YouSaid · the spoken record

Ryan Akkina

lines on the record: 70
first: 2024-01-29
most recent: 2024-01-29
sittings or episodes: 1
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“Well, I mean, the thing I dislike most, of course, is having to disappoint people, right? Because for every hundred meetings we take, right? I mean, we might only invest in one thing, basically. So that means disappointing a lot of people. And of course, it's even harder when it's someone that you work with potentially for many funds.”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“I think it's a combination of his ambition, his great judgment, and I think he's made to be very likable and useful to his founders.”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, that's a case where when they got started, just no one from MIT spent much time with them. And I think now at some point it just felt like it was too late.”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I mean, honestly, we don't talk to other LPs that much. No, I mean, there are some, of course, right? But we try to stay independently minded, right? And I think the more you talk to other LPs, the harder that is to do.”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“When things are going well, you're never as smart as you think you are. And when things are going poorly, you're never as dumb as you think you are either.”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, they're often, depending on the firm, they're often highly produced. I mean, it's always useful to get some time talking to people, right? But look, I think, yeah, a lot of them are probably longer than they need to be.”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, this reminds me of, I think it's a quote from the Andreessen folks. I think they say something like nowadays when an entrepreneur comes in and tells us a crazy idea, we assume they're right. It's just that their timing might be off. And I tend to follow that as well.”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, even there, I'm not, I don't want to be totally closed minded, right? I mean, a lot of the things, something I think I'm always humble about is a lot of the things that have turned out to be the best businesses are things that many people would have thought were totally crazy. So, you know, look, I don't use NFTs myself, but I don't want to completely close myself to the notion that something there could be successful.”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“Something I chuckle about a little is just how pro cyclical people are, and two years ago everyone wanted to do lots of late stage and soloca capitalists and crypto. And then a year later, they all think it's dead and don't want to do that ever again. I think most of those things will come back.”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“Probably hard tech. I wouldn't say I've completely changed my mind on it. Not to say I have a really hard set view either way, but I think I used to be much more skeptical of them and I think the existence of things like, you know, Tesla and SpaceX and Endural have forced me to reconsider some of my biases.”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, certainly the probability of hitting a 3x is much less. So I think in some cases we can still justify it. But yeah, I mean, if a firm gets too big and we're no longer confident that we can make exceptional returns over time, we're going to have to scale out.”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, it's very hard, right? I mean, I think the reason it's hard is just because it's unusual to have exceptional people. And then it's very hard to find the next generation of exceptional people, right? It's hard to make lightning strike twice. And then, of course, the bigger your firm is and the more GPs you have in some ways it gets exponentially harder, right? If I was lucky to have three really good people, it's extremely difficult for me to have another cohort of three really good people come up next. But the people that do it well, I think one, they're very thoughtful about it. They're very thoughtful about mentorship and making sure that the next generation of people has the right skills to be successful. And I think also they're thoughtful about how they share economics. And, you know, they don't wait too long to do that. And I think one of the reasons a lot of firms sometimes lose some of their best people is because they don't do that quick enough.”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, it's, I mean, it's something we're wondering about as well. I mean, it was an area of great success for us for some period of time. We're doing a lot less there now. I mean, we're not going to categorically not do it at all yet, but we are reducing it. And to the things that we keep doing, we're very careful about whether they're people that we think are going to keep from sensitive areas of investment. And obviously also, we don't know how these regulations might change in the future. So that's another reason to keep it small.”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“It just depends on how it's done, right? I mean, I think there are some people who do a really good job at it, and they manage to thread that needle of protecting the time of the GPs who you want focused on their main job, right? Which is investing, but still manage to keep you updated and like, you know, what's going on and can get you access to that person when you occasionally need it. And of course, something we try to do as LPs is not be overly demanding in the time we take from people, right? You know, we're always very conscientious of the fact that we want most of these people to be spending most of their time out on the field, right? Chasing the best deals and not, you know, with us or other LPs.”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“You probably don't want to exceed 10 to 20 percent except in very unusual circumstances. Part of it is just what kind of business do you want to run, right? Obviously, if you have a large number of LPs, you shouldn't underestimate the time that it takes to manage those relationships, right? And if you're going to have, say, hundreds of LPs, you may need some people in your business who are dedicated to managing those relationships, right?”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“Interesting Yeah, another piece of advice I'd have on that is that it's good to build relationships, but you don't necessarily want to force people to evaluate you too early, particularly with larger institutions. It can be the case that once they evaluate you once, they may not be willing to look at you again. If an LP is very picky and usually does very mature things, you know, you don't want a situation where you get them to evaluate you prematurely and then you're permanently written off. I mean, no one's ever permanently written off. That's a bit dramatic. But, you know, if you can, I think it's good to know who you're trying to raise from, what sort of their sweet spot and try to keep them from doing that full evaluation until you're really at the right point to be evaluated by that person.”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“I think you have to treat the process like an enterprise sales cycle, right? Which means you need to think of it as a numbers game. I would say life funnel.”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“People are not close to business. I think people have to do things in smaller size or might not be able to do as many new things as they would otherwise like. But, you know, I think, especially for the firms that have top reputations, I don't think they're having that much trouble raising money. I think they always have more LPs who want to invest than they have capacity. So I don't think the top firms are hurting in that regard. I mean, maybe, you know, if they try to raise too much, they'll get more pushback than normal, more critique, which maybe is a good thing. I think it's a smaller managers or the emerging managers that are going to have a lot more trouble. Raising capital in this environment.”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so ideally we want to be probably about half half public's privates. We typically carry anywhere from 5 to 10% in cash and short duration government securities. In terms of total risk, probably one of the main ways we think about it is we have a concept called drawdown beta where essentially if the market is down 10%, we only want to be down, say, not more than 7.5%. So we try to keep it 0.75 beta or less.”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“Think about it a lot. A couple things. I mean, one, it was a very unusual structure, as people now know. Two, you know, it was unclear how they were going to achieve success technically at the time. So it was just, it was, you know, we felt it was a very speculative bet at the time. But, you know, I think that's the case where we probably said we should have said, look, we know Sam, we know he's a special person. This is a huge idea. Make a small bet.”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“It's funny you ask that about some of my mistakes, right? Because actually, the biggest mistakes I think about are actually errors of omission, of things I did really well. And probably the number one thing I think about right now is, you know, I mentioned we're investors in YC. And when Sam left YC around then, we also had an opportunity to invest in open AI. And we didn't do it. So that's definitely an era of omission that...”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, for one thing, I personally spend a lot less time on the public markets than I used to. I mean, actually, when I started MIT, I was mostly doing public market stuff, but I'd say in the last seven to ten years, I've sort of switched to doing mostly private stuff. I just find it much easier for me and my personality to, I think, generate alpha on the private side. I mean, the public side is always becoming more competitive. If you think venture is competitive, try making alpha versus the Nasdaq, right, as a public manager. That's incredibly difficult to do on a consistent basis. That's one thing that's changed for me. I think another thing is, I think after seeing things play out over a couple cycles, I trust my judgment a little more, right? I mean, there are things that happen during the peak of bubbles where you didn't think something would do nearly as, wow, maybe there's something you passed on, right, for good reasons, and then it does incredibly well. And, you know, it's a rather confusing, but sure enough, these things eventually come down to earth.”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“Normal. Of course, it hurt me a little. I mean, I think I was lucky that I had had some other successes I was involved in by then. So it's not like, you know, that was the only thing I'd done. And then it was a failure. And I mean, I'm amazed, actually. I think on that particular deal, we still recovered about a third of our capital or something like that. So it wasn't a zero. But, you know, you always, yeah, I mean, it impacts you a little bit, of course. But luckily, things have been fine since then.”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“And all these other potential problems. At least as it relates to venture capital, I think one of the things I learned from that is I think we didn't appreciate how brittle these small shale businesses can be, particularly if you're going to not just flip acreage, but actually try to fully produce it. Because the decline rates on these wells are so high, even though on a well basis they can have high IRRs, the decline rates are so high, if you're trying to really maximize production, you have to basically reinvest your whole balance sheet every year. And even if someone is really good at that, let's say they get it right 80% of the time. Well, 0.8 times 0.8 times 0.8 times 0.8. After five years, you're starting to face pretty significant probabilities of a big loss, right? In some ways, I think that's what happened there. And what is my takeaway? You have to be very careful with businesses where you have to reinvest the balance sheet every year. You have to continuously reinvest the customers, right? So other parallels I sometimes notice, things like gaming where maybe you have a very high trend.”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“Wells here and there, horizontal wells to prove it out, and then they would flip it for a big MOI, right? Anyway, there was a period where there was a big oil decline and they found it a new place they thought would be good to do that. And it did work out initially, but then the problem was actually it was so successful that it was very hard to flip this package because it got so big, right? I mean, this thing was worth, I think, well over a billion dollars at peak. And at peak, it was probably like a five to seven X for us. And anyway, so the way they wanted to exit it was they ultimately merged it with another small public company that had complementary acreage. And then we just had this perfect storm of new CEO. We had an oil price decline after that. They drilled a few bad wells as well. The company they merged with had a fair amount of debt already. And so things just spiral down, right? And so I don't, you could say, look, what did you learn from that? Everyone knows not to do commodity oriented things with high leverage.”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, basically, what happened was so there was an oil cycle, right? And there was a manager we were invested in who was very good at doing this play, basically, where there was this thing they could do for a number of years where, as you know, right, shale technology has really improved and innovated a lot in the last 15 years. And there was a period where it was a relatively new thing to be doing horizontal exploration of certain oil plays. And so they found this interesting area where it had been vertically explored with vertical wells, but not horizontally explored, which could really increase the yield of oil you could get from the acreage, right? Because it was vertically explored, they had a pretty good idea from looking at those wells where things would probably work and where they wouldn't. But the bigger buyers of these parcels of acreage typically wouldn't give you full credit. So what these guys would do is they would buy the stuff that hadn't been horizontally explored, like a large parcel. And then they do a few”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“We didn't write the whole thing to be clear. Yeah, I mean, honestly, Neil probably had several other, you know, several of Neil's LPs are very good, and I'm sure there were others that participated as well. In a situation like that, a lot of it is trust, right? I mean, we trust Neil's judgment, but also that was another case where the structure was fantastic. You know, we knew a lot about the company already. We had several other people we know who had a really high opinion of Parker. So I think we had a prepared mind for it as well. So it was a combination of, we had a prepared mind because we knew about the company and the founder already. We had a lot of trusts already in Neil and his team. And thirdly, the structure was really fantastic.”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“Probably can't talk about in detail, but the point I'm making is that within a few hours on a Friday night, we made the decision to back that deal. I don't think there's many LLPs who can do that.”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, it's always a concern, but look, I think you have to be disciplined at the end of the day and say no to things that are marginal uses of your capital. And could there be a few cases where we can be helpful with a smaller check for something that's right on the margin for us, but a big deal to that manager? Sure. Occasionally, we might do that because we think overall it's NPV positive, right? But, you know, I think another thing that keeps people coming back to us is we're probably one of the few LPs, certainly one of the few university endowments who can react to one of these things very quickly in big size. I mean, I talked about how in the case of coupon, we had quite a bit of time to look at it, but there are other cases where, you know, with Neil, for instance, I think there was a big article maybe last year about the deal he did in Rippling, right? And that came together over a weekend, right? During this bank collapse period”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“It's a tough question, right? I mean, obviously, we're all weighted a little bit to what we see happening in the public markets at any given time, right? And I think at one point during the peak of the bubble, we were weighted to much higher exit valuations than we should have been. We made mistakes like everyone else. I would give ourselves some credit for at the peak of the bubble. We said no to several co-investments where, you know, people that we really respect and still respect were pounding the table to do these things. And we said no.”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, it's tough. I'm of two minds on this, right? There are good reasons for endowments and foundations to have the incentive structures set they have because something that the governance is typically concerned with is they want to make sure things don't go awry, right? And they don't want to give people a free option on an institution's capital by giving them carry necessarily. So there's good reasons to do it the way it is done. But if I had a blank sheet of paper, if I were running a family office, let's say, I would probably do something where one, people would be required to invest a lot of their own money in the investments the firm was making, either money they already had or a large portion of whatever their bonus might be. And I would probably say yes, there has to be some kind of incentive structure, maybe over a suitable hurdle.”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, honestly, I think the answer is no. I think we're able to do what we do because I have to give credit to our CIO. Seth, he's created a culture where people care about doing these things and want to do these things. And I think also it helps that because we had a period of success, I think we had, you know, we built up enough credibility in our own situation to feel comfortable taking some of these risks. But yeah, I mean, the traditional endowmenter foundation, I think part of the reason they're not good at this stuff is they don't have an incentive to be, right? And people, when they don't have an incentive to take risks, they're not going to want to stick their necks out.”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“It depends on our liquidity at any given time, but there's a huge range, honestly. So in the case of coupon, that was $120 million co-investment for us. And we made, I think, a distribution price is $78X or something like that. It's probably a little lower now that the stocks come down a bit, but that was a large outcome for us, obviously. Sometimes it's constrained by what we can get. I mean, there's another opportunity where we co-invested in Snowflake before it IPO'd. And in that case, we were only able to get a few million bucks allocation, even though given what we knew about the company, we would have invested a lot more if we had the opportunity. But, you know, I'd say it's a wide range. If something's earlier stage and less certain doesn't have as much structure, it may only be a $5 million.”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“In India turned out to be interesting as well. So that was some of what turned us on to the opportunity. And in that case, we were able to spend quite a lot of time getting to know the company, getting to know the financials, getting to know the structure, and really being thoughtful about.”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“Do you like to get to know these businesses, and so ideally, we like to get to know them well ahead of time. In the case of coupon, for instance, you know, when we first got interested in it, it was when we did a reference call on Neil with the company. And we're very impressed with Bomb. And that was something Neil actually invested in before Green Oaks One. And so we were kind of disappointed, actually, that we were investing in this new fund where it was not going to have that exposure, right? And so we told him, if there's ever an opportunity for us to invest alongside you in this company in the future, let us know. And, you know, and sure enough, within a few years after that, Neil did see there being a potential opportunity to put the structured round together and let us know. And, you know, we had enough time to go visit the company in South Korea and tour some of the warehouses and things like that, get to know Obama a little bit better. I'd also say I think we had a prepared mind because by that time, obviously, we'd seen Amazon work in the US, right? We'd seen some other things in other countries like, say, JD and China or Flipcard.”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, basically, it was a note where it was the most senior thing in the capital structure. And of course, we had a view about the minimum future EV of.”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“Also, for example, Neil might have mentioned the coupon case. Most of the money we invested in that was in this special structured note where we felt it had very protected downside, but managed to keep a lot of the upside as well. So it was very easy to have high conviction that situation for us at least”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I think there's a number of things we like about it. One is just if you can have another tool in your toolbox for making good investments, why not build that up, right? Secondly, I mean, I personally find it easier in a lot of cases to write a big check to a co-invest than to a blind pool fund, right? Because no matter your conviction in someone, when you're writing them a blank check, we don't know what's going to happen, right? And as we've talked about a little bit, even with people who have a really good track record, you can't fully predict how they're going to do with that next check, right? But if we have it opportunity to invest in something with that, we know as a great company today at a reasonable valuation and sometimes with a really great structure around it as well. I find it much easier to have high conviction that.”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“Certainly think about it. We almost never do it because we're not willing to do it at a low price. The reason these secondary funds exist is obviously to get high IRRs themselves, right? And so generally speaking, if we're selling a package of something to someone smart and they think they're going to make a 20% plus IR, that means us, well, we should probably just hold these things, right? So luckily we've never been in a dire enough liquidity situation where we had to do that, right? I think we would only do that if we were really forced to”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, there's not much we can do, strictly speaking, right? I mean, there's some cases where maybe particularly if there was a co investment, we could encourage the manager to sell some secondary or something. But there's not much we can do, right? We're waiting like everyone else for these things to IPO. And I think another thing we're concerned about, of course, is with a lot of these companies, so much of the cap table is owned by investors who have been there a long time and maybe obligated by their fund lives to get out. It's anyone's guess what's going to happen to the prices of these things when the lockup windows expire, right?”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“And doubled in size. And this crop of big companies has taken much longer to achieve liquidity than we expected. So I'd say there was sort of an unusual effect there in this cycle. But normally we know we have to pay out about 5% of our assets per year to support our institution. That never really changes. We have a smoothing formula for that, but that's pretty consistent. So we generally know what we need to do. It's just, I think this is a very unusual period.”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“It certainly makes it a more tricky situation, but we have a lot of ways of modeling this, right? For the most part, we're able to be pretty consistent in the check sizes we put out. I would say the last two years are unusual because of this dual problem of, one, we normally assume all our managers are going to raise every two to three years. And there was a period where basically everybody deployed a fund in one year and then raised again right away. So that was one thing. And then secondly.”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“It certainly improved things for us, where less liquidity constrained now than we were, say, at the beginning of last year, but the major issue still continues to be that there's all these big companies like Stripe, for instance, from the last cycle that have not had the liquidity events yet. And so until some of those things get liquidity, we'll probably still be more constrained than we otherwise would be.”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, look, another thing I'd say is, as someone who works on both public markets and private markets, in the public market, if a manager went all to cash in their portfolio, we wouldn't like that either. We would say they're trying to time the market, right? So similarly, I don't think you can criticize feces for deploying money during a bubble period, right? Now, do I wish they deployed less? Sure.”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, well, the tension there, right, is the top VCs have scarce capacity relative to their fund size relative to the universe of LPs who might like to invest. There's a big mismatch there, right? And so I think LPs often feel reticent to criticize people too harshly, right? But I mean, look, we all know that we were all undisciplined for some period of time, right? It's not a secret. Versailles, everyone did it. I mean, if we were going to say we're not going to invest in people who were undisciplined in 21, you'd have a very, very finite. We could only invest in new people, basically, right? So I think we have to try and make sure that at least people are being intellectually honest about making mistakes and being undisciplined and forthright about what they learned, and we have to move on.”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“At peak, we probably put somewhere between $1 and 1.5 billion out per year. But to give you an illustration of how much it can change, at peak we probably were putting $3 billion out the door in one year, and now we're probably down to about a third of that, so maybe a billion dollars.”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“I said, there's maybe six to eight really big core things. In the middle bucket, there's probably about 20 managers today. And then in the...”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“So, today, at least in the US venture portfolio, we probably have maybe six to eight core relationships that we would refer to them as where we're writing checks of like 50 to 150 million per fund. So some of those big names you would think about, right? And then after that, we have another bucket where the check sizes are typically tend to 20 million per fund. And those are things where they may be less mature managers. And so that's why we're not writing as big a check, or it could be that it's just a fun with a very small size. And so we just can't scale it to 50 to 150 million because maybe it's only a hundred million dollar fund or something, right? And of course, there's often many other LPs around the table. And then a third bucket we have now is things where basically we'll write a million dollar check because maybe it's extremely early and the person had no track record, not even an angel track record, let's say, or we're doing it to work with them to source co-investments. But in terms of the number of things, so as”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“Ah, there's definitely a tension there, right? I mean, we want people to do what they say, but if they discover the original strategy is not likely to work, then obviously we want them to evolve, right? So I think it's about, you know, communicating that early if you are going to shift your strategy and doing it very purposely and being clear about why.”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source
“Deals not with the fund, but sort of on a deal by deal basis, raising money for each thing. And we talked to a number of the founders that he worked with, like Bomb from Coupong, for instance. We do thousands of reference calls, right? And so we're pretty attuned and calibrated to when something stands out. And the way founders talked about Neil was it was really exceptional relative to most calls we do. So that stood out. You know, he had an interesting thesis at that time too on e-commerce, which was part of why we backed him, although he evolved over time and is much broader now. But, you know, at the end of the day, it was a bet on him and Benny and a gut feeling, really.”
2024-01-29 · The Twenty Minute VC · 20VC: How MIT Selects Venture Managers to Invest in | The Three Categories of Check MIT Writes Into Funds | How MIT Builds Their Venture Fund Portfolio | How MIT Approach Direct Investing | Why Being an LP Has Never Been Harder with Ryan Akkina @ MIT · IDENTIFIED FROM THE TRANSCRIPT · source