's not necessarily the only definition of a lead. To me, the definition of a lead is one that helps catalyze, arrays. The one that sets the terms, the one that's the first call, the one that's the most responsive to that entrepreneur when things are going terribly, it's the investor who helps compel other investors to say yes to that company, both at the time they're investing as well as in subsequent rounds.”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“My valuation rules, and I've stuck to that yes. If I believe that I'm getting adversely selected because I'm getting my allocation, then I should probably just quit doing this job, right? Like I have to have the confidence to believe that I'm getting into deals at the target check size that I want and founders are selecting me because they believe that I'm a great fit for them. And I believe that this is a great company. If I thought that every investment that I made was open to me writing the full amount that I wanted to because they weren't getting anyone else to say yes, I definitely couldn't go to sleep at night. My philosophy has been be a first yes, lead around, set the terms, commit early, and then basically put on my investment banker hat and become placement agent, help bring in the rest of the money into that round by going to a select group of investors that I feel are highly complimentary to me that might not be household names.”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“I do think that having this set of rules allows for when you do want to make an exception, it's very clear why you're making that exception, right? Like the more constraints you put in place, the fact that when you do want to or need to make an exception, it means that it's reached some level that you thought might be previously unattainable. So for instance, in Fund one, I have an investment that I made that was outside of my valuation range. The round size got larger after I had committed. I wasn't going to back out. I still got my 300K allocation, but the round size got larger after I committed a bunch of people piled in. I wasn't going to tell the founder, oh, sorry, I'm not in anymore because you raised four and a half instead of three. Like if anything, the optics were the steel was even more compelling now than it was when I said yes. And this team is by far the best executing team I've ever worked with in a decade of being in venture, bar none. And so I obviously am very happy that I didn't compromise on.”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“Everything is going to go wrong. VCs underwrite everything going right. It required me to be incredibly buttoned up when I evaluate a company's went to investment committees to pitch them. And I think that mindset actually not really all that helpful at the precedes stage. I think that actually is quite helpful when it comes to instituting a set of guide rails and allowing me to focus on what I invest in and what I don't invest in.”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“The strategy that I'm pursuing of being a precede investor that takes a much more institutional approach to investing in discipline is definitely uncommon. Most sub $40 million funds, really, especially most sub $25 million funds, have way more investments. They write way smaller checks. It's not necessarily spray and prey, but it definitely is more of a scattershot approach. I just don't deviate from this strategy that I'm pursuing at all. I don't make any compromises around it. I'm never going to be like, oh, I got a 75K allocation here. Yeah, I'll do that one. I stick to my target check size range. I stick to my target ownership, which is an average ownership across the portfolio. It's not like every single deal has to be in there because I know that some are going to be higher, some are going to be lower. It's really comes down to a lot of what I learned investing at Anchorage prior to starting Looking Glass. I was surrounded by credit investors who took a very conservative approach to investing. Credit investors think”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“I would say you need to figure out the phenotype of your LP quickly. Figure out who the LP is that's going to understand your business. It's really no different than a founder who needs to find the VC that really understands their business. LPs are obviously a little bit more challenging to put into a box. But I've definitely can describe the LP who's a good fit for me way more easily now than I could three years ago. And so when I talk to other LPs and I ask for intros or when I talk to managers and I ask for intros, it makes it a lot easier for those people to say, oh, I know exactly who is a good fit for you.”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“I think I was trying to get to at least 50 to 60 percent of the fund before doing that first close. Now my rule of thumb to other founders would be get to 50% of your minimum viable fund size and then do the first close. If your minimum viable fund size is 10, you got to get to five, even if you're trying to get to 20. Your minimum viable fund size might not be 50% of your target, but if it is, effectively you're trying to get to 25% of your target to do a first close and then invest like you're not going to get beyond your minimum viable fund size because if you do, you're going to end up with a portfolio that's way too small if you end up with a number that's a lot lower than your target.”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“That was a huge lesson learned from Fun One. I was fundraising during Fund One through lockdown and peak COVID. I had a lot of GPs invest in Fund One and they said do a first close as soon as you have whatever number I had, which I felt like was way too small to do a first close on on fund one. And they're like, just get going, just put points on the board. Just be in the game. And I, frankly, probably waited too long to do an official first close on fund one.”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“I think that's the absolute hardest part of fundraising as a fund manager. LPs smell a bluff a mile away. That definitely is going to come and go. And they say, oh, what happened to that date? And so the way that I've tried to demonstrate a sense of urgency is really by demonstrating compelling momentum. So it's consistent updates and conversations with LPs to share progress and markups from fund one, sharing new investments on fund two, who has co-invested with me that they might be LPs in that fund already using those investors as catalysts for demonstrating that there's inertia with this fundraise and that they should be a part of it. That compounding of updates and progress to me is the best way to demonstrate less of a sense of urgency and more that like I'm putting one foot in front of the other every single day. There are other people that are getting these updates too, not just you.”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“I've broken it for the right people who have the right network, who I really wanted to be involved in helping me get off the ground and build this business.”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“One of the biggest surprising things to me from over the course of building this firm is how people interact with money and make decisions around money, particularly individuals. The way that people think about investing in relation to their net worth, in relation to risk is fascinating. I've been shocked by the dollar amounts that some people have committed, both way smaller than I expected and way larger than I would have anticipated. It's generally indicated to me that you”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“Higher net worth individuals, more official family office types in fund too, that either didn't know when I was raising fund one or that wanted to track for fund one, and then newer fund to fund style investors that have emerged.”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“Hundreds. I've had hundreds of meetings with potential LPs ranging from the individual who wrote a 10 to 25k check into fund one to the family office that's done 10% of fund two and everything in between.”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“Before I started the process, I spoke to our mutual friend Samil Shah. Samil said the only people that are going to invest in your first fund are people that know you. I was like, I invest in founders all the time that I don't know. And he goes, this is different. He was almost 100% correct. Every single LP in fund one is someone that I knew personally over my prior years and years in and around the early stage tech ecosystem. If they weren't an LP, I knew before the Fund one process, they came from an intro from an LP who said yes to Fund one and then introduced me to somebody else. That has continued to be the case for Fund 2 as well.”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“No, of course not. My general view is that a financial model, if a founder so chooses to have one, it's a great level of insight into what they think the drivers of their business are and the levers that they can pull over time. But ultimately, I am fully aware that what I'm underwriting is 100% going to change and not occur as it was. I mean, I was an investment banker in a previous life. I know I can make a model say whatever I want. It doesn't matter what the model says. I just want to understand that the founder knows what the drivers of their business may end up being over time.”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“If it's required to start to get a conversation going for sure, either through a warm intro or because someone insists upon it, I've never walked through a deck on a call. I don't think that's really necessary as an investor in the same way that it is as a founder who has like screenshots and competitors to show and revenue charts. Like, I just don't think that that's as necessary as a VC.”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“I do sometimes wonder if there's like a paralysis by analysis. My philosophy as an investor and founder of this fund has always been to err on the side of providing more information to LPs. And if they so choose not to engage in it, then that's fine. It's the same way I tell founders after a first meeting, if they have a data room, just send me everything. I'd rather not be drip fed one piece of material after another and rely on me to ask a question that unlocks another door for me to see something, just throw it all at me and I'll pour through it.”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“That's a big lesson learned from fun one. I started having conversations and people were like, send me sub docs. I was like, oh no, I don't have sub docs ready. Now I air on the side of formality in terms of data room and materials. And I write an investment memo for every single investment I make, even though it's just me reading them. So every single one of those investment memos is in a data room that LPs can pour over and see my thought process at the time of investment. Every LP update I've sent out, I write a very lengthy letter every eight weeks that's very transparent on every company in the portfolio to LP. So potential LPs can see how I communicate transparently and regularly with my investors. And then obviously, of course, tech and an appendix to that deck and statement of investments and all the necessary legal docs.”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“Of smaller fund of funds and family offices and high net worth individuals who sort of look and act like a family office, but they don't have a family office sort of entity created yet. That's generally the majority of LPs.”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“20 is definitely not the easiest fun size to raise, for I'll put it that way. But really, it came down to, I'm trying to build a firm over the next 20 to 25 years. And I wanted Fund Two to be an iterative step up from fund one. And I felt like going from eight and a half to 20 allowed me to incrementally increase my check size in such a way that I was very comfortable doing so. LPs don't require a major leap of faith to believe that I can go from writing a 325k check to writing a 425k check on average, promoting 4.2% on average, toning five and a quarter to five and a half percent on average. These are baby steps in terms of increases that I felt like were very easily underwritable. Now, in terms of LP type, yes, that fund size definitely plays below the sort of normal threshold of institutional LPs. I generally think 40, really 50 is kind of the floor for a lot of those groups. And so I'm living in a world.”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“That's part of the strategy. I don't operate amongst the regular way seed investors or at least the multi-stage seed investors that have driven up the price of seed valuation significantly and are still doing so. My strategy is to make sure that I'm part of the first money into rounds, ideally, first yes, I literally own the domain first yes.vc. It redirects to the looking glass website. The deals that I've done over the course of Fun2 have been six million cap, 8 million cap, 8 million cap. And I'm stretching on one now, which is an eleven million cap. This is all first money into companies over the last eight months.”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“I think you can if the ownership is. And return the fun with a billion dollar outcome. Fundamentally, I believe if you're investing out of a $50 million fund or smaller, a billion dollar outcome has to return the fund or this job becomes even harder than it already is. All things considered, I would have rather had more like 27 companies than 24, but I was operating within the constraints of a smaller fund size. With fund one, I need to own 86 BIPs at exit of a billion dollar outcome to return the fund. My average ownership was close to 4% on average at entry across fund one. So even if I get diluted by 60, 65%, which I expect to over the life of that investment, I'll still own well north of 85 BIPs. In fact, if I get diluted by 60%, I'll actually own 1.7%. So a billion dollar outcome, 2x is my fund.”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“The fund that I'm currently investing out of now is a $20 million target. And really, I chose that size because it felt like it was incremental from fund one. So fund one was a little over $8.5 million investing $300 to $400K precede in very early seed rounds. So really $750K to $3 million rounds. And so I felt like the step up from eight and a half to 20 was iterative enough for me to essentially go from 300 to 500K, really 400 to 500K incremental step up and check size, allow me to invest in 30 companies versus 24, but still maintain the exact same entry point.”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source
“Definitely an illusion here to Lewis Carroll and Alice in Wonderland and sort of through the looking glass. And I think the fantastical elements that are necessary for what some of these founders are building, the sort of suspension of disbelief that's required for investing in something that's pre-product, pre-revenue, pre-everything. Sort of the idea that if you put down a pros and cons list for virtually every investment I've made, the cons would significantly outweigh the pros, but yet I've still said yes 27 times in the last nearly three years. That's where the name comes from.”
2023-05-29 · The Twenty Minute VC · 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital · IDENTIFIED FROM THE TRANSCRIPT · source