YouSaid · the spoken record

Lindel Eakman

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28
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2016-10-12
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2016-10-12
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  1. “And send out updates to their investors on the state of their business, investors in turn can then in real time help their founders with introductions, findings, funding, f”

    2016-10-12 · The Twenty Minute VC · 20VC: Why Many VCs Fail To Raise, Why LP Compensation Is A Massive Problem & Why Fund of Funds Will Become More Prominent with Lindel Eakman, Managing Director @ Foundry Group · IDENTIFIED FROM THE TRANSCRIPT · source

  2. “Of a great opportunity getting you the help you need to get you where you want to be you work hard for your money and it should work hard”

    2016-10-12 · The Twenty Minute VC · 20VC: Why Many VCs Fail To Raise, Why LP Compensation Is A Massive Problem & Why Fund of Funds Will Become More Prominent with Lindel Eakman, Managing Director @ Foundry Group · IDENTIFIED FROM THE TRANSCRIPT · source

  3. “Join me, and again, a huge thanks to his partner Bradfeld for making the introduction today without which the interview would not have been.”

    2016-10-12 · The Twenty Minute VC · 20VC: Why Many VCs Fail To Raise, Why LP Compensation Is A Massive Problem & Why Fund of Funds Will Become More Prominent with Lindel Eakman, Managing Director @ Foundry Group · IDENTIFIED FROM THE TRANSCRIPT · source

  4. “I don't think we've announced this yet, but I'm happy to. We are investing with Resolute Ventures. It is a combination of real experience and portfolio strategy. So they nailed the portfolio strategy question in our first phone call. It was a very differentiated conversation and one that stuck with me. And that's why I took the time to meet a second partner. It's Mike Hirschland and Renan Bar Cohen. The way that those two interact together back to my idea of partnership dynamics, I think is great. And then it really just struck all the boxes.”

    2016-10-12 · The Twenty Minute VC · 20VC: Why Many VCs Fail To Raise, Why LP Compensation Is A Massive Problem & Why Fund of Funds Will Become More Prominent with Lindel Eakman, Managing Director @ Foundry Group · IDENTIFIED FROM THE TRANSCRIPT · source

  5. “Give you a double bonus there. The creature from Jekyll Island is important to understand the Fed monetary system in our world today might also give you a sense for my politics. For fun though, Brad and I have the same taste. One that just has stuck with me. I cannot shake from my head as demon by Daniel Suarez. It's near-term science fiction. It's all too real. It's especially around AI.”

    2016-10-12 · The Twenty Minute VC · 20VC: Why Many VCs Fail To Raise, Why LP Compensation Is A Massive Problem & Why Fund of Funds Will Become More Prominent with Lindel Eakman, Managing Director @ Foundry Group · IDENTIFIED FROM THE TRANSCRIPT · source

  6. “There's a lot of hubris in the room when GPs come in. I think the mistake they make generally is putting too much in a pitch deck and not limiting and not taking their own advice. They'll tell a company to have a pitch deck with 10 slides in it. And yet they'll show up with a 45 page deck and expect to march through it in a fundraising meeting.”

    2016-10-12 · The Twenty Minute VC · 20VC: Why Many VCs Fail To Raise, Why LP Compensation Is A Massive Problem & Why Fund of Funds Will Become More Prominent with Lindel Eakman, Managing Director @ Foundry Group · IDENTIFIED FROM THE TRANSCRIPT · source

  7. “Hasn't led me astray yet, so it's hard not to mention Fred and certainly Brad, my partner. I think that Dixon and Evans from Andreessen put out good content. I like vertical newsletters. One people may not know about is Riley Brennan. He has a small fund, but he also puts out a great newsletter called Future of Transportation.”

    2016-10-12 · The Twenty Minute VC · 20VC: Why Many VCs Fail To Raise, Why LP Compensation Is A Massive Problem & Why Fund of Funds Will Become More Prominent with Lindel Eakman, Managing Director @ Foundry Group · IDENTIFIED FROM THE TRANSCRIPT · source

  8. “I think it's actually focus. Small funds and helping GPs raise small funds, that's different and it's hard. There are a lot of them and differentiating is challenging.”

    2016-10-12 · The Twenty Minute VC · 20VC: Why Many VCs Fail To Raise, Why LP Compensation Is A Massive Problem & Why Fund of Funds Will Become More Prominent with Lindel Eakman, Managing Director @ Foundry Group · IDENTIFIED FROM THE TRANSCRIPT · source

  9. “Wow, that's a good one. There are many more to come at the annual meeting every year. We have a continuing theme of trying to sneak silly phrases into the presentation. And there's been some chicanery around that. And that will certainly continue. And I'm certain that I will be the target of it.”

    2016-10-12 · The Twenty Minute VC · 20VC: Why Many VCs Fail To Raise, Why LP Compensation Is A Massive Problem & Why Fund of Funds Will Become More Prominent with Lindel Eakman, Managing Director @ Foundry Group · IDENTIFIED FROM THE TRANSCRIPT · source

  10. “I think there are a lot of things that LPs could do better. Compensation structures are certainly an issue. Public disclosure is always a challenge that we face. In general, I think that we need to appreciate the importance of the pools of capital, the large pools of capital, and the importance of what they do for the economy and what they will do for those people they actually support. And if those pools are important, then we should certainly be mindful of the talent we're able to attract when we're looking at who's investing those pools.”

    2016-10-12 · The Twenty Minute VC · 20VC: Why Many VCs Fail To Raise, Why LP Compensation Is A Massive Problem & Why Fund of Funds Will Become More Prominent with Lindel Eakman, Managing Director @ Foundry Group · IDENTIFIED FROM THE TRANSCRIPT · source

  11. “Obviously varies. To summarize it though and generalize, LPs are generally compensated on a cash basis, compensation plus a bonus. And that bonus is often derived from some combination of return performance over a period of years. Back in the day, we did some studies on this. The most common are sort of three to five year time periods. And you look at an IRR because frankly, you don't know whether someone's a good inventure LP in three years. You certainly know it in five, eight, or 10 years.”

    2016-10-12 · The Twenty Minute VC · 20VC: Why Many VCs Fail To Raise, Why LP Compensation Is A Massive Problem & Why Fund of Funds Will Become More Prominent with Lindel Eakman, Managing Director @ Foundry Group · IDENTIFIED FROM THE TRANSCRIPT · source

  12. “I come from a large institution background, and I think we were one of the better staffed, large institutions out there. And even in that scenario, it was difficult to focus on venture because you're not able to put large checks to work. And in some ways, that's part of the problem I'm solving here with Foundry Group Next is solving some of that challenge for some of those larger institutions recognizing what I had seen myself. I do think you're going to see institutions continue to support venture. That shows up in the fundraising numbers. I don't think that I'll say writ large North American institutions do a great job of incentivizing their staffs. Probably a whole nother podcast with you on that, but the population here in the U.S. has a real concern about retirement accounts and how those are invested.”

    2016-10-12 · The Twenty Minute VC · 20VC: Why Many VCs Fail To Raise, Why LP Compensation Is A Massive Problem & Why Fund of Funds Will Become More Prominent with Lindel Eakman, Managing Director @ Foundry Group · IDENTIFIED FROM THE TRANSCRIPT · source

  13. “Many of our GBs are newer. They appreciate that we can be available to help them with tactical advice on a company financing portfolio construction, when we spend a lot of time on, and things like that. I also think LPs can serve an important role for GPs in building their own businesses, and we want to be seen as a mentor and advisor. And that includes helping them with fundraising.”

    2016-10-12 · The Twenty Minute VC · 20VC: Why Many VCs Fail To Raise, Why LP Compensation Is A Massive Problem & Why Fund of Funds Will Become More Prominent with Lindel Eakman, Managing Director @ Foundry Group · IDENTIFIED FROM THE TRANSCRIPT · source

  14. “Well, first, I think branding does matter. I think LPs have historically been prized for permanent capital, for consistent staffing. They were prized for a commitment to the asset class. And frankly, limited fundraising hassle. I don't think any of that changes. I will say a challenge for venture writ large and a challenge for LPs is that institutional LPs are changing. They're all struggling with staff turnover. Many have vacillated in their commitment to venture. Because of that, I think you've seen venture funded funds take a more high-profile role. I mean, I'm certainly not the only one who appears to make the jump to private capital. I'm just the latest. I mean, think of Duvos, think of Dew and Elizabeth at Horsley. I mean, those are people that came out of the institutional background. I think the GPs are recognizing, appreciating the commitment, but when it comes to branding, in our case, we differentiate because of our access to an experienced LP and my background, but really it's about access to my partners and their GP perspective.”

    2016-10-12 · The Twenty Minute VC · 20VC: Why Many VCs Fail To Raise, Why LP Compensation Is A Massive Problem & Why Fund of Funds Will Become More Prominent with Lindel Eakman, Managing Director @ Foundry Group · IDENTIFIED FROM THE TRANSCRIPT · source

  15. “You know, it's not a specific answer that you're looking for because each one is coming at it from a different strategy, from different platform. It's an awareness and a thoughtfulness of how they're going to build a portfolio because I think if you have a plan around portfolio strategy and an understanding of how the pieces fit together, that allows you to be a better investor. I think that allows you to be more thoughtful in which deals that you do and which deals you avoid.”

    2016-10-12 · The Twenty Minute VC · 20VC: Why Many VCs Fail To Raise, Why LP Compensation Is A Massive Problem & Why Fund of Funds Will Become More Prominent with Lindel Eakman, Managing Director @ Foundry Group · IDENTIFIED FROM THE TRANSCRIPT · source

  16. “I mean, there are certainly changes. My mandate's different. The portfolio construction is different. So it's definitely different investments that we're targeting. I think, though, that you think about risk differently every time you have a different portfolio strategy. I think many GPs miss on portfolio strategy. That's probably the place that when we ask questions, GPs just flail about, especially newer or emerging GPs. And they're unaware of the risk characteristics that are different in a total portfolio versus individual position. And so in our case, we have a very different portfolio strategy than I did at UTIMCO. That's the difference. The really big difference, though, of course, is having partners that can underwrite a portfolio, partners that have a 20-year history in the venture market. They know previous mistakes and they know some of the skeletons that are buried in the closets.”

    2016-10-12 · The Twenty Minute VC · 20VC: Why Many VCs Fail To Raise, Why LP Compensation Is A Massive Problem & Why Fund of Funds Will Become More Prominent with Lindel Eakman, Managing Director @ Foundry Group · IDENTIFIED FROM THE TRANSCRIPT · source

  17. “Well, I think certainly we're a case in point. So it's hard to argue against it. I will say, though, that I very intentionally chose this platform for that model. I don't think most platforms lend themselves to it. And certainly traditional institutional LPs, I don't think they make great direct investors. And in general, they aren't able to attract the most talented direct investors to their platform. Certainly it was always a challenge at UTemco to get the very best talent and keep them. It's definitely the case when you go more into the public realm with the larger institutions.”

    2016-10-12 · The Twenty Minute VC · 20VC: Why Many VCs Fail To Raise, Why LP Compensation Is A Massive Problem & Why Fund of Funds Will Become More Prominent with Lindel Eakman, Managing Director @ Foundry Group · IDENTIFIED FROM THE TRANSCRIPT · source

  18. “Access is just as important for VCs. So I would argue with Mike about that sum. I always look at sourcing advantage as what I call it, but that's access by another name as to, you know, why do deals come to you and why do you get access to a given set of entrepreneurs who are really the talent in all of this? When you think about the difference between a VC and an LP, I would argue what you're doing is just one level up. It is more diversified so that you certainly, but you're still picking a team against a given strategy or mandate, and it's something they haven't built yet. It's something they're saying they're going to build because you don't invest in existing funds or old funds. You invest in the new fund.”

    2016-10-12 · The Twenty Minute VC · 20VC: Why Many VCs Fail To Raise, Why LP Compensation Is A Massive Problem & Why Fund of Funds Will Become More Prominent with Lindel Eakman, Managing Director @ Foundry Group · IDENTIFIED FROM THE TRANSCRIPT · source

  19. “Well, I think foundy is on the record saying that we're not going to transfer this through a generational transition. And frankly, if you look at this, it's very difficult to do if you look at the industry. It's been screwed up way more than it's been done right. And I think that's a hard thing to do. So I'm really looking at who the current principal decision makers are today and how committed they are to the current fund and to each other to continue working hard.”

    2016-10-12 · The Twenty Minute VC · 20VC: Why Many VCs Fail To Raise, Why LP Compensation Is A Massive Problem & Why Fund of Funds Will Become More Prominent with Lindel Eakman, Managing Director @ Foundry Group · IDENTIFIED FROM THE TRANSCRIPT · source

  20. “Case too with a very balanced partnership. Importantly, Fred and Brad had experience in history together. And I think if you were to say, what is it I pick on? It's always about partnership dynamics and decision making. And if you eliminate all the noise, and frankly, there's often a bunch of male posturing nonsense in these venture capital firms. If you can get rid of all that noise, you end up with a way better chance of making good decisions.”

    2016-10-12 · The Twenty Minute VC · 20VC: Why Many VCs Fail To Raise, Why LP Compensation Is A Massive Problem & Why Fund of Funds Will Become More Prominent with Lindel Eakman, Managing Director @ Foundry Group · IDENTIFIED FROM THE TRANSCRIPT · source

  21. “I think timing was important there. And USV was actually my first venture investment. So certainly I got lucky in making that a part of it. And luck undoubtedly plays a role in all of it. I do think it helped that I was young. I was 29, 30 years old at that time. I grew up with computers. I had an Apple IIGS. It was my first computer. It was great. I still think my dad for buying that for me. That was back in AOL chat room times. So I understood the network thesis that made sense to me. Yep, the fun size was right. And frankly, we could get a big piece if we moved early. It was helpful that it wasn't a quick round. And I think we had the opportunity to get 20% ownership. And that's what we wanted, just like all the VCs do in companies at UTemco and frankly today. We like being an important part of the capital base. The big thing, though, for Fred and Brad and USV was the way they balanced each other. And that's the thing we always look at is partnership dynamics. If you look at Foundry, that's certainly the”

    2016-10-12 · The Twenty Minute VC · 20VC: Why Many VCs Fail To Raise, Why LP Compensation Is A Massive Problem & Why Fund of Funds Will Become More Prominent with Lindel Eakman, Managing Director @ Foundry Group · IDENTIFIED FROM THE TRANSCRIPT · source

  22. “So for the foundry guys, it actually ties back to Fred and the gang at USV, so they're definitely related. I was at Fred's annual meeting back in probably the fall of 2006 I had flown up, spent a long, long day meetings after meetings and ended up at a dinner where this guy Bradfeld was softly pitching me. He had been strategically seated next to me, and I was like, I got it. It's venture. It's Boulder. My uncle lives in Boulder. I'll come see you guys. And we left it at that because I certainly didn't want to hear another pitch over dessert.”

    2016-10-12 · The Twenty Minute VC · 20VC: Why Many VCs Fail To Raise, Why LP Compensation Is A Massive Problem & Why Fund of Funds Will Become More Prominent with Lindel Eakman, Managing Director @ Foundry Group · IDENTIFIED FROM THE TRANSCRIPT · source

  23. “Thanks, Michael. You know, I would say alpha is a funny word. And as an institutional investor, you bandy that around a lot. I think, though, to be clear, to get alpha, you usually have volatility. And when we think of the small early stage funds, yeah, I think you are given that opportunity to have outsized alpha when basing it's the return profiles, but you can't have significant amounts of alpha without volatility.”

    2016-10-12 · The Twenty Minute VC · 20VC: Why Many VCs Fail To Raise, Why LP Compensation Is A Massive Problem & Why Fund of Funds Will Become More Prominent with Lindel Eakman, Managing Director @ Foundry Group · IDENTIFIED FROM THE TRANSCRIPT · source

  24. “You know, we really haven't seen this differently from our early stage funds or really any other market signal, you know, from existing investors. So in an early stage fund, you will often participate in multiple rounds. So you have this same challenge whether or not you have an opportunity or a select fund, as they're called. And they're quite popular now. When we see something working, we try to get more of it. And the truth is that market dynamics will really dictate those outcomes around the financing. And we just haven't seen it, but I don't think a separate fund has changed any market perceptions around a given financing.”

    2016-10-12 · The Twenty Minute VC · 20VC: Why Many VCs Fail To Raise, Why LP Compensation Is A Massive Problem & Why Fund of Funds Will Become More Prominent with Lindel Eakman, Managing Director @ Foundry Group · IDENTIFIED FROM THE TRANSCRIPT · source

  25. “When you think about our portfolio here at Foundry, it's very different from what I had previously done. And Foundry were focused on taking our fund and we are investing that in a mix of direct deals and portfolio fund managers. In our case, we're putting 25% of the fund into the manager side of that. We are excited about that piece. And then 75% in directs that come both from those underlying managers. They may come from our themes outside of those managers and also, of course, from our early stage funds.”

    2016-10-12 · The Twenty Minute VC · 20VC: Why Many VCs Fail To Raise, Why LP Compensation Is A Massive Problem & Why Fund of Funds Will Become More Prominent with Lindel Eakman, Managing Director @ Foundry Group · IDENTIFIED FROM THE TRANSCRIPT · source

  26. “Well, you know, I got lucky originally at you Timco by joining the private equity team where I was more suited. And that really was my friend Darren joining the hedge fund team. I joined the private equity team and we actually found a place to live on Lake Austin. So that everything was working out great. And in actuality for 13 years, UTemco was a great place for me. So I'm very thankful for the opportunity I had there. But really, when you think about Foundry, I mean, Brad Jason, Seth, and Ryan are my friends. I mean, who doesn't want to work with their friends? I don't think that changes. It's also the case that I get most excited personally about technology, so it was natural for me to focus there. And yeah, it helped that my best returns were adventure too.”

    2016-10-12 · The Twenty Minute VC · 20VC: Why Many VCs Fail To Raise, Why LP Compensation Is A Massive Problem & Why Fund of Funds Will Become More Prominent with Lindel Eakman, Managing Director @ Foundry Group · IDENTIFIED FROM THE TRANSCRIPT · source

  27. “An interesting thing when I look back at that time is that funny enough, investing kind of at any level is about having the ability and actually the fortitude to always say no without fear of missing out and to only say yes when everything lines up. And I think that's something that even as an intern, I began to learn by getting so many repetitions on how to say no to hedge fund managers and actually for the audience members, Howard Marks wrote a book. He's out of Oak Tree Capital Management. The most important thing. I think it's a very digestible book on these ideas.”

    2016-10-12 · The Twenty Minute VC · 20VC: Why Many VCs Fail To Raise, Why LP Compensation Is A Massive Problem & Why Fund of Funds Will Become More Prominent with Lindel Eakman, Managing Director @ Foundry Group · IDENTIFIED FROM THE TRANSCRIPT · source

  28. “Thanks, Harry. I'm really glad we made this work. So, talk to me, Lindel. How did we make the way into the world of LPs? What's your kind of entrance into the industry? I've yet to meet anybody that this was a childhood dream for. It'd be an interesting person indeed. I totally backed into this. Friend of mine found an internship. It was a paying internship, so those are good at UTEMCO during business school. I like the idea of income. I also liked the idea of finding out more about institutional money. As a young professional, even as a kid, I had been exposed to retail money, you know, schwab, fidelity, and the sort here in the US. But I hadn't really thought about who managed the pools of capital like retirement accounts, insurance or endowments, or even how foundations are actually funded. So for me, that was an interesting piece of it. The actual internship was finding artful ways to say no to hedge fund managers. It was a lot of fun. My friend Darren, who had found the internship for us, we sat next to each other goading one another on the phone.”

    2016-10-12 · The Twenty Minute VC · 20VC: Why Many VCs Fail To Raise, Why LP Compensation Is A Massive Problem & Why Fund of Funds Will Become More Prominent with Lindel Eakman, Managing Director @ Foundry Group · IDENTIFIED FROM THE TRANSCRIPT · source