YouSaid · the spoken record

Samir Kaji

lines on the record: 35
first: 2015-12-02
most recent: 2015-12-02
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Returning. I know, and I won't name anybody, but I know people that are incredible fundraisers but are terrible at actually distributing capital back.”
2015-12-02 · The Twenty Minute VC · 20 VC 093: Where Is The Micro VC Market Going with Samir Kaji @ First Republic Bank · IDENTIFIED FROM THE TRANSCRIPT · source
“It's returning capital. Incredibly tough thing to do. And until cash hits the bank, it's not there. And the part of that is it's not just returning capital, but having to wait seven to ten years to understand whether you're any good at investing.”
2015-12-02 · The Twenty Minute VC · 20 VC 093: Where Is The Micro VC Market Going with Samir Kaji @ First Republic Bank · IDENTIFIED FROM THE TRANSCRIPT · source
“Oh, great. Ezra is great. And he's very thoughtful in his approach. And so folks like that, I just like to digest information from.”
2015-12-02 · The Twenty Minute VC · 20 VC 093: Where Is The Micro VC Market Going with Samir Kaji @ First Republic Bank · IDENTIFIED FROM THE TRANSCRIPT · source
“I'm going to probably say the same things a lot of people have said here. I'm a big fan of pre max blog, Unfortune, strictly VC. On the blogging side, there's guys like Thomas from Redpoint. There's Mark's sister, Bradfeld. I really like the way they write. It's very authentic. There's also some young and up-and-comer folks like Ezra Galston from Chicago Ventures.”
2015-12-02 · The Twenty Minute VC · 20 VC 093: Where Is The Micro VC Market Going with Samir Kaji @ First Republic Bank · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I'm going to give you really quickly three. So number one is every morning spend 20 minutes just reading. Don't check email. Don't log into the external world except for read a book, read something, read an article, read a blog post, whatever. I think it's an incredible way to start the day. Number two, I think you have to spend an hour a week self-reflecting, disconnect completely from any audio, visual devices. You know, challenge conventional thinking, challenge your own thinking. For me, that's been an incredible way for me to sort of get out of the normal day-to-day rut and actually do things that I think have been very, very interesting and very important to my career. And the third one, which I'm not good at, is carving out two hours a day where you're just not connecting and you're spending time.”
2015-12-02 · The Twenty Minute VC · 20 VC 093: Where Is The Micro VC Market Going with Samir Kaji @ First Republic Bank · IDENTIFIED FROM THE TRANSCRIPT · source
“Thing for a lot of people in this industry to do, but staying humble and just trying to help, I think, is something I look for. And there's guys like Eshmit Sadana, Jeff Clavier that have sort of embodied that in my mind.”
2015-12-02 · The Twenty Minute VC · 20 VC 093: Where Is The Micro VC Market Going with Samir Kaji @ First Republic Bank · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, I don't know if I have a single person. So, I mean, I respect anyone that's actually going out and raising a first-time fund. I think it's incredibly difficult. It's incredibly taxing and challenging. But I will answer it to a certain degree. And I'll say, I really respect the pioneers of this industry, the ones that first took the plunge. Folks like Mike Maples and Michael Daring, Steve Anderson, Jeff Clavier, they started the micro VC trend and they started raising these small funds when it wasn't even a thought. So I have a lot of respect for what they've done within sort of the industry. And number two, this is more general comment. I respect any VC, any micro VC that fundamentally is just and has an authentic desire to help the innovation community and stays humble about it. I think that's an incredibly”
2015-12-02 · The Twenty Minute VC · 20 VC 093: Where Is The Micro VC Market Going with Samir Kaji @ First Republic Bank · IDENTIFIED FROM THE TRANSCRIPT · source
“It's a great book. It's a great book. And for anyone that's an easy read for anyone that has a little bit of time, it's a must-have in terms of anyone that's interacting with people.”
2015-12-02 · The Twenty Minute VC · 20 VC 093: Where Is The Micro VC Market Going with Samir Kaji @ First Republic Bank · IDENTIFIED FROM THE TRANSCRIPT · source
“Good question. I have probably two. I'm a big sports fan, so in a big Los Angeles Lakers fan. And so the Phil Jackson book to me is really interesting in terms of behavioral psychology, you know, running a team with a lot of egos and actually being successful throughout that. So that's number one. I guess from a business perspective, again, I'm more into behavioral psychology than fundamental metric type of books. And so one that I think is really interesting is a book by Adam Grant called Give and Take.”
2015-12-02 · The Twenty Minute VC · 20 VC 093: Where Is The Micro VC Market Going with Samir Kaji @ First Republic Bank · IDENTIFIED FROM THE TRANSCRIPT · source
“And the third thing I think we're going to see, I mean, and we're starting to see this to a certain level, is the use of data. So, you know, companies like Mattermark and CB Insights do a great job culling some of the private data, which is imperfect in nature and really putting it in a way that's very actionable. And we're seeing some firms like Signalfire, for example, that use proprietary data platforms to make decisions. I think we are going to continue to see the use of data in a way to more efficiently allow investors to make decisions very quickly and identify early signs and signaling for companies that are sort of at that C level.”
2015-12-02 · The Twenty Minute VC · 20 VC 093: Where Is The Micro VC Market Going with Samir Kaji @ First Republic Bank · IDENTIFIED FROM THE TRANSCRIPT · source
“And fundamentally, we saw massive contraction. I think that's going to happen. I think another thing that's going to happen is the continued prominence of platforms like Angel List. Again, I don't think it's going to be linear. I think it's going to, you know, we're going to have some retraction, but at some point, I think it's going to be a very, very important and integral part of the CD ecosystem.”
2015-12-02 · The Twenty Minute VC · 20 VC 093: Where Is The Micro VC Market Going with Samir Kaji @ First Republic Bank · IDENTIFIED FROM THE TRANSCRIPT · source
“My crystal ball, unfortunately, only goes out to five years, so I'm going to answer it with what do I think is going to happen over the next five years. So I think a few things are going to happen. Number one, I think we're going to see contraction in this space. The number of active micro VCs, I think, is going to drop to close to 100 to 150 by the year 2020. Again, I think it's pure math. I don't think there's enough returns out there to sustain the number of micro VC funds that are out there. We've seen this before. We saw a run-up in the number of active venture funds from 95 to 2000 peaking at 1,100.”
2015-12-02 · The Twenty Minute VC · 20 VC 093: Where Is The Micro VC Market Going with Samir Kaji @ First Republic Bank · IDENTIFIED FROM THE TRANSCRIPT · source
“As firms continue to try to be differentiated within this industry, again, there's three hundred, that's a lot, is that we're seeing differentiation through thematic and vertical focuses. So now not every microVC fund is a generalist. I think first generation, almost every micro fund was a generalist. Now we're seeing funds that are very focused in certain segments, whether it be B2B, whether it be consumer, whether it be IoT, robotics. And I think fundamentally the approach there is if I am going to be able to see the best entrepreneurs and win those deals, I have to bring something very unique to the table.”
2015-12-02 · The Twenty Minute VC · 20 VC 093: Where Is The Micro VC Market Going with Samir Kaji @ First Republic Bank · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I mean, over the past couple years, right? So we've seen this explosion. People have had to adapt. There's been a few things, right? I think there's a clear bifurcation actually within sort of the micro VC market. You know, as I mentioned, nearly half of the firms are 25 and under. They tend to be proof of concept funds. They tend to be part of a syndicate, not leading rounds. And then on the other side of the barbell, you have sort of a lot of the first generation folks like Felice's Ventures, Floodgate that have become bigger and have been in a lot of ways look and feel like full stack VCs in terms of taking board seats, leading rounds, investing deeper into the cycles, and actually investing out of the fund across not only the A round, but oftentimes the B and C rounds. So that's one. The other thing I'm seeing right now is”
2015-12-02 · The Twenty Minute VC · 20 VC 093: Where Is The Micro VC Market Going with Samir Kaji @ First Republic Bank · IDENTIFIED FROM THE TRANSCRIPT · source
“To venture versus looking to completely disrupt and eliminate it, I also do think that, you know, if you think about some of the microBCs out there, I think the next generation is sort of these proof of concept funds that are $5 or $10 million are more likely to get down on Angelist than they are standalone LP funds as people sort of realize the pain of raising a fund and administering it is often far outweighed by sort of getting it in place and starting a franchise. I think most people that will start these small firms, let's just do it on an Angelist.”
2015-12-02 · The Twenty Minute VC · 20 VC 093: Where Is The Micro VC Market Going with Samir Kaji @ First Republic Bank · IDENTIFIED FROM THE TRANSCRIPT · source
“Over time, we will see how it evolves. I actually do think that Angelus is going to play a more prominent role across all cycles, not just the seed cycle. But I think it's going to be in fits and spurts. I don't think it's going to be linear. I think if you think about the type of investors investing, a lot of people investing on Angelists are tourists investors where they're investing during a very good time. But if the market turns and if there is a contraction at some point, a lot of those investors are going to retract. So, you know, again, I think it's going to be a more prominent thing. I think it's actually very complimentary”
2015-12-02 · The Twenty Minute VC · 20 VC 093: Where Is The Micro VC Market Going with Samir Kaji @ First Republic Bank · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, not too much yet. So, I mean, it's still early, the amount of capital in the platform still fairly low, although we're seeing much more of it now. You know, I think it's been augmented. I think it's very difficult still for early, early stage companies to get institutional seed. And so for a company that's, let's call it pre-product, Angelist is a great avenue to get to $250,000 or $500,000.”
2015-12-02 · The Twenty Minute VC · 20 VC 093: Where Is The Micro VC Market Going with Samir Kaji @ First Republic Bank · IDENTIFIED FROM THE TRANSCRIPT · source
“And there's a lot of capital on the very late growth side, and some of this is coming from non-traditional investors, hedge funds, mutual funds. But if you look at C&D, there are very few investors that are actively investing in sort of that segment. And if you look at the valuations of BC&, I'm sorry, B&C companies, the valuations aren't overly bloated relative to what we see at the very later stage D and above. and also at the seed level. And so I think we are seeing an environment right now where I think there's opportunities at that C and D level where we have companies that have hit product market fitter in scale mode, have great growth metrics, but haven't seen massive upticks in valuation.”
2015-12-02 · The Twenty Minute VC · 20 VC 093: Where Is The Micro VC Market Going with Samir Kaji @ First Republic Bank · IDENTIFIED FROM THE TRANSCRIPT · source
“I think it's a very astute observation. I mean, I think if you think about it right now, there's a ton of capital at the seed stage vis- ⁇-vis both institutional seed as well as platforms like Angelus.”
2015-12-02 · The Twenty Minute VC · 20 VC 093: Where Is The Micro VC Market Going with Samir Kaji @ First Republic Bank · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I mean, there's certainly an element of that. So if you think about traditional venture firms, I mean, it's pension funds endowments, fund of funds, foundations, very little in the way of high net worth individuals. Most of the micro VC firms and about 48% or 25 and under in size, those typically have no endowments, have no pension funds, very rarely have any sort of institutional vacuum, but are primarily family office, high net worth backed. That said, funds that are $30 million and above typically have one or two institutional investors, typically a fund to fund or a small endowment, you know,”
2015-12-02 · The Twenty Minute VC · 20 VC 093: Where Is The Micro VC Market Going with Samir Kaji @ First Republic Bank · IDENTIFIED FROM THE TRANSCRIPT · source
“I think so. I mean, I sort of vacillate between the two in terms of if I'm thinking from an LP's perspective, I think a very few percentage of these micro firms are going to produce the type of returns expected. And I think it's going to hit sort of the normal distribution of which 10 to 20 percent have a nice return model the rest are going to sort of disappoint. But to me, the more important thing is what it does for the innovation economy, which I think is far more important. And so you sort of noted that, you know, there are more funding sources for these early stage companies of all types and sizes to be able to leverage early institutional capital. And I think that in itself far outweighed any sort of negatives of having too much money come in.”
2015-12-02 · The Twenty Minute VC · 20 VC 093: Where Is The Micro VC Market Going with Samir Kaji @ First Republic Bank · IDENTIFIED FROM THE TRANSCRIPT · source
“And I think, you know, if you think about what fuels that is, the fact that the companies that today that are gaining headlines or the Twitters and Facebooks, the Ubers of the world versus, you know, in the past, it was Sun and it was companies that were sort of below the fold. And so I think nowhere else to place money and the fact that there's a certain romanticism of investing in great companies and investing invest in great companies.”
2015-12-02 · The Twenty Minute VC · 20 VC 093: Where Is The Micro VC Market Going with Samir Kaji @ First Republic Bank · IDENTIFIED FROM THE TRANSCRIPT · source
“It's possible to do that, it's very difficult to raise a large fund. And the third thing is, you know, we've been in this, you know, sort of bull market for six years. Interest rates have remained low. Every other asset class is pretty expensive. If you think about real estate, publics, investing in bonds and a rising rate environment, there's nowhere to place money where you can get any sort of meaningful yield. And so I think investors, limited partners have looked at venture, which has become increasingly mainstream from where it was 20 years ago. Look at venture as a way to get alpha.”
2015-12-02 · The Twenty Minute VC · 20 VC 093: Where Is The Micro VC Market Going with Samir Kaji @ First Republic Bank · IDENTIFIED FROM THE TRANSCRIPT · source
“Out of his portfolio where a $25 million fund really only needs to manufacture one point five billion to two billion. So it's just from a pure mass standpoint, it's very, very difficult unless you are in a sequoia and getting into every single great company. You're a great identifier of talent. So I think it's purely a math thing and it's purely the fact that there's just there's only a few really, really game-changing exits that happen per year. Oh, I was going to say the other things that just the barriers of entry, right? So raising a $25 million fund is far different than raising a half a billion dollar fund that requires a lot of institutional backing. You know, I can go out and raise a $15 to $20 million fund by, you know, going to my friends, my family, a few close contacts and high net worth individuals, some family offices, and raising that.”
2015-12-02 · The Twenty Minute VC · 20 VC 093: Where Is The Micro VC Market Going with Samir Kaji @ First Republic Bank · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I mean, historically, I mean, if you think about a $500 million firm or fund, for example, that needs to generate a 3x net, well, that really translates to a 4x gross, which is $2 billion. And at an average ownership of 15% at exit, you're looking at a firm that needs to manufacture 14 to $15 billion of enterprise value.”
2015-12-02 · The Twenty Minute VC · 20 VC 093: Where Is The Micro VC Market Going with Samir Kaji @ First Republic Bank · IDENTIFIED FROM THE TRANSCRIPT · source
“And so, you know, people looked at that market and said, okay, well, it's very, very difficult for these large funds to actually earn that two to three X net return for LPs. The math just isn't there. There's not enough sizable exits per year to actually support those type of funds. And so people looked at it and said, you know, these smaller funds actually make sense. The math makes much more sense. And actually Kaufman Fellans did a great report evidencing that smaller funds tend to outpace the returns of larger funds. And so there was a lot of energy around people raising smaller funds.”
2015-12-02 · The Twenty Minute VC · 20 VC 093: Where Is The Micro VC Market Going with Samir Kaji @ First Republic Bank · IDENTIFIED FROM THE TRANSCRIPT · source
“meaningful, and as a micro VC you can run a fund that's twenty five million dollars, build a diversified portfolio by just investing small checks. And so the viability is there now because the cost of starting companies has come down so far. The second thing, you know, and this is something I observed back in 2009, I think everyone did, which is, you know, the performance of the venture industry over the past decade, decade and a half have been pretty bad. So if you look at 99-2002, the average distributions to invested capital was like a 0.9x. In other words, you could put money in a CD and earn five to ten times more than you would by putting money into any venture fund in 99 or 2000.”
2015-12-02 · The Twenty Minute VC · 20 VC 093: Where Is The Micro VC Market Going with Samir Kaji @ First Republic Bank · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, it's a very accurate term. So use the word explosion, and it's been nothing shorter that. So when I started really, really focusing on this space about five or six years ago, there was a handful, maybe a dozen, maybe a couple dozen micro VC firms. Today there's close to 300 globally of which 225 are here in the US. And there's another 50 to 100 that are fundraising. And so explosion is the right word. It's been this exponential growth curve. I think there's a few reasons. You know, the biggest reason really stems back to what we've seen over the last 15 years, which is capital efficiency of startups. Today, startups can get off the ground at 100th of a cost of what they had to sort of encounter back in 99 or 2000. And so a small 250,000 or 500,000 dollar check is actually.”
2015-12-02 · The Twenty Minute VC · 20 VC 093: Where Is The Micro VC Market Going with Samir Kaji @ First Republic Bank · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, I haven't seen too much of that yet. So, I mean, I think, you know, in general, if you sort of look at all the new micro VC firms that have been formed over the last, you know, four to five years, nearly all are between two and two and two and a half percent management fees. I do think we will start to see some that are more I don't know if we'll get to 0%, but I think we will see some firms raise funds where it's more of like a 1 in 25, a 1 in 30, and perhaps even higher carry based on hitting some performance metrics.”
2015-12-02 · The Twenty Minute VC · 20 VC 093: Where Is The Micro VC Market Going with Samir Kaji @ First Republic Bank · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, it's not. I mean, if you think about a 10 or $15 million fund that's putting out $3,000 to $400,000 in fees, especially in certain markets, the Bay Area New York, it's impossible to live. A lot of them have come from some sort of wealth. And so, you know, the pressure of using the management fee to live every day is just not there. And remember, a lot of those smaller firms, the GPs are actually writing significant checks as far as their GP contribution. I think the whole concept, though, is creating alignment with the LP and being more carry-focused. And fundamentally, if that first, let's call it $8 million fund as well, at least in the early days from a tracking standpoint, the thought is that you can start getting another fund online and now you have fees drawing from two funds. But originally, it's very tough to live up those fees.”
2015-12-02 · The Twenty Minute VC · 20 VC 093: Where Is The Micro VC Market Going with Samir Kaji @ First Republic Bank · IDENTIFIED FROM THE TRANSCRIPT · source
“And then, number two, I've just found the micro VC market to be very entrepreneurial. And so a lot of the VCs that are starting are really just running startups with the difference of just instead of writing codes, like their companies do, they're just writing checks.”
2015-12-02 · The Twenty Minute VC · 20 VC 093: Where Is The Micro VC Market Going with Samir Kaji @ First Republic Bank · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I'll say this first. I think the term micro VC probably isn't the best term. I'm not a big fan of it. But for lack of a better term, at least for this interview, we'll use it. Common characteristics of what people consider micro VCs or firms that are raising funds that are sub $100 million, typically $25 to $50, no more than about three partners, usually one or two and fundamentally are focused on investing in the seed stage. In terms of distinctive characteristics, I mean, I think the two observations I've made within the micro VC market, one, micro VC GPs tend to be very collegial, which is a little bit different than if you think about the traditional sandhill venture capital firms that are investing across life cycles that tend to have sharper elbows and are very ownership driven.”
2015-12-02 · The Twenty Minute VC · 20 VC 093: Where Is The Micro VC Market Going with Samir Kaji @ First Republic Bank · IDENTIFIED FROM THE TRANSCRIPT · source
“No, there wasn't an interfect, so I spent 13 years at Silicon Valley Bank, my first 10 years were working with technology companies, primarily Series A, Series B companies providing them things like venture debt. In 2009, post-Lehman and Bear Searns and the world blowing up, post a housing bubble collapse, I moved to the Venture Group at Silicon Valley Bank, did that for about four years, and then decided to make the move to First Republic along with a few other Silicon Valley bank employees. And my role right now is really focused on leading our team as it relates to early stage VC, a lot of micro VC, as well as working with early stage tech companies.”
2015-12-02 · The Twenty Minute VC · 20 VC 093: Where Is The Micro VC Market Going with Samir Kaji @ First Republic Bank · IDENTIFIED FROM THE TRANSCRIPT · source
“Aye, it took me a while it wasn't until probably two thousand four, two thousand five that I decided I actually liked working with inventure and tech. Think about it. I started in 99. A year later, the tech bubble burst. And I was looking at the world and saying, what the hell did I get myself into? And now I look back and consider that my character building year. But it was tough the first couple years sort of going through a downturn in retrospect, it was great learning experience. But it was around 2004 when I started seeing some of the companies I had worked with early on actually scale and become big companies and build. That's when I sort of knew that this was definitely the sort of the path that I wanted to take for the rest of my career.”
2015-12-02 · The Twenty Minute VC · 20 VC 093: Where Is The Micro VC Market Going with Samir Kaji @ First Republic Bank · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so it's a little bit of a funny story. And to be honest with you, it's a bit serendipitous. So about 16 years ago, I started at a bank called Silicon Valley Bank. And if you think about the times, this was, you know, 1999, the height of the tech bubble. And really at that point, anybody with a heartbeat could get a job. It was pets.com and web and some of the others. But at the time, you know, I was actually working, selling vacuum cleaners at a department store. And, you know, I had a lot of pressure from family and friends to actually get a real job and start my career. And I went on my school's job track system in the first posting with Silicon Valley Bank. I posted my resume on a Thursday, got an interview on Friday, and then Monday. I actually started.”
2015-12-02 · The Twenty Minute VC · 20 VC 093: Where Is The Micro VC Market Going with Samir Kaji @ First Republic Bank · IDENTIFIED FROM THE TRANSCRIPT · source