YouSaid · the spoken record

Nikhil Basu-Trivedi

lines on the record: 81
first: 2023-09-06
most recent: 2023-09-06
sittings or episodes: 1
sources: podcast

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“We perhaps add one or two equal general partners to our group who are refounders and co-owners of the firm with Mike and me, but most importantly, we've been able to already work with a handful of really special founders and companies where we've been their lead Series A or seed partner. And again, that probably in five to 10 years is not going to show up with distributions and DPI, but hopefully it shows up in just the fundamental nature of a couple of the companies that we work with and their scale and revenue, their business fundamentals, the impact that they're having on markets and on hopefully creating categories. Mike got to work with a woman named Katrina Lake, the founder at Stitchfix from five people to $10,000 people and from zero revenue to couple billion in revenue. And we hope that we get to work with a handful of Katrinas of Melanie Perkins from Canvas, of Jonathan Reges from the Founders Dogs. We hope to work with a handful of those folks over the next 10 years.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“Two of my heroes wrote a book together and so they have a ton of chemistry and that's Sir Alex Ferguson, the longtime manager of Manchester United and Sir Michael Moritz, the longtime partner at Sequoia. And I think what would be special about dinner with both of them, I've actually had dinner with Sir Michael, but sadly you've never met Sir Alex. I think what would be special about dinner with both of them is the chemistry they would have in that dinner, the fact that they are my two heroes and two of my favorite subjects would make that so much fun.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“Well done. Interesting. I'll put one that I miss right now working with, which is Vasnadarajan at Excel. Vasan and I were also at Insight together in the summer 2010. He left soon thereafter to join Excel, so he's been there, I think, for about 12, 13 years now. He led the seed round in Frame I.O. We did the Series A with them at Shasta, and so I got to work with Vas and founder Emory and the team there. You know, I pick Vas because I think he's not that well known, but he's got a great portfolio, a frame I always acquired by Adobe for $1.3 billion a couple years ago. A segment was another one that he did. But as a board member, he just asks really thoughtful questions. He sticks to just what's most important to prioritize as a company. And in my peer group, in sort of our generation, although you're younger than me and I'm younger than Vas, I still think of us as sort of the same generation. I think he's one of the best and probably hasn't gotten the credit yet deserves for that.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, they're thinking. They know that taste and they have great taste. They've kept discipline on everything. And as you know, they have done fabulously well from a return standpoint.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“Jesse Beiruti, who's one of the two GPs now with Brad at IA, was a fellow intern with me at Insight. And so we've known each other since we were 20 years old. And he's just incredibly thoughtful. And the thing I love about them is very few people know about them. They do very little on the external brand front, but they have crushed it. And I think they know what they are good at.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“From the guy who writes the dating blog, from the person in the firm that led the series A round, you heard absolutely nothing. And I was just flawed by that. And I just loved it. And so I just respect the hell out of those guys. And I do think they are one of the most collaborative and team-based firms, if not the most out there, which is, as you know, a North Star for Mike and me at Footwork. I'll say another that I think is less well known, which is IA Ventures.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“I think so, and I think it's because I'll never forget, for example, when Coinbase went public, every investor was on CNBC or wrote a blog post about it, whether they were on the board or just a tiny investor in the company or whatever relationship they had. Exactly. And yet you heard absolutely nothing from Fred Wilson on that day, absolutely nothing from USB on that day.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“I'll name two. USV doesn't get the credit that it deserves. It should be in that pantheonic greatness that sort of Sequoian benchmark I typically put in.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“That's right. So it's still, and hopefully, we have recycling as well, but it's still weighted to what's initial checks. But we do think there's value in having a little bit reserved.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“I've had a couple in my career, yeah. But I think the other reason is, especially as a newer firm, you want to be able to say that we can support the company in that next round. I do think there's validity to that in especially today's market where capital isn't as free, where folks are leading the next round maybe looking at whether the insiders are going to do their pro rado or not as a signal. And so we like to do our pro rado on the next round following ours. And then we pay back. If you think about our total fund, our total fund size is about 175 million, right? We think we'll make about 20 investments out of that fund. Average regional check of $4 to $5 million. So let's call it sort of 80 to $100 million on initial investments. And the rest is for follow-ons.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“A couple things. One is obviously there's going to be some cases where an entrepreneur is going to need a little bit of extra support to get to the next round. Of course, some of those may not be the right decision to make, but some of those I do think will be. The other thing is that I think in a world where...”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“Like doing our prorata in companies that quickly raised another round at a huge step up from where we first invested. Because fundamentally there was very little de-risk. And we saw this happen where company had raised a Series A from us and two months later they did a series, this is a real example. Two months later they did a series B at a 7x, 6 to 7x mockup. And we did our full pro rata and that becomes a very big position for you without that much being de-risked from the initial round.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“Fair enough Do you know what I mean? Yeah, I totally agree with you. I think dollars return. That's the thing that matters the most.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“People talking about AUM as a metric. I think AUM is the stupidest thing to talk about as a venture firm. Because back to what we were talking about earlier, small funds outperform larger funds. You really shouldn't be talking about how much capital you've raised. I'm okay with people talking about how much capital they've returned and how much enterprise value they've created. I just think talking about the aggregate size of all the funds that you've raised is a complete vanity metric.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“Too expensive, and there's just so much competitive noise, and there's also so much that, for example, in the large language model world, that the LLMs themselves will serve as a use case versus an application layer on top of those LLMs. I've heard there are several companies now that have grown rapidly in ARR and have now started declining in ARR as retention actually starts to affect these businesses because there's shown from folks who just try out products built on top of these LLMs because they're interested in the novelty of them, but then churn away. And there's also just the reality that as ChatGPT itself gets better in leveraging GPT-4 and other models as an example, it serves those use cases that some of the application layers on top of ChatGPT and GPT-4 have tried to serve.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“AI is being a very, very interesting category to, I honestly don't know if there's great AI first opportunities for us at Footwork to invest in. And that's because of just the insane hype cycle around it at the moment. We overrotated once again very, very quickly towards excitement here. But as I've thought through the venture investments here, I don't think that there's a lot of AI-first AI enabled companies that are going to be for us in this phase. And yet I do believe”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“No, and I believe the answer is no. It has not been the case for me. I want to preserve that window, for example, from 5.30 to 7.30 p.m. every day, every day that I can, because that's a really special window to do dinner time, bath, bedtime. I also spend time with her in the mornings because my wife works starting pretty early East Coast hours. I'm typically the one who takes our daughter to Montsouri in the mornings. It just means that I have to spend my 7.30 to 10 p.m. window working every day. That's the only way I found to be able to make up for some of those lost hours on work. Now, the flip side is I think I have to be present in those windows with her. So I hope that it does something better for my brain when I'm actually focusing on work, that I can be slightly more efficient. But I was also pretty efficient before. So I think overall, I am less productive.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“It's in the sense that my time obviously matters more than ever. And that's only going to continue being the case in my life. And so I have to believe in my bones when we make an investment decision. This is something I really want to spend time on. It perhaps used to be much more just about the capital and the economics. And now it's about that and time because time is such a precious commodity.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, it certainly makes things harder on a bunch of dimensions. The cliche thing that people say, which is you just have less time for each other, is absolutely true. But I also think it gives us purpose. Like we have this unified person who we're thinking about and co-parenting and co-working on. It's also strengthened our partnership in a lot of different ways. It's given clarity to kind of what matters.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“Absolutely, and yet it's an incredible gift too. We all get to live this life once. And so having that has been one of the great joys of having a kid.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“That's right and release something. They were willing to do it and then be patient. And I think there are multiple rounds. I think I talked to John Lilly at Greylock about this, multiple rounds that John was involved in before the product even launched, which is incredible. Hats off to Dylan. Hats off to those early backers.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“This comes back to my bias around wanting to see some early signs of product market fit before investing. And Figma did not have a launched product before its first couple venture rounds. So I give the folks that did those rounds, I think John Lilly at Greylock and Danny Reimer at Index, if I'm not mistaken. I give them a ton of credit. They saw the specialness, I think, in Dylan and in that market opportunity.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“About those things in sort of work and personal life at the level that he was thinking about. I've reflected on that a bunch of times because I wish I could have been in both Canva and Fic.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“The first one that comes to mind that I reflected on a few times over the last year is Figma. I spent time with Dylan Field in the very early days. I was actually one of the early interviewers for the Teal Fellowship program, which she was in. And I remember going on walks with him in Palo Alto and a little bit like you actually, he was mature for his age. Now, I'm trying to think back to our first meetings in San Francisco and London. Dylan was really mature in a bunch of different ways. Like the way he was thinking about the need for perfecting the product before getting it out there, the opportunity to go after Skatch and others that were in that market already, but also just unlife related stuff. Like I remember asking him asking me about my relationship with my then girlfriend now wife and just how we make decisions together and how we communicate and what's good about our communication, what's poor in our communication, all sorts of stuff like that where I think he was about 20 years old at the time, maybe even younger than that. I don't think I've still seen anyone at that age be able to think.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“I actually think my biggest hit, at least as I can best predict it, is not Canva on a dollar gains perspective and on an IRR basis as well. It's a company called The Farmer's Dog, which is in the pet food space. Subscription service for fresh pet food. It's doing fabulously well. Two things. First, that some of the best businesses are incredibly simple. They're simple to understand. They're actually simple to build, but they're based on unique insights. I think that that's going to be the story of the farmer's dog once the story fully gets out. And the second is the pet category is a fabulous category. There are some markets where the tailwinds are just so strong in multiple different ways that there's a lot of opportunity for incredible enterprise value. And I think that that's the case for the farmers dog.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“And it's a muscle that the great companies build themselves. Again, I do think there are a handful of firms that have platform offerings that have moved the needle. But most of those platform offerings are about scaling the firm themselves versus about actually scaling companies and really helping companies get to the next level.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“My worst right now that I feel is on the sourcing side. I think when you're a duo investing at CDNA as a generalist firm, it's impossible to see everything you want to see. And I think it's hard too when you have started a firm and you have other responsibilities to be able to purely focus on sourcing companies. We do calendar audits and Catherine and Rachel who are our operations folks at Footwork actually send both Mike and me every week. What does our count audit look like for this week that's just passed and what does it look like for the upcoming week? And the single metric that we're focused on there is are we spending more than 50% of our time on meeting new companies and sourcing new investments? I firmly believe you have to spend the majority of your time on those things to be able to find the next great one. And the beauty of our business is the next one can be the one, right? The next one can be the one that changes everything and the trajectory of the firm.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't think that they spend enough cycles on it, but I actually think some of the great ones do. And of course I'm biased here. We had LPs who did 30, 40 references that we heard about on us each. We were heavily scrutinized on us as people because so much of our strategy is really just about Mike and me and our ability to make decisions in the partnership that we have. That's where we found LPGP fit with our LPs is the folks who really dug in on us as people and how we make decisions.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, exactly. It's like, oh, it's secta focused in this area, and I believe in that area. Great. It's like super easy to check the boxes on some funds like that. And don't get me wrong, there's incredible funds that are like that, right? But I think a lot of this business is the human side. I don't think that that's going to change. Assessing a person, individual GP's real commitment to doing this, their level of drive and hunger, their ability, of course, to improve themselves and learn, their ability to source and make investment decisions and to win and help companies, it's actually hard to get to the bottom of that, just as it is hard to get to the bottom of how great a founder is for us in our jobs as VCs.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“There's a difference in hunger and energy and drive that some managers have that others don't. It's sort of what we look for in the companies that we invest in. You know, of course, if it's a manager like you, for example, that really has a unique spin, a unique story and is an N of one on different dimensions, it's sort of easy to see that because you can put it on a page, it can stand. You can.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah. Oh, wow. We had two slides in our fun, one fundraising deck, which actually we barely got to present. We only had it.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, what we tried to do is we had a bunch of our friends who proactively said to us we want to commit to invest in the firm. And we went out to a broad group of LPs at the beginning in a first wave, a sort of set of friendly conversations to get feedback on our story, to practice. And we had one institution that we've known for a long time who said we'd love to do it. They didn't actually say what the check size would be, and it ended up being a small check. But it's really impactful to have one institution that's known you for a while, that's a well-known institution, say yes. And then we did try to prioritize the lodger institutions, the sort of group of 10 to 15 that I referenced that would do a larger check in a first-time fund, because that's a small n, that's the right group to see if we can get anyone to do it out of.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, look, I think that there's, especially in a first fund, there's a handful of LPs around the world, at least that I know of and have met, who are truly independent thinking, who will truly raise their hand and say we're willing to do a first-time fund, and we're willing to be the first commitment or the first big commitment. That group of LPs is very small. It's probably 10 LPs, 15. Our biggest LPs are not LPs in my private firm. They took a chance without having known Mike and me for a very long period of time. We have a bunch that are LPs from my pride firm, but not interestingly the very largest ones.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“We wanted some diversity, and I think we have about 15 institutional LPs. We have six university endowments, three other foundations. So we're a little bit weighted towards endowments and foundations, but we have a bunch of funder funds and we have a couple family offices as well. And so we like that mix because while the endowments are great names and they are long-term oriented, there's still some level of risk of having an entire endowment-based LP base. Because they may all have the same denominator effect issues at the same time. They also perhaps tend to be more aligned in what they care about. And so we in general like the diversity. And that's what we prioritized.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“We don't have a single LP who's more than 20% of our fund. We don't want one, two, three LPs having the majority of a fund and having therefore outsized control in our thinking or decision making in some way.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“And so we wanted a nice mix of Velpe's where there were a few at the 20 to 30 million dollar level out of 175, a bunch at sort of the 10 to 20 million dollar level, a bunch at the 5 to 10 million dollar level. There was diversification.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“Three things that we thought about when we raised our first fund, and we actually ranked LPs based on these three dimensions. And they were, one, what's just the quality of the relationship with the people? We really tried to prioritize people who we built relationships with, who we really liked as humans. Second, we thought a lot about are these people who've seen what world class looks like? And will they push us to be world-class? And third, we thought about the mission values of the institutions themselves and whether they were institutions that we are really excited to make money for and be partners with. And so those were the three dimensions that we prioritize. We assigned like a one through five rank on each of those. And then at a macro level, we were really lucky in our first fund. We had about 450 million of commitments for $150 million fund. And we ended up raising $175 million. But what we thought about as we were constructing the full LP base was just having a little bit of diversity across both check size and type of LP.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“I come back to the mantra, which is exceptional companies deserve exceptions. So our entire job is to find the companies that are outliers and to invest in those companies. If you really believe in your bones that something's an outlier, you should be trying to make that investment. I think it's as simple as that.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“There are partnerships where decisions are made based on the ability of individuals to sell internally. There's some folks that are just naturally more gifted to sell the deal to their partners. And there's political points back and forth on the voting system. That's a terrible way to make decisions. I think there's a lot of stuff that can bleed out from that selling process. I think also in general it's sort of intellectual dishonesty that unfortunately a lot of partnerships have. Those are the things that I would cite that lead to the dysfunction.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“That's why I was about to say it is weird and wacky and non-traditional. And of course, it doesn't scale, but it's been really important for us in the first couple of years of building the firm to operate in this way because we think that's the purest form of teamwork. Like every venture firm talks about work as a team, but very few, I think, actually show up as a team. And we've tried to do that from the earliest days. Both of us being on the text threads with a lot of our founders and both of us showing up to those board meetings in year one is reflective of that commitment to actually work together because we think we have complementary skills that founders can benefit from that and we really don't want to think about any decisions we make as individual decisions.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, look, we actually, for the first year after we invest, both go to all the board meetings together. We both do the work.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“For Mike and me, it is very easy for us to disagree but very seriously commit every investment that we make at footwork is so obviously a footwork investment. We actually don't even do attribution at the firm. We've never talked about which are Mike's investments versus my investments. We've done some kind of crazy and wacky things.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I think because of my bias towards companies that have some signs that they're working, some early signs of product market fit, the ones that most stand out there are ones that didn't have that, where at Shasta, for example, we made a decision to invest in something that was pre-product, but that actually turned out to work. Probably the other ones sort of that I can think of off the top of my head is ones where we stretched on price to do it. I liked it, didn't love it, but then I didn't like the price and so on.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“I believe that there can be a place in the middle. So for example, I've rarely been a one on anything in my venture career, but where I have been, I felt like there's actual downside risk to the firm potentially with making this investment or there's just something really off about it. And therefore, I feel very strongly we shouldn't do it. But I've disliked a lot of companies. I've been a two on a lot of stuff where others have been fours, where I'm really glad that we did it. And conversely, I've been very glad for myself that I've been a four and strongly supportive and other folks have been a two because they didn't think it made sense, but they didn't hate it. Much they wanted to lock it or say there's no way we should do it. So that's the way I think about it. I think you have to be intellectually honest, obviously, about”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“We don't. One of us has to absolutely love the company. The other can like it, not love it, or dislike it. The other can't hate it. If you think about the one through four voting scale, where one is strongly unsupportive and four is strongly supportive, three is supportive and two is unsupportive. One of us has to be a four. One of us has to be strongly supportive to make an investment. The other cannot be a one strongly unsupported.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“I've gone back and forth so much on this, right? Because this is an envelope. This is what decision making and judgment is all about. I do think consistent thing for me is, and I've gone back to try to study this, like if I'm thinking about it that evening, if I'm reaching out to people to sort of suss it out better and I'm just researching on my own about it hours after the first meeting, there's something there that I should pay attention to. And conversely, if I haven't done anything about it two days later, that's probably not a fit. Maybe it goes on to be really special, but I actually haven't had that many of those where I didn't really think anything of it. I didn't follow up on any interest in it after a couple days, and it turned out to be a massive company. And so I certainly reflect a lot on that.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“So, there's two that come to mind. The first is I've just always loved those first meetings with founders. I live for the couple every year that just blow me away and that suck me in. I've had a bunch of those now in my career, but I just love that. As a venture investor, you have to love that thrill. At least I believe in my...”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“I think there's certainly some truth to it. I think there's an insecurity that comes from not yet having delivered and distributions. Many, many multiples of what I've invested and insecurity that comes from having started a firm that has so much to prove, everything to prove, an anxiousness that I'll have until we've many times over returned our first fund. But I also think that who I am more than I've ever known, I'm able to authentically be myself. I think I've sort of been able to find my voice as a writer over the last three, four years of trying to do the newsletter. And so my hope is that footwork is an embodiment of sort of who my partner Mike and I are and that we express ourselves fully authentically through the investments we make and how we conduct ourselves as a firm.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, it's very consistent with what I've seen as well. Again, that ability to be confident in what is actually working, but also confident in what's not working yet and clear eyed and self-aware about it, is I think a characteristic of many of the great ones.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, oftentimes, if I'm really digging in and really excited about something, I'll say something like, hey, let's just pretend that this is our first board meeting right now, that we just invested in the company. What's the main challenge topic or discussion topic that you want to have in our first board meeting right now? The spirit of that question is just assessing, are they clear-eyed in their thinking right now about what's happening in the business? And can they articulate that? Usually you want what they say to be the most important thing that's also on your mind to prioritize and figure out in this phase. And you want some level of transparency and vulnerability around the answer. But I find that that question and the answer you get tells you quite a bit.”
2023-09-06 · The Twenty Minute VC · 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi · IDENTIFIED FROM THE TRANSCRIPT · source