Latest / The Learning Corner by Precursor / Episode #66: AI Fatigue Is Real, Patient Capital Will Eat VC, Building a GP Reference List

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Episode #66: AI Fatigue Is Real, Patient Capital Will Eat VC, Building a GP Reference List · The Learning Corner by Precursor

• 0:00
  One LP told me a funny thing.
• 0:01
  He goes, you know, a 100% NPS as a GP is a bad thing.
• 0:04
  I was like, what do you mean?
• 0:05
  He goes, it means you probably have never had a hard conversation with anybody or had to make a
• 0:09
  hard decision, and you've prioritized keeping people happy over doing the hard parts of your
• 0:13
  job.
• 0:14
  It's the week of February 9.
• 0:16
  Welcome to the Learning Corner, a Precursor Ventures podcast.
• 0:24
  Welcome to the Learning Corner by Precursor.
• 0:26
  I'm Mia Farnham, and I'm joined by our GP and managing partner, Charles Hudson, where we will
• 0:30
  be talking through the articles and Goodreads that caught our team's attention over the past
• 0:35
  week.
• 0:35
  Our first piece is from Siddhantkar titled AI Fatigue Is Real and Nobody Talks About It,
• 0:41
  exploring the paradox that AI is making engineers more productive on paper but more
• 0:46
  exhausted in practice.
• 0:47
  Dodon shipped more code last quarter than any quarter in his career, yet he's never felt more
• 0:51
  drained.
• 0:52
  His core argument is that AI reduces the cost of production but increases the cost of
• 0:57
  coordination, review, and decision making, and those costs fall entirely on the human.
• 1:02
  He's gone from being a creator and maker to a full time reviewer, and reviewing AI generated
• 1:07
  code is actually harder than reviewing human code because every line is suspect, because it
• 1:12
  all looks plausible.
• 1:13
  And beyond review fatigue, he talks about the FOMO treadmill, spending weekends evaluating
• 1:18
  every new tool and update across Cloud Code, Google, Amazon Q, and others only to see maybe
• 1:24
  a 5% improvement before the tools update again and invalidate everything he'd learned.
• 1:28
  But what scares him most is what he calls thinking atrophy.
• 1:31
  He describes being asked to work through a problem on a whiteboard with no AI, no laptops,
• 1:37
  and realizing he'd outsourced so much of his initial thinking and reasoning from scratch
• 1:41
  felt genuinely difficult.
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  Ultimately, Carr argues that the real skill of the AI era isn't prompt engineering or knowing
• 1:48
  which model to use.
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  It's actually just knowing when to stop.
• 1:51
  So we talked about brain atrophy and AI fatigue in a previous article where it was coined brain
• 1:55
  obesity, but that was written from the standpoint of more nontechnical individuals.
• 2:00
  This being written by someone whose entire career is technical, did it make you think
• 2:05
  about AI fatigue in a different way?
• 2:07
  You know, yesterday, I talked to one of our portfolio companies that's in the DevOps space.
• 2:12
  I don't think I can say their name yet, but they were doing something in the DevOps space
• 2:15
  around continuous integration and code quality.
• 2:18
  And I was talking to one of the cofounders, and he goes, yeah.
• 2:20
  We sometimes will see lines of code when we're trying to do continuing integration, and we'll
• 2:24
  go, no human would ever construct a line of code that way that must be AI generated.
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  And he's like, it's part of what's made this whole thing hard, which is the cost of writing
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  code and generating code.
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  It's come down tremendously.
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  So as is often the case, when the cost comes down, you just get more of it.
• 2:40
  Yeah.
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  But more doesn't always equal better.
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  And I had this experience.
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  You know, I'm like this bad junior engineer, intern level engineer now.
• 2:49
  And I was talking to a friend of mine who's been a software developer for his whole life
• 2:51
  who gives me a lot of advice.
• 2:53
  And I said, you know, every time I finish something, like, thirty days into using it, I
• 2:58
  know exactly how I should have architected it from the beginning.
• 3:01
  And he's like, welcome to software development, my friend.
• 3:04
  And what I realized is that these tools make it so easy to get started.
• 3:08
  You can skip all of the work you would have done around planning and thinking.
• 3:12
  And there's the temptation of, like, oh, I can just sit down at the terminal and bang away,
• 3:16
  and I'm gonna get usable code.
• 3:18
  It used to it should drive me nuts.
• 3:19
  Me and I I ran a software company and the engineers in my company, I'd see them sitting
• 3:23
  there staring at the wall or, like, throwing a tennis ball in the air.
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  I'm like, get to work.
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  Write and they'd be like, hey.
• 3:29
  We're, thinking through a bunch of architecture decisions.
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  I'm like, it looks like you're sitting in your chair.
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  And now I fully understand.
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  I mean, I always believed them.
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  I gave them a hard time.
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  But I didn't understand the importance of planning and thinking through, like, if this is
• 3:42
  the end state of the system, there are decisions you can make up front that will lock
• 3:45
  you into a path that will be hard to get out of or can give you the room to grow.
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  And that's the kind of stuff that, like, whiteboard thinking and planning really helps
• 3:53
  with.
• 3:54
  And I do think we've gotten to it.
• 3:56
  We're doing, I think, the natural nature thing, which is computers can write code.
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  Computers can write lots of code.
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  Let's just have computers write and ship lots of code.
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  I'm like, well, someone still has to review and clean it all up.
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  The same CEO I talked to yesterday told me something else interesting.
• 4:08
  He goes, this AI generated code works the best for people who already have mature code bases
• 4:12
  where the code can learn style convention and understand how it works.
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  I worry about these people who are starting from scratch who have predominantly AI
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  generated code
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  Yeah.
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  For that very reason.
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  The other thing that I've come to realize is when I finish something with Claude, it's ready
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  to go the instant.
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  It doesn't need to take a coffee break.
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  It doesn't need to go home.
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  And and it can feel oppressive because these tools are able to work twenty four seven with
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  no complaint around the clock, and humans can't do that.
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  So the question is, like, do you wanna try to match the output and style of the tool, or do
• 4:44
  you wanna use the tool to match your work style?
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  And I think a lot of people are like, well, I'm just gonna work all the time because my agents
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  can work all the time.
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  I'm like, but they're machines and you're a human.
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  Yeah.
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  Told you guys, like, when all the multiple stuff happened, I was like, this is the first
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  thing.
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  I'm gonna let other people be the guinea pig and early adopters and figure it out.
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  I'm just gonna watch it for two weeks because I think the cost of becoming an expert in this is
• 5:05
  high relative to, like, my perception of the benefit of doing so.
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  Yeah.
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  My Instagram has been flooded by everyday people running out to buy Mac minis to get
• 5:13
  their cloud bots started.
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  So I'm happy to stay out of that for a little bit.
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  I'm good.
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  It's fascinating.
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  Sidon also talks about there's a point of diminishing marginal returns with just working
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  with AI generated code too.
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  Specifically from my perspective, which is one of a nontechnical background, I totally
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  resonated with that.
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  I can get, like, to 80% creating something.
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  And then to get my output exactly where I want, every time I reprompt and recontextualize, it
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  gets me, like, half of a percentage point closer, half a percentage point closer.
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  And then he talks about how you spend way more time trying to write the perfect prompt versus
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  creating the best output, and that's where my technical expertise just shows because I don't
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  have that engineering baseline.
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  And I love the way that you said, even though you think that you're like a junior AI intern,
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  he does say that the best engineers that he works with kind of think about their AI coding
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  assistants as truly like an intern, that they have to do the first draft and really take a
• 6:10
  close look, but they can push out things pretty quickly.
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  I asked actually one of my friends who's in engineering.
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  I'm like, do you feel like it's like managing a person then?
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  And that's part of the issue is you really didn't have to manage as many people in your
• 6:21
  role and now you have to.
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  And he's like, kinda worse, I would say, because I can't hop on the phone and have a
• 6:27
  thirty minute conversation with somebody about, okay, so where did you learn how to do this and
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  why do you structure code like this?
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  Let's walk it through why this doesn't work here.
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  So to your point about if there's, like, a deeper database of historical code that's so
• 6:38
  much richer, but if you're building something from scratch, you don't have that.
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  So then you won't even know where things are shifting and changing.
• 6:43
  Yeah.
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  From your perspective, and we tinker around with AI tooling all the time, I guess, how do
• 6:47
  we strike the balance between knowing when to stop and not giving ourselves the best shot at
• 6:52
  upskilling in a consistently evolving space?
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  I mean, this is likely a a question for both technical and nontechnical folks.
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  So understanding, okay.
• 7:00
  Let's take a break.
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  We don't actually spend every weekend reviewing every single update and refresh of a new tool
• 7:04
  that came out.
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  I find myself spiraling as well, just wanting to be up to date on what's the latest.
• 7:10
  But, you know, at what point are you sort of like, what additional benefits are you gaining
• 7:13
  from spending five to six more hours on reviewing a new tool to do effectively the same
• 7:17
  things that you've been doing something else that works half as good?
• 7:20
  I found that I've gotten more productivity and joy from getting better at a smaller number of
• 7:25
  tools.
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  And instead of trying to be proficient in everything, I'm like, how do I get the maximum
• 7:29
  amount out of Cloud Code?
• 7:30
  How do I get the maximum amount out of make?
• 7:32
  How do I get the maximum amount out of, like, the things that I use as opposed to being like,
• 7:36
  oh, I can use, like, a 100 tools?
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  I just have found it's more satisfying to feel like I think I've gotten much better at Cloud
• 7:42
  Code, and I I've gotten much better at using APIs than I was before, which was, like, not
• 7:47
  capable at all.
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  There are lots of other people like, what about this thing?
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  I'm like, that sounds wonderful.
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  I am not going to learn how to use that.
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  I'm gonna stick.
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  Because right now, I feel like for the things I wanna build, I have sufficient tooling to build
• 7:58
  the things.
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  It's actually a nice constraint.
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  And if ever find there's something, oh, I can't build it with API access to Notion, Airtable,
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  make, and cloud code, then I start to ask myself, like, is this really something I should
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  undertake?
• 8:09
  Yeah.
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  Is this,
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  like, an educational project?
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  Is there a simpler way to build this?
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  Is there somebody who sells me a software product that would meet this need?
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  And maybe I think sometime next year, there's gonna be this builder backlash, which people
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  are gonna have a bunch of things that they vibe coded or spun up, but nobody wants to support
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  anymore.
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  And it's just gonna everyone's gonna like, oh, we built this thing, but nobody wants to
• 8:27
  support it.
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  And now, like, a bunch of the underlying APIs have changed.
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  It turns out maintaining software is not trivial.
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  And I think sometime in the next year, people are gonna realize even Vibe coded tools require
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  maintenance.
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  Well, our next piece is an article written on X by Will Manadis titled Patient Capital Will Eat
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  the World, and I genuinely enjoyed this one.
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  The article argues that traditional venture capital is fundamentally broken and must
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  transform into something resembling patient permanent capital structures or die.
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  The structural trap is that VCs are stuck in a doom loop.
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  LPs demand capital deployment on schedule regardless of market conditions.
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  Fund structures prevent obvious smart moves like concentrating capital, sitting on cash,
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  buying secondaries at discounts, or returning capital in general, VCs must stay busy.
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  They must deploy, must have opinions on every deal even when the smart move is maybe likely
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  to do nothing.
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  Will claims that the winners will be firms that build massive patient product agnostic pools of
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  unconflicted capital.
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  Structures similar to Berkshire Hathaway, sovereign wealth funds, or generational family
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  offices.
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  No deployment clocks.
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  No mandates.
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  No LP politics.
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  They can hold forever or sell tomorrow.
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  They can concentrate.
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  They can diversify.
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  And most importantly, they can wait.
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  Ultimately, traditional ten year venture funds will survive at the margins, but the bulk of
• 9:41
  capital and highest returns will move to permanent capital structures.
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  The funds that will survive are already making structural changes to their firms, he said, to
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  prepare for this change.
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  And the funds that won't will continue raising and deploying and marking up positions until it
• 9:54
  all fades away.
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  I mean, was largely an existential piece on venture as an asset class.
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  If you read it, we've talked a lot about how much venture has changed since it was a mere
• 10:02
  cottage industry.
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  How much of Will's perspectives and predictions do you personally agree with, Charles?
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  I think a lot of the things he mentioned are already happening.
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  They're just only happening if you're really, really inside the tent.
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  If you think about you know, there's a bunch of, like, snapshots in that post.
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  If you look at the kinds of deals that General Catalyst is doing, the kinds of deals that
• 10:22
  Andreessen's doing, the structural changes at Sequoia, they become a very different
• 10:27
  structure.
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  These are all structures that are being done in recognition that, like, the ten year fund life
• 10:32
  cycle I guess I would say there's a difference between the ten year fund cycle being dead and
• 10:37
  the notion of a closed end venture fund with a defined start and end point being done.
• 10:41
  I read this and I'm like, who what what fund manager wouldn't love what he articulated?
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  The question, do LPs love it as much?
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  And I think we're gonna try everything else before we get to the state of the world that
• 10:53
  Will describes.
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  I think we're trying right now a couple of things.
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  We're trying extending fun life and just saying, let's just all agree that ten's not
• 11:01
  real.
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  It's probably more like 15.
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  Know, the nice thing about a ten year closed end fund is if if in theory, if you're an LP
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  and it's end of ten years, you're like, I actually don't wanna give you the ability to
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  roll my money.
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  I actually just want it back.
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  This is the end of the road.
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  I'm not gonna give you permission to keep managing it.
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  Your job is to now liquidate these holdings and give me my money back.
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  Kinda nice to know that your money is locked up for ten years, and it's unclear to me that LPs
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  will have you know, someone told me there's a big difference between a three x fund in ten
• 11:26
  years and a three x fund in fifteen years.
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  If you look at it from a purely IRR basis, then the person's not wrong.
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  So at some point, I think what he describes works great if it's your money.
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  Right?
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  But with someone else's money, the ability to hold it for a really long period of time is
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  hard.
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  And so I think we need to solve two different liquidity problems in venture.
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  One is liquidity at the single position level, which I think he touched on, which is that
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  there's just not that many companies that the public markets seem enthusiastic to take.
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  So we have to find a way to get liquidity for private companies.
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  And you're seeing these big tenders and you're seeing these things happen.
• 11:58
  And we have to figure out how to get liquidity at the LP holdings level such that if an LP has
• 12:03
  been in a fund for twelve years, but these problems both have the same root, which is if
• 12:08
  you're in a fund that you've been in for ten years, it doesn't have a bunch of interesting
• 12:11
  companies in it, who's gonna buy it from you?
• 12:13
  The manager's not gonna buy it from you.
• 12:15
  It's not like a mutual there's no doubt, like, who's gonna buy it from you?
• 12:18
  And I think with this all the vintage folks call it concentration squared, and I I like
• 12:23
  that term.
• 12:24
  We live in a world where there's a really small number of assets that people seem very excited
• 12:28
  about, and maybe they're irrationally enthusiastic about them.
• 12:31
  And they have a bunch of other companies that are good and nobody cares, and nobody wants to
• 12:34
  buy them.
• 12:35
  And the ones that nobody wants to buy, it's hard to get them public.
• 12:38
  It's also hard to find a buyer for your shares.
• 12:40
  So you end up with a bunch of stuff where you're like, you have a 100 a company that's
• 12:43
  doing a 150,000,000 ARR in your portfolio, but if there's no bids for it, what's it worth?
• 12:47
  I could give you a pretty wide spectrum of ways to think about that company's worth, but if no
• 12:52
  one will pay you for it, it's probably not worth very much, even though it's a good
• 12:55
  company.
• 12:55
  And some of these new strategies that are emerging, like the continuation vehicles or
• 12:59
  opting into secondaries, it's interesting that we're gonna see more funds tried out because
• 13:03
  those aren't options available to every type of fund as well.
• 13:06
  There'll be newer things that come up that work for one type and then do not work at all for a
• 13:11
  different archetype.
• 13:12
  So I left reading the article wondering, if you weren't a mega fund and you look a lot
• 13:16
  different, how imminent is the death of your type of venture world in the way that he
• 13:21
  describes?
• 13:22
  I mean, when I talk to LPs, I tell them it's like the classic being in the middle is really
• 13:27
  hard.
• 13:27
  If you're really small like us, you can sell into secondaries.
• 13:31
  You have all of these, like, liquidity options that you can use because you're not on the
• 13:35
  board and because you're not a big shareholder and nobody basically, nobody cares.
• 13:39
  And if you're really big, you can create vehicles and you can invest in infrastructure
• 13:44
  that will allow you to hold on to things and your LPs will will allow you to do that.
• 13:48
  And also oftentimes, you're such a big shareholder that you can't sell.
• 13:51
  In the middle, it's tough because you're big enough that if you sold, people would maybe
• 13:54
  notice and care, but you're not big enough to have all the infrastructure of a fully built
• 13:58
  out RIA and a bunch of other products.
• 14:00
  So the problem is, like, all asset management businesses, the goal is to grow assets under
• 14:06
  management without regard to the quality of opportunity set out there.
• 14:09
  I talked to someone over the break, and I was like, well, what are you doing?
• 14:12
  Goes, I'm just not investing right now.
• 14:13
  I'm like, what do mean?
• 14:14
  He goes, I don't see anything I like, so I'm just not investing.
• 14:17
  You can do that as a GP if your LPs believe that you're not deploying capital because you
• 14:23
  don't see opportunities versus, like, you're just too busy skiing or hanging out or you just
• 14:28
  you feel lazy.
• 14:29
  And there I've had friends who at the end of, you know, in 2021 did the hard thing and just
• 14:33
  said, this is too insane.
• 14:35
  We're just, like, not doing it.
• 14:36
  This is, like, too insane.
• 14:37
  One last question on this one.
• 14:39
  From your perspective, what might be harder?
• 14:41
  Being an emerging manager, building a fund with no playbook to work off of right now since the
• 14:46
  industry's evolving just as you're getting kind of like your training wheels in motion, or
• 14:51
  being an established firm and needing to reimagine what's worked in your fund in the
• 14:56
  past to survive looking into the future.
• 14:58
  I would definitely rather be established right now.
• 15:00
  Because I think the other signals that LPs have been able to use in the past are usually, like,
• 15:05
  markups by big funds.
• 15:07
  And I think the big funds, in a lot of ways, are setting the agenda for venture because they
• 15:11
  have all the money.
• 15:12
  And they're like, these are the things we care about.
• 15:13
  If you wanna be a part of our club, you should invest in the things we care about.
• 15:17
  If you don't wanna be a part of our club, you don't have to.
• 15:20
  You don't have to.
• 15:21
  Well, our last piece is from Julia Maltby titled five tips for GPs, building a reference
• 15:27
  list that actually helps you close LPs, exploring how reference checks are one of the
• 15:32
  most important parts of LP diligence on fund managers.
• 15:35
  So much of the job is what she calls professional gossiping, texting someone who
• 15:39
  knows someone to get the kind of ephemeral information you can't extract from a memo or a
• 15:43
  deck.
• 15:44
  Julia walks through how to build a list that actually moves the needle.
• 15:47
  Pick references that showcase both investment skill and strong firm operations because being
• 15:52
  great at sourcing deals is very different from being a dependable communicative fund manager.
• 15:56
  Include co investors who reinforce your market reputation and back up the edge you're
• 16:00
  communicating in your materials.
• 16:01
  Make sure everything checks out.
• 16:03
  If you told a specific sourcing story, a reference better tell the same story.
• 16:06
  Choose LP references with nuanced context on why they invested, not just name brand firms
• 16:11
  that could appear on anyone's list.
• 16:12
  Include founder references where things didn't go as planned because the most powerful thing a
• 16:16
  founder can say is they choose you again even after a difficult outcome.
• 16:20
  And lastly, prep your references with specific stories so they can speak to you in the ways
• 16:24
  that will be most impactful.
• 16:26
  For yourself having the experience of an LP and GP, are there any specific tips referenced here
• 16:32
  that sound intuitive in nature but actually much harder to put into practice in real life?
• 16:37
  There's this tension between the people who know you the best and the people who, like,
• 16:41
  look most impressive on paper.
• 16:43
  And, you know, through the stuff I do at Scream Door and my small personal LP portfolio,
• 16:48
  sometimes people will say they'll put a reference, I'm like, wow.
• 16:51
  That's like a big name person.
• 16:52
  Then I'll email the person, yeah.
• 16:53
  We did a deal together.
• 16:54
  He's great.
• 16:54
  I'm like, what else can you tell him?
• 16:55
  No.
• 16:56
  He's great.
• 16:56
  He asked me to be reference, and I said yes.
• 16:57
  And I'm like, okay.
• 16:58
  Alright.
• 16:59
  Thank you very much.
• 17:00
  Super helpful.
• 17:01
  That didn't tell me anything at all about why I or any other LP should, like, give this person
• 17:07
  money.
• 17:07
  That that feels like a miss.
• 17:09
  When they list that, does that speak volumes to you more of, like, that decision to list them?
• 17:13
  It means one of a few things.
• 17:14
  And I think Julia's point is funny.
• 17:16
  What she described is now the way I did not do all of the things that she mentioned in here in
• 17:20
  our early funds, partially because I didn't know better and partially because it would have
• 17:24
  been hard to do.
• 17:24
  Yeah.
• 17:24
  I do all of these things and more now, and I think it's really important.
• 17:28
  And the best GPs I know will send me an email.
• 17:30
  Hey.
• 17:30
  I'm fundraising.
• 17:31
  This is the story I'm telling.
• 17:33
  I would like you to be a reference.
• 17:34
  Or even if you're not on my list, I think you might get called.
• 17:37
  And here's the story we're telling.
• 17:38
  Here's the companies we've worked on together.
• 17:40
  And I've thought really hard, how do LPs reference GPs, and what can I do to make sure
• 17:45
  the people who want us to be successful are armed with what they need to be successful?
• 17:49
  And also met people who give me references, and I'm like, well, this person's, like, kind of
• 17:53
  obscure.
• 17:54
  And you get on the phone, and the person knows so much about that individual.
• 17:57
  And I think you wanna strike a balance.
• 17:59
  For me, the most important thing on the reference calls is that the person can actually
• 18:03
  speak to your work.
• 18:04
  I think it's also always cool when you get LP perspectives from people who were on the GP
• 18:08
  side before or on the investing side before.
• 18:10
  I'm enjoying Julia's writing because I think it Yeah.
• 18:12
  It comes from a different place than a lot of other LP content.
• 18:15
  We also offer references for founders who are considering an investment from Precursor.
• 18:20
  So how deep is that overlap between the pool of people that you would recommend as in
• 18:24
  references for founders and then references for LPs?
• 18:27
  Like, what are the biggest distinguishing factors that you feel like Oh.
• 18:29
  Make you wanna put one on one list and not on the other?
• 18:32
  It's interesting.
• 18:33
  I think with LPs, there are some LPs I talk to who only wanna talk to really successful
• 18:39
  founders.
• 18:40
  I talked to an LP.
• 18:40
  It was very eye opening, the person was just like, look.
• 18:42
  If you have a bunch of founders who think you're the greatest thing in the world and
• 18:45
  you're super helpful and all those companies fail, I don't know what to do with that
• 18:49
  message.
• 18:50
  It means you're, like, very relevant to companies that are very unsuccessful.
• 18:53
  And I thought about it.
• 18:54
  I like, I know what you mean by that, and that's like a fair criticism.
• 18:58
  And I know some people who have one or two silver bullet references with really famous
• 19:02
  founders who will basically just say this person's great.
• 19:04
  You should give them money, and that's that's good enough.
• 19:06
  What I learned is everybody's looking for something different.
• 19:08
  I know some LPs who are like, I wanna know who the most successful founders think their most
• 19:13
  useful investors were.
• 19:14
  Because if that person can make Dario or Sam Altman really successful and they say this
• 19:18
  person is really helpful, that means something.
• 19:21
  And I'm sympathetic to the idea that hearing that somebody is an amazingly available,
• 19:25
  helpful, useful VC, and none of those companies have been successful, you're getting like two
• 19:29
  messages at once.
• 19:30
  Son, I also just as a general rule me, I assume that I just did a call with an LP this morning,
• 19:35
  and at the last five minutes, they asked me about two fund managers.
• 19:38
  I know I'm not on those people's list.
• 19:39
  Mhmm.
• 19:40
  They're just like, I know you're connected to them.
• 19:41
  What do you think of them?
• 19:42
  And I was like, oh, I didn't come into this prepared.
• 19:44
  I was like, what do you wanna know?
• 19:45
  So I just assumed that, like, most LPs who really wanna know who you are and what you're
• 19:48
  about are gonna ask many people who are not on your list what those people think of you.
• 19:53
  And that's just, I think, a good incentive to just try to be a good person every day and try
• 19:57
  to be helpful because you never know.
• 19:58
  One LP told me a funny thing.
• 20:00
  He goes, you know, a 100% NPS as a GP is a bad thing.
• 20:03
  I was like, what do you mean?
• 20:04
  He goes, it means you probably have never had a hard conversation with anybody or had to make a
• 20:08
  hard decision, and you've, like, prioritized keeping people happy over doing the hard parts
• 20:12
  of your job.
• 20:13
  And he's like, a 20 is bad too.
• 20:15
  It did it did make me think you're right.
• 20:17
  If I'm doing my job correctly at any point in time, there will be founders that are upset
• 20:21
  with me because I'm not doing our pro rata in their follow on round, or I'm not supportive of
• 20:26
  some decision that they wanna make.
• 20:27
  Yeah.
• 20:28
  And I get it.
• 20:28
  I mean, this is really relevant to her tip, which was including a founder reference where
• 20:32
  the story isn't a successful exit.
• 20:34
  It does feel like a more vulnerable move from what you had said earlier.
• 20:38
  Any guidance on actually what LPs would actually find remarkable on those calls?
• 20:44
  I'm trying to just differentiate between qualities that actually separate one of one
• 20:48
  fund managers from what's actually just like a really low bar for VCs when an investment
• 20:54
  doesn't go as planned, which is just like being a good person.
• 20:58
  So Yeah.
• 20:58
  I find with the folks where it's not a successful exit, the things that I would wanna
• 21:02
  hear if I was an LP would be like led with grace, really gave me the time of day.
• 21:06
  Is there anything else that should surface as more of, this is truly exceptional?
• 21:10
  I think the best LPs I work with generally are like, tell me what it is that you do and why
• 21:15
  you think you win.
• 21:16
  And do the people who I talk to tell me the same story?
• 21:20
  And I asked one of our LPs, like, well, what do you talk to the founders who it didn't work
• 21:24
  about?
• 21:25
  A lot of it is just, a, what role did you have in helping them figure out that it wasn't gonna
• 21:29
  work out?
• 21:29
  How long did you sort of stick around during that process?
• 21:32
  And more importantly, how does that founder feel about and one person was like, yeah.
• 21:36
  When the company wasn't working out, he ghosted me.
• 21:38
  And that LP was like, I'm actually okay with that.
• 21:40
  If it wasn't working out, while it would have been good from a relationship standpoint for
• 21:43
  that person to remain involved, I'm actually okay that person just said, this is not worth
• 21:46
  my time.
• 21:47
  And while the founder didn't love that, the LP was like, this is a GP who's doing with their
• 21:51
  time what I'd like them to do.
• 21:53
  I can give you other LPs who'd be like, oh, that's a terrible long term relationship
• 21:56
  management decision to make to cut bait.
• 21:58
  And part of it ends up being every LP has a set of beliefs about what makes GP successful and
• 22:03
  what are the most important things to do and get right.
• 22:06
  And to some extent, like, they're looking for people who embody their values.
• 22:10
  And if their value is that, hey, we stick with people till the end, the person who cuts bait
• 22:14
  isn't gonna rate us high.
• 22:15
  If their value is, hey.
• 22:16
  We just want you to spend time on the best companies that are winning and the ones that
• 22:19
  don't win.
• 22:19
  If they hate you, who cares?
• 22:21
  And I've met LPs with a wide variety of views on what a good healthy founder VC relationship
• 22:26
  looks like, and they tend to pick people whose values are aligned with theirs.
• 22:29
  Well, we are all out of time today.
• 22:31
  Thank you, Charles, for jumping in.
• 22:32
  Thank you to our listeners and subscribers for joining us well.
• 22:34
  Please like and subscribe, and we will talk with you all next week.
• 22:37
  Thank you.