YouSaid · the spoken record

Hussein Kanji

lines on the record: 117
first: 2025-01-20
most recent: 2025-01-20
sittings or episodes: 1
sources: podcast

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“So I think if you're going to try and do 20 of these, your check sizes are going to be three, four, five, and then sometimes these jumbo seeds are now up to 10. Like Ed Sim has been able to done a bunch of work on this showing what the path is of these. And they're more and more common, by the way. The jumbo seeds up six to seven times in volume than they were a couple of years ago. And the seed rounds that are 5 million plus are a fifth of them.”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“Correct, which is why we look at like on the aggregate, like if all the cohorts, like if you've missed something and someone flags it, we generally have a lot of humility inside the firm to be like, yeah, I didn't catch that piece. Like, I get it. I don't know if I really want to do it.”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“So we do it on the basis of is there a red line? Like, is there some flag? I mean, red lines are wrong. Is there a flag that we can throw down that says it doesn't make sense? Which is I looked at the cohorts. I looked at the early cohorts. And, you know, all of those cohorts are deteriorating. So you thought it was really good. It's growing exponentially, but the data suggests that maybe that's not the case. By the way, that's a real world scenario. I got super excited about company in Portugal and one of my partners looked at it and was like, Hussein, like, you missed a trick here. And by the way, this is why I love working in partnerships. I think partnerships are way better than solo GPs because you get this error correction mechanism from other smart people. But if the error correction mechanism is they're blocking you for no good reason, like as and they're just running interference on you, then it's really that.”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, because we care about ownership, but no one comes to the check. Like, we often have this debate where most of our deals, like I said, are contrarian and there's contrariness even within the table. So like we don't get it. The rest of group doesn't get it. We don't see an obvious reason not to do it, but like we don't see it. And some of our best deals are usually like this. And so instead of then downsizing the commitment, we're like, okay, we don't really get it, but they're raising three and a half. Like if they're going to really try and make a run at this, maybe I should have like four or five. Maybe you should go in there and buy like an extra few points of equity for that money. And I think that's the right way. Like if you're in this power law world, that's the right way to play the power law. But that requires a fund size that's bigger than the hundred that we initially were thinking a few years ago.”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“Detrimental. Yeah, yeah. But there is a reason for companies to raise the right amount of capital at the stage there. And then too much capital, I think, becomes too much of a wash. But the big problem that we have in Europe is we raise, but we raise small rounds. So people will take the risk, but they'll mitigate the risk by writing a small check. And it's weird because the inverse should be if you believe in this thing. Like if you believe as a seed investor at a million and you have the fund size to be able to do this, you should believe at three. You should believe at four. It doesn't make sense to believe at 30. But there is a number where you're freeing up the capacity of the founder and of the company in order to try and achieve greatness. And you're shooting for greatness as fast as possible. And I don't think people grock this fully in the European venture ecosystem.”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“Outlier is very, very, very, very small. Kind of makes sense if that seed round goes up to like 10 million, the odds between 5 million and 10 million, if the seed is five versus the seed in 10, basically double. So getting companies.”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“And that was a mistake. But I do think I looked at the date on this. There is a correlation between how much money goes in to a company and what the probability of success is. And this is the way I think if you're going to be contrarian, and we take pride in being contrarian, you have to make sure your companies get capitalized. Because if they don't, they don't have it. The average is about like 300 million to get to unicorn status. And then there's some companies that do it for like 200 million. But you have to raise that kind of quantum of capital. And the biggest structural problem that we have in the UK and Europe, the conversion rate between seed and series A, series A to Series B, series B to series C, is basically these days on par with the US. But the capitalization of our companies from seed to series A, Series A to Series B is way under what happens in the US. And there is a statistical correlation between if a seed round raises like 100K, the probability of it becoming an”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“I thought the Tiger playbook was actually really fascinating in 21. Let me not sell a product that's designed for returns. This is how I view Tiger at the time. I will sell a product for a capital deployment and I'll just buy the index. I'll hoover up not $50 million commits, but $200 million commits who have to deploy into tech and I'll just buy the index. It didn't work, right? Because I think they were overpaying on the market. But I could understand that the appeal to the LP base, which is look, where am I going to put this money? I've got a group that's going to take not a little bit of money, a lot of money, and be able to play the market for me.”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, this is the other problem that I think we've had ever since 21. We have had a number of people enter the industry. We used to have like 10,000 people doing kind of this tech investing venture, et cetera. It's gone up to like 35,000. It's come back down to the historic norm, but there are a lot of people doing this stuff. And I don't know if people know how to allocate capital to who's good, who's exceptional, who's average.”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“So, okay, pension funds now decide to allocate capital to venture. Who's going to do it? Where's the talent base in the UK of experienced LPs who know how venture works, who know what kind of funds to bet on?”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“So I looked this up. So the pension funds in the UK, so the defined contribution scheme about 10% of the capital in the pension funds is invested in the top tech names in America. 10%. And about 5% of the pension funds is invested in UK equities. So they're actually pretty long tech as far as pension funds go. They are not inventure. I have a genuine worry. It is really hard to be a VC, it is really hard to be a founder. It is, I think, also reasonably hard to be an LP. Like if you're coming in from scratch with no knowledge, I don't know if you really know what you're doing. It takes money and time to train a VC. I think it takes money and time to train an LP.”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“I think in Europe they've had two. I have a controversial take on this, which is the worry about governments funding, especially at those kinds of concentrations, is you end up with governments having market power. And I am a big believer in capitalism. I'm a big believer in the markets. I think if you have someone like the EIF, where you're 30% of the aggregate capital of the LP commits, it's too big. What you should really have is what happened with AT&T in the US, where they broke it down into the bells.”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“You got to get a fund. And you got to get the, I would argue you have to get the right size fund. And, you know, nowadays we don't have this”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, we got British patient capital, which is BBB. So instead of EIF, we got BBB. And BBB was like a good chunk of the fund, like 40% of the fund.”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“We were trying to get back to 100. We thought 100 was the right number for a seed fund back then. We now think the closer number is like 150 to 250, but back then it was about 100. If you're going to play this game well, that's about the size that you need to be. So we went out for 100. We got a commitment from the European Investment Fund. It's a long process with the EIF. And they're like the anchor LP of record in Europe, especially in that era. And we asked them about Brexit and they said, we don't. There's no such thing. Article 50 hasn't been invoked. We got to the final, we got to terms. We hadn't gotten into legals or doing the jurisdiction work. And Article 50 got invoked. And everyone who had a check or a commitment from EIF at that point felt it. Seedcamp got one of the first calls they tore up the document. And all of us lost at EIF commitment because they were no longer able to invest in the UK. And then we had another big insurance company who was like the co-investor, the co-anchor basically. We lost the insurance company's process. We basically reset back to zero to go do the fundraise start.”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“Going to be great. It's better, but marginally better. It was 28 months. So we went on the fundraise. We finished up Fun One. It was a 2013 fund somewhere around 17, 18. We went back out into the market to go raise.”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I mean, I think who wants to work with people who are too controversial or too unpopular? I mean, especially when things are going up, right? You want people who are going to be cheerleading as much as possible.”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“I bought a frying pan two holidays ago from my wife, and it never turned up. And I complained, and then eventually turned up. And apparently the response because I complained has been to blacklist me. I'm not allowed to ever buy fry can from this company again.”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“I'm kind of in the same camp. There's no upside from arguing with people. I mean, argue with your founders who are in your family, right? You're an investor. You're along. But like, there's the outside world. And by the way, one of my founders says your single biggest flaw right now is you just have an overactive and one of our LP says the same thing, overactive Twitter X.com. Like, why are you even on this thing?”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, until there's a hiccup. And there are hiccups. People forget even some of the massive outcomes in our industry have had hiccups. Some of them did not. Google did not have any hiccups. Maybe now it has a hiccup at some regulatory challenges, but did not have a hiccup. Facebook had hiccups. That was not easy to raise some of the rounds at Facebook. Like there's a reason why Microsoft ended up on the cap table. Like, companies, they don't have a linear path from like zero to success. It looks like that. You stretch out the curve and you miss all the volatility. It's like your glucose monitor. You see ups and downs on your glucose monitor and then you see the trend line and the trend line when you eat starts going up. But you do see ups and downs. You forget about the ups and downs with history. But it's the ups and downs where you actually need someone around to have the call. And maybe not on the ups, but definitely on the downs.”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“Venture person. And if you're in a call option business, it's not worth the venture funds time to do all that stuff. So I think it depends if you're in bull cycles or bear cycles or kind of in-between cycles. And I think we're kind of sort of in between because we're bull on AI and then kind of bearish on a lot of other stuff.”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“So, if you'd asked me this question in 21, I said it was good. Because if the market's on the way up, if everything is pulling you up, all you need is money from the investors. You don't need all that much more, right? It's nice if they invite you to things, but like, you don't really need very much out of them. If the market stumbles, market stumbled in 22, there's a whole bunch of companies out there. By the way, if you look at the public markets today and you go look at all the SaaS companies between the first decile all the way up to the 10th ScienceL, if you break it up, everything other than the first decile is both growing and profitable. Both. Not either or. Both, which means that if you're a hundred million dollar vertical SaaS company that's private today and you're at that kind of stage and you're not one or the other, sorry, you are one or the other, but not both, you have a long way to go before you can go public. And those companies need to be like work needs to go into them. And you probably need, even if it's just a sounding board, someone to sit down and have that conversation with. And that's probably.”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“Complained that he was spending a lot of time helping these two kids out their role in their 20s at this point. The industry was really young, like it even is it is today, helping these kids out. He did that work for about a year before he got invited into Microsoft. He ended up owning 10% of Microsoft. And I got a lecture from my COO when I did this with another one of our companies where we did a next generation AI law firm that runs as a law firm. And obviously if you're”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't know if it's worsened, but I think we've gone to an era where people are writing checks and then letting things play out. There's a great transcript oral history. I do a lot of reading, right? So there's an oral history that the computer history museum doesn't in California. And they've gone back and interviewed all of the good and the great in our industry, like the founders of our industry, like the early venture capitalists. They did his oral histories like eight to 12 page like PDFs that you can kind of read. And if you read those transcripts, the way venture looked in the 60s and 70s and 80s and 90s looked really different than it does in like 2024. Back in the day, Dave Markhart was the only investor. He was at August. He was the only investor in Microsoft. Very few people know this. In the early days of Microsoft, Microsoft was structured as a partnership, not an ink. It was not a company. It was a partnership. And there was weird tension between Bill and Paul. And so they needed a third party to come in and clean it up. And his firm.”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“For us, is that this one feels like it might actually work out. The lesson for us is this hard work stuff, you need to be well capitalized to be able to do sometimes it's not our place. Like even if we could do the work, we don't have the capital base to be able to do these things”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“This, which you then think you can fix a lot of stuff. We had a company that hit a stumbling block. We doubled down, rolled up the sleeves, started working. The other investor with us was another big venture fund in with us on this company wrote it off. Weirdly enough, still turning up to the board so they wouldn't give up their board seat, so they wouldn't get recapped. So they defended themselves, but they wrote zero additional check. And the company needed about $2 million to turn itself around, and we were able to put a million, and we assumed if we did the first million, someone else would come in and do the other million and we kind of get it there. And ended up raising like 1.3 out of the two, ran out of cash. Business had turned around. Someone else, it went into insolvency. Someone picked it up and has been flying with it since then, right? Because all the heavy lifting got done. I got a call about two months ago. And this is weird. I heard that you were such a good board member for this company. I want to give you stock options and have you back in the company on the board. And I'm giving it to you for free.”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“We've learned a couple of things along the way. People don't really need much from your investors when things are going well. They need money and kind of get out of the way. Whenever there's a hiccup, usually end up picking up the phone and call your investor. And we're usually the ones working it. I think this is a big transition right now in the seed world. Sometimes when those calls are being made, it's not the Series A guys or the multistage funds that are doing the work. There used to be a time where you wrote the check as the seed firm, then the big boys came in, you exited politely, and the big boys ran the business and they did the board stuff. They did the hiring, firing of things had to happen. They did the acquisitions. But these days, with the growth of those guys, it's all call options for them, right? They will invest into something and see how it plays out so they can write the $30, $50 million check where it starts to get meaningful. Whereas for us, it's always meaningful. So we end up usually doing all of this heavy lifting. And as a result, there's a bias that comes in.”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“You never see that. I'm like understated. It's a good deal. You don't have to think about the founder sometimes or like the vision. You can just look at it from a numbers perspective and it's like, that's a pretty good company in the making. By the way, the delta is they'd gone from about a million a month at that point to about four million a month. It was like it was like super exponential growth in those early days. The company, when it got privatized, did $732 million of revenue. But when we invested, it was doing like 10K.”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“So we have a fairly trained growth investor on our team who is not in these companies, who can look at the data just on a pure database and give a view. So we basically assemble a different team other than the person leading the investment saying take a look at this, figure it out. But going back to that dark trace round that KKR did. Four million a month, so 48 million annualized, $400 million post, not pre-post. That's a pretty average million.”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“You mean what was the price point we came in? I think generally we made somewhere between one and a half to 3x net for our investors and a year to two. Hence why I looked at the IRR numbers. The IRR numbers are a lot more indicative because it was like there were very short holds. Like I said, I've been bullish, right? I mean, I've been very bullish. I'm on Dark Trace ever since I wrote the very first check because I saw the numbers. And I think this is the delta, right? When you see inside information, like you're close to the company, you know how it's doing and you see the buying opportunities and you see that they're fair their fair prices. These weren't like not overly inflated prices.”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“We have nowadays. So, in the run up to the DarkTrace IPO, we did a bunch of SPVs with our investors. We put more money to work in DarkTrace than the fund size of Fund 1. And we think the lowest performing IRR for us was net 66%. This is all realized, by the way. Net 66%. And the best performing was net 154%.”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“It's a big check to write out of the 89. You can't really go to LPs at the Series A and be like, I think this is the next big thing because it's like super early, right? And you have the company, all it's done is raise another round on the basis of some data. And so we ended up coming down in our ownership. We own about 13, 14% of the business as opposed to 18%. If that company goes where I think it's going to go, like I think in this company could be like the iconic company of tomorrow. That 5% is going to be really.”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“And the company said, We will give you 10 of that 40. Go raise it as an SPV from your investors. We think you will not get rich enough off of dark trays and you guys are doing so much work behind the scenes helping us that we want you to have.”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“No, not necessarily. So I think Dark Trace was not a hot company for a good chunk of its existence. In fact, I know that they talk to a bunch of the good and the great, and people were skeptical about them. And as a result, there were buying opportunities for us. The biggest regret we had in our Fund 1 was that the Series C, we brought KKR into the cap table of Darkrace. We introduced KKR and kind of brokered the introduction. There was a little bit of a miscommunication at one point, and we kind of put some social capital in to kind of smooth things over. KKRAP 40, it was a $40 million round at $400 million post on a company that was doing about $4 million a month in revenue and scaling. I would argue a pretty fair price.”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so we just had our AGM yesterday, and we have told most of our investors do not pay attention to TVPI for the time being because what we have been doing is proactively finding ways to put more money to work inside of our best companies. We know what the best companies are, it's about a third of the portfolio. And the second fund, that's now shifted to a little bit over 50% of our capital is in the top third of the fund. And in the third fund, it's getting closer to about 60, 65% of the top like the money is going into the best companies. And so when that happens, you're obviously putting money to work at like slightly depressed prices, right? You're not sending them out to get ridiculous markups because you don't want ridiculous markups on those companies. I mean, if the founder wants it, then we're along for the ride. But if you can find a way to not get the ridiculous markup and pull more money to work, you're buying more ownership. And if you're right, three, five years later, that will make a material difference in DPI.”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes. I mean, we have real distributions in the first fund. Like, it's distributed multiples back of the fund. So, like, DPI right now is a real topic, but a $28 million fund, even if you multiply it by multiples, doesn't turn out to be that much money for the LPs.”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“No, no, we sold out a delivery at the IPO. We thought it was like very fairly valued at the time. And so there we took a view. We took human judgment, right? We're going to sell. It was supposed to go public at three pounds. 90 went public at three pounds a share. Sorry, afterlock, it was three pounds a share. And then it came down to about one pound a share. So we look really smart for selling Deliverux on the eve of the lockup.”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, yeah, yeah. We made a lot of money on Dartrace, but we should have probably programmatically sold. And so I think the formula that we now have is at the time of the IPO, as soon as you're out of lockup, a third of it you sell, a third of it you sell six months later, and then a third of it you sell another six to 12 months after that. Just make it a formula because I think there's too much human error in this. And by the way, long term, I was right. But the markets and what you think long term don't always like, they don't always map one-to-one.”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“We sold it about a year later because we were coming up to the end of the life of the fund and we sold it around four pounds of share. So we left, or maybe not even four, I think closer to like 3, 350 and we distributed in species. And so I got a bunch of stock from Darkrace. And then I held all the way until the Tama Bravo acquisition, which is roughly around like six pounds.”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so our numbers for Dark Trace are way higher than our Deliveroo numbers, but we mistimed it. And then you get pressure when you don't sell at the top. And to be fair, like this is also like in 21 where everyone, you know, the market was just euphoric in general.”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so we've learned this the hard way. So in the case of Dark Trace, which we also took public, Dark Trace went public at £2.50, traded up to four. And by the time lockup was expired, it was around six. And we did not sell. And had we sold.”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“Weirdly no because I think in the UK it's very easy to convert common if you buy common as like secondary into preferred and then generally speaking like we're old we're old fashioned like we we think that the preference matters even in these large outcomes because there could be volatility downstream and yet so I don't think we've ever really bought common”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“Finding ways to take we can't we don't want to screw up the downstream investors who have to then write the check and we don't want to be cherry picking our best companies but we find ways to get more capital into these things and sometimes it's as easy as look whatever you're doing the next time around we want to do more than our pro rata and and it's a handshake agreement in other cases you know we'll do a safe on top of our first check like we'll find a way to put more capital to work when ownership is still really inexpensive in the grand scheme of things and build up the ownership”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“The first check is the first check, but we put a second check in, and sometimes it's by the third check. So it's between the first and the second check that we're really getting these kinds of ownerships.”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“So we've gone from a $28 million fund to an $89 million fund to a $214 million fund, and we haven't really changed all that much in the way of portfolio construction or what we do, but we are now super aggressive about doubling down. So if we see early traction in any one of our companies, we will figure out a way to put more capital in. And these days for our best companies and our best companies are much higher concentrations than our average company. We're getting closer to like 15, 20% ownership pretty consistently.”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“So we followed, but you know, as a 28 million dollar first fund, which is what we were, it's hard to follow your capital. And then we had a weird scenario in that particular company where our pro rata rights got taken away from us. And in the legal documents, they changed the definition of who would get the prorata, basically singling us out. There weren't that many other seed investors that owned above that bar and below the number that they set. And they forgot that we'd bought common stock from Angels. So we kind of politely didn't comment on the legals. And then the next round, we said we're going to exercise our parada. And then we were told, you can't. And I was like, yes, we can. And they realized the mistake and then they changed it. So like we did our parada in the seed round was called an A so that it was named by the letter A. So we did the B and the C, and then we didn't do the D, which is when DST came in.”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“Closing for fun one, so we couldn't do it, and then he launched, and to be fair, I was somewhat skeptical. I was like, the world doesn't need this problem, like this is a top 1% problem, like high income earners who have lots of disposable cash want to get food from restaurants and have a driver kind of come drop it off. I'm not so sure this is a mainstream product. And there were lots of other delivery companies back then. And then about four or five months later, it was very clear that he was the most methodical and thoughtful about the operations of the business, which is kind of the core. He built an Android stack that kind of tracked all the drivers. It was like real technology in it. And he was growing 5% week on week. And we came in, we said we'd do that. We'd write the first track. And then index came in and Gazum does.”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“We put in just around a million of that first round. Will came to me when he was still a grad student and doing his MBA. And I tried to talk him out of it. Most of the founders that we end up writing a check to are very missionary. They're not worried about money or fame or status. What they're trying to do is solve a problem that they think is really broken. That's what they want to bet their career and their life on. And that kind of becomes their project. And Will is a distressed debt guy. And I was like, you're going to make a lot more money in London working for a hedge fund or working for a bank. Why do you want to get on a bicycle or a scooter and like do these delivery drops? You realize this is about you doing the delivery in the early days as a startup. Like you're going to be taking food from a restaurant and schleppening it to someone's house. And he was like, it's broken. He's like, it pisses me off that I can't get food delivered. I tried to talk him out of it when he was an MBA student. He came to the summer. He was like, I'm going to do this round. We were in the middle of our”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“The best investment on paper was, I mean, not paper, like realized was Deliveroo. It was about 34x on the first track and whatever we deployed out of the fund. So how much did you put in?”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source
“No, we were pretty methodical in all the way through. The only time we probably maybe sped up was like 2021, but I think the whole industry was speeding up at that point. And then we slowed down intentionally in 22. So we do, we used to do about four to six a year.”
2025-01-20 · The Twenty Minute VC · 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji · IDENTIFIED FROM THE TRANSCRIPT · source