The Partnership - AVC

First, most venture capital firms use antiquated business models that prevent them from being able to move quickly, reach scale, and establish strong competitive moats. Most venture firms are built on a partnership model, like law firms.

But what could a future-proof venture firm look like if it was built from scratch? These are the most common ideas that have come up in my conversations- Visionary leadership- An org chart that reflects value-creation- Product-led value proposition- Incentivizing collaboration and apprenticeship internally- Intellectually honest decision making

Of these companies that become well financed we only need 15–25% of those to pan out to return 2–3x the fund. But this is all driven on the assumption that we didn’t write a $20 million check out of the gate, that we didn’t pay a $100 million pre-money valuation and that we took a meaningful ownership stake by making a very early bet on founders an... See more

One of the most important things a General Partner (GP) needs to consider early on when starting a venture fund is their portfolio construction strategy. Portfolio construction will impact nearly every aspect of running a fund, including return performance.