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Ryan Akkina

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2024-01-29
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2024-01-29
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  1. “It's funny, that decision almost didn't happen. And I didn't tell Neil this story until somewhat recently. But actually, when we first invested in Green Oaks, it was back during the period where we were a bit more conservative in the VCs. We would back. And as a general rule, we didn't want to back anyone who didn't already have a great brand. And of course, Green Oaks at that time was raising its first institutional fund. And was not well known at that time. So it definitely didn't fulfill that criterion. And I remember actually, you know, my boss, Seth and I decided, let's leave this and look at fund two or something. And the next, but I slept on it. And then the next day I decided to call my boss Seth back and say, you know what, I think we should at least make a small bet on this to start. And we did, which is lucky we did because that's been one of our most successful relationships over the last 10 years. But to answer your question, what did we see in him? I think one thing that stood out even then was before he raised his fund, he'd done a bunch of individual.”

    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

  2. “Yeah, I mean, usually we try to know it well ahead of time and tell them relatively early and whatever their fundraising process is. But there's no way to sugarcut it, right? That's definitely one of the least fun aspects of this job.”

    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

  3. “It's tough. I mean, our default is always to be loyal to the people who were already invested in, right? But I think it is a reality that in the LP business, we're always on this treadmill of every firm, no matter how great has a half-life, right? No firm is going to be great forever. They'll eventually botch a generational transition or something if they even try. So how do we evaluate when people are getting too big? We think about things like, okay, how many great GPs do they really have on the team? How much can each of those people put to work? How much historically have they put to work per year, things like that, which try to give us some idea of what's reasonable? And of course sometimes people, you know, they just go a little bit too far and that's when we have to start scaling down.”

    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

  4. “I think sometimes firms grow too big too quickly, right? And that forces them out of whatever their sweet spot was. I think another issue is, you know, frankly, if people have a spell of success, sometimes they become arrogant, right? And sometimes they lose their intellectual honesty and their humility. And they start to make worse decisions and treat people worse and not work as hard, et cetera. That can happen sometimes and cause someone who was otherwise on a good trajectory to go sour. Honestly, sometimes people just lose their motivation, right? Once they've been successful enough. And that's a key thing we try to suss out, right? When we get to know people, what is it that drives them? And how long is this really going to keep them competing at the top of their game for?”

    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

  5. “Honestly, I would say in the first three years, you usually can't tell, right? It would be sometime between three and five years where we start to see whether some of their companies really inflected. And we don't necessarily care whether something has had an upround, although obviously that there's signal value there. But if we see they've backed some companies that are really starting to get fundamental traction and have the potential to be iconic companies, that's the proof, right? That's what we have to wait and see. That's the only time we know more concretely that something's really working.”

    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

  6. “It's funny. I mean, I can't point to that many things that are like the common things that go wrong. One thing is just, I think sometimes we underestimate how badly people want it, right? Like it takes a long time to be successful at this game. And I think it can be probably a slog for the first five to seven years. I think the feedback loop you have to get going as a VC is you need to have some wins that make you super credible to other people, right? And then that allows you to have better deal flow, have better winning ability, et cetera. And then you have that positive feature.”

    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

  7. “And impressive. There may be one GP who they just vibe better with for whatever reason, right? And they pick that person. So that's actually, even though it sounds so simple, that's not an aspect of this to be underestimated. And a lot of the time we spend with GPs, I'm often asking myself, what kind of founder would this particular person appeal to and why? And an interesting observation I heard about Sequoia once actually is that one of the things that made them so successful, there was this period where they had Mike Morritz and Jim Goetz and Douglone all kind of in their prime, all very impressive VCs in their own right. But interesting, they each have kind of a different flavor of entrepreneur that they would appeal to. So between having those three really impressive people who all kind of had different entrepreneurs, they would appeal to, that allowed Sequoia to cover really broad swath.”

    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

  8. “Really depends on how mature the person's track record is, right? I mean, obviously, if we're looking at a new fund, there is no track record to evaluate. Although I would say when we back a new fund, we do probably have a bias towards people who at least have some kind of angel track record. Totally. And so that can give us some hints as to their taste and ability to do things. Of course, it's not everything. And someone may be in a dozen unicorns or something from the last 10 years, but if they were only really small checks, that doesn't necessarily tell us about their ability to put a big check into something like that in the future. So, you know, we try to, I'd say the earlier someone is in their career, the more we have to focus on qualitative or subjective things. Like, I don't think it should be underestimated how important just likability is. When a founder chooses someone to be on their cap table, they know it's going to be a partnership that's going to last for a very long time, right? And, you know, if they're choosing between, say, three GPs who are sort of equally...”

    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

  9. “I mean, I think if you're a great picker and you're not really that well liked, it can work. I mean, it depends on how competitive your space is, right? So I think in seed, that's probably more doable than in Series A, for instance, right? Although, of course, there, there are people who win and you hear crazy stories about, but I would say we tend to spend the most time thinking about the winning and servicing angle, which kind of feed on each other because I think, look, there's at least several hundred people in the industry at any given time. GPs I'm talking about, who have a good deal flow and good picking abilities. The competitive aspect forces us to focus our evaluation on those final two pieces, the winning and the picking, or sorry, the winning and the servicing.”

    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

  10. “The way I usually try to bucket it into different areas for evaluation is see pick win, right? We need people who can see the best deals. Then we want them to be able to pick the best ones to try and invest in and then finally they need to actually be able to win allocation of deals, right? Because there's lots of people who have great deal flow and who can pick the right stuff. But the final boss, so to speak, is, okay, can you get that entrepreneur to pick your terms sheet over someone else who's really impressive? And then finally, I'd add service. How well do these GPs service their founders and ensure that when they're in the next competitive deal, that founder, they just backed is going to be a positive reference for the next one?”

    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

  11. “Yeah, well, as I said, we've been lucky that we've been in this game a long time as an institution, right? So we're lucky to be in a lot of the big names you would expect, Sequoia, Kleiner Perkins, and Dreason, et cetera. And then there's some newer things as well that we've done in the past 10 or 15 years, like, say, Green Oaks or Y Combinator initialize. Those would give some flavor for some of the things we 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

  12. “I think he's right, though. Right. I mean, I think one of the hard things is seeing who's truly dedicated and who truly wants it badly, right? And during times like this, when it's much harder to raise capital, you see which new firms really want it badly. And the ones who don't are disappearing, right? So I think that's one thing. And of course, look, at least for some period of time while we're in a downspell, there'll be a little bit less competition and valuations will be better 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

  13. “Oh, absolutely. I mean, there are several very impressive firms that we missed. And if we were to try and get intoday, you never know, but I think in many cases, maybe we would be able to get in, but the check size we would be able to get would be relatively small. Small enough that we would question whether it was worth doing. But maybe that's something we should think about. There might be cases where we would be willing to do something even with a really small check just for the relationship. But yeah, I mean, these firms, once they're discovered and it happens early and earlier now, they rightfully prioritize their existing LPs and the people who back them from the beginning when they're thinking about who to give capacity to for future 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

  14. “I agree with you. I think this is something that only goes one direction. And of course, there will be cycles. Like right now, in things to having a bad spell the past few years, it's become a little less popular and there's a little less competition. But I think that is a secular trend. It's going to be an industry with more capital and more eyes on it.”

    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

  15. “Unfortunately. Right, right. And so we have to try and still find the places where we can make high margins. And that's become very difficult, obviously.”

    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

  16. “It's gotten a lot more difficult for a lot of reasons. I think one is, I mean, if you just think of the strategy we used to have, and I think a lot of other large endowments had for some time, it was basically sit back, see who the top five or six firms are focused on Series A's in the US mainly. You know, we had a good enough brand as MIT or other endowments and foundations to wait till these things were pretty proven. Not to mention we've been investing in these things a long time. I mean, MIT has been investing in venture firms since I think at least the 70s. So we could be a little bit lazy and sit and wait and then get into whatever the top firms were. And there wasn't a huge number of them, right? And today, I think the ecosystem is hugely more complex, right? In terms of stage, in terms of geography, in terms of all sorts of different business models, there are for venture firms, different sector specialists and so forth.”

    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

  17. “Me to start off at 22 and just carry someone's bag and probably not be very much valued. But then inexplicably, I decided to be a management consultant instead. So I did that for about a year. It was a good experience. I learned a lot. But about six months in, I could already tell I didn't want to do that for the full tour or three years that you typically do it as an analyst. And I remembered I'd been interested in investing from seeing venture capital. And, you know, obviously I still didn't have a good reason to be in venture capital. I thought, what else can I do to learn about lots of different types of investing and where could I work for a good cause as well? And so that's how I got the idea of working for an endowment or foundation and learned about this whole LP world. And it just happened that MIT had a, you know, a job posting on their website. So I applied to that and through chance and luck basically wound up there in 09 and that was 15 years ago. I've been there ever since.”

    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

  18. “A lot of interesting VCs and entrepreneurs through that. Got to work with some interesting firms as well. This was back before YC was so well known, for instance. And I remember one spring, I think, we helped organize a YC startup school event on the Stanford campus. So I got to see that from pretty early days. So actually when I was graduating, I thought, well, maybe I'd like to become a venture capitalist. And I also started a company with some friends my senior year that A few months in I decided it was unlikely to work out so I didn't stick with it. They actually went on with it for four or five years, I think, and went through YC and made a go of it. But anyway, I actually thought about becoming a venture capitalist after school and I had an offer at a firm, but I ended up deciding, you know, I don't really have a right to win there, right? I had seen by that time that the returns were pretty concentrated in just the top people and not having been an entrepreneur or even a senior executive or something to tech, I just thought, well, you know, is this really the best thing?”

    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

  19. “Well, it's definitely not a job that you think of as a kid or something, and someone's been, right? I mean, I didn't even know the job existed probably until my early 20s. You know, originally thought I would be an engineer, and I was lucky I had this interesting job in high school where I worked at HP and Intel working on microchip design on this project called the Itanium processor. And so I assumed when I went to college, I'd probably do doubly and, you know, be an engineer after that. But I wound up at Stanford about four summers into my internship at HP and Intel working on this processor. I decided I didn't really like working as an individual contributor engineer in a cubicle somewhere and wanted to do something different. So I switched to something at St. Never called Management Science and Engineering. In retrospect, maybe what I should have concluded is I just didn't like working at a big company. But anyway, I did that and I was also part of a lot of entrepreneurship activity at Sanford, if you will. There was this club called Bases that helped organize the career fairs. So I got to meet”

    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

  20. “The US venture portfolio, we probably have maybe six to eight core relationships, 50 to 150 million per fund. And then after that, we have another bucket where the check sizes are typically 10 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. 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 record, let's say, or we're doing it to work with them to source co-invascent in the future.”

    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