Dan Gray had me on Going Solo, Odin’s podcast for emerging managers and solo GPs. I’ve admired his venture research and writing for quite some time, so it was a privilege to join him when he asked me on as a guest.
We covered my years as an institutional LP, how Also underwrites Hard Tech, and what raising a fund actually feels like.
A few threads worth your time:
The bar for a new fund is a16z and Sequoia. At Cornell (where I spent 3+ years as an allocator), the alternative to any emerging manager was the next dollar into a top-tier platform. If you can’t show how you beat that by enough to cover the extra risk, you will struggle.
When underwriting early, assume the tech works. We ask founders to assume the physics cooperates, then work through a series of questions on enterprise value and how the company captures it. Expert calls on lasers, nuclear, space or robotics come last. They’re a gut check on whether the founder is taking the right amount of engineering risk, not a substitute for the business case.
Origination is about lending credibility. Bridgit Mendler hadn’t built a venture-backed company before Northwood. We agreed with the ground station problem she was solving, so did experts in our network. Her outlier track record paired with our depth of early work and sector credibility teamed to dramatically accelerate their early raise process.
Nobody needs another fund. It’s a luxury good, so LPs have to want it. Our Fund 1 took a year to raise. Fund 2 took about ten weeks. My advice for EMs: get into business and put money to work before you hit the full target.
We also got into what Dorm Room Fund borrowed from First Round to fight groupthink, why we backed Atlas on allied production while the zeitgeist was saying domestic manufacturing, and why my picture of the next ten years is robots everywhere.
Thanks to Dan and the Odin team. Listen here:
(also on Apple Podcasts, Spotify and YouTube).
Thanks for the time Mike!