Hong Kim

LP Tip #20 out of #50: To re-up or not to re-up A re-up refers to an LP making an additional investment in a fund where they previously invested. Before we dive in I want to share that there are reasons an LP may not to re-up which are not in your control. Here is a short list: ➡️ The LP may have evolved their strategy and needs to scale back the #️⃣ of funds they invested in.   ➡️ The LP was never set up to re-up in the first place. ➡️ The LP could be an individual that found themselves in a cash crunch and overly exposed to venture.  I'm assuming that when you got your investment that the LP explicitly told you they do re-ups. Please do not assume they do. My expectation is also that the LP dug in to properly underwrite the fund. 🏴 Re-ups are not automatic. An LP will have to re-underwrite each fund. The speed of the re-up also depends on how much work was done in the initial investment, who led the investment, level of confidence there existed when that investment was done, and current pipeline of funds. There are 4 flags that may cause an LP to walk away. 1️⃣ Partner Breakups/Changes and Team Turnover:  The biggest risk in Partnerships are whether the Partners will stay together. One LP gave me a framework on how to think through this issue that has stuck with me. Partnership is like a marriage. If one feels there is potential for a breakup, does one believe it will be an amicable breakup? Or, does one believe the spouses will never talk again? If it is an amicable split that is manageable. The Partners can find a way to support the fund. Then the question becomes whether the LP wants to back the Partner/s that remain.  If there is high team turnover. The LP will want to investigate because team stability is used as a proxy for firm sustainability and ability to scale. 2️⃣ Fund Does not Execute on what they Sold the LP:  The LP “bought” something specific and typically it is because they were missing this strategy or wanted exposure to a strategy for the portfolio they were constructing. An institutional LP will invest and write a detailed investment memo flagging all the things you said you were going to do and then go back and compare when you come back to ask for money. If for example you pitched a generalist seed stage fund and you show up asking for money sharing that you invested in deeptech at A that will cause alarm. The same can be said for the number of companies you promised to invest in or check sizes you wrote. If there are big differences LPs will want to know why. 3️⃣ Bad Actions  The fund manager/s does something that is unethical. This is a no go for an LP.  What if the situation is not clearcut? This is different for everyone and requires discussions b/w GP and LP, but most LPs don't want headline risk. 4️⃣ Continuous Underperformance  If it's early days an LP will look at some key indicators to see how you are progressing over time.

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Kettleborough VC has been active for ~6 years, invested in ~30 companies, gone through ~80 funding rounds, witnessed ~12 exits including ~4 instances of partial principal erosion, seen ~4 seed to $100M journeys, tracking ~29% XIRR across the portfolio. A couple of IPOs from the portfolio surely seem very much in line ahead.

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Want a front-row seat to the frontier of tech? We’ve got the role (or two) for you! We’re expanding our frontier-tech team at Blackbird by hiring a Frontier Tech Investments Associate and Foundry Fellows! Got questions? We've got answers... 1️⃣ What are the roles? 🧪 Associate = a full-time VC investment gig in our Blackbird Investments team, working directly with me. We’re looking for someone with a science and/or engineering background and more curiosity than they can handle. You’ll grow your own investment brand and practice, support our portfolio founders, and will help build Foundry, our early-stage frontier-tech accelerator. ✨ Foundry Fellow = a casual/contract gig in our Blackbird Investments team, ~15h per week for 3 months. The Fellowship is ideal for PhD students and ECRs who want to learn more about startups and VC. You’ll go deep on emerging areas relevant to your expertise (or curiosity!), get a front-row seat to groundbreaking companies in those areas, build out your non-academic network, and develop a solid writing practice. 2️⃣ Why are you hiring? We love frontier tech, and we’re ready to grow our team. 3️⃣ Wow, it’s so great that you’re starting to look at deep tech! Look, we get it: we don’t make a lot of noise about our frontier tech investing. Buuuut we’ve been deep-tech investors since we backed Tim Kentley-Klay to found Zoox back in 2014—we’ve been on incredible journeys with PsiQuantum (building the world's first utility-scale quantum computer right here in Australia!), Inventia Life Science (transforming drug discovery with high-fidelity cell models), Remedy Robotics (surgical robots for remote endovascular procedures), Opto Biosystems (minimally-invasive neural implants to treat cancer), and more. We believe that frontier technologies, and great frontier-tech investing, will be part of the solutions to the greatest problems humanity faces today. 4️⃣ When do applications close? May 31st at 11:59pm AEST. 5️⃣ I have more questions! I’m sure you do! Clare Birch and I are hosting an AMA to answer any and all questions about these roles. Want to know what a week in the life of our team looks like? What’s keeping us up at night? What our ideal candidate looks like? Come along and find out - registration link in the comments 👇 Apply for these roles: Associate - https://lnkd.in/gCfj4EUJ Foundry Fellowships - https://lnkd.in/gj6ATZVZ If you know anyone that we should meet, send me their details! Cameron Elise Ben Andrew Robin Joseph Adelaide James Olivia Lucinda Raghav Jesse Christie Mohamed Tom Amee Pablo Haya Loong Hon Joshua Benjamin Megan Harry Denzil Matthew Diana Daniel Tom Deanna Justin Amar Lilly Stone Thomas

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Today is an inflection point for Breakout with the announcement of our $4.5m venture growth round led by the experienced team at RockawayX with participation from Mechanism, Round13, CSquared, IOBC, and Mentat Group. Operationally, we’ve accomplished one of the hardest feats — going zero to one. We currently have over 5,000 traders that have collectively traded over $12B in notional volume and we’re growing exponentially. It’s now time to take things to the next level with a stacked treasury that we can leverage to improve our product even further and get Breakout into the hands of tens of thousands of new traders across the globe. I often get asked what it’s like to run a startup and many times I don’t even know where to begin. Startups are HARD. I won’t get into the minutiae but after 4 startups and 16 years, the biggest takeaway for me has been that in order to succeed, you have to mentally overcome the fact that successful startups need to fall forward and constantly navigate unique obstacles without allowing any one of those obstacles to paralyze the company. This is a constant battle that is unachievable without a resilient team that all share the same mindset and entrepreneurial drive. Our team at Breakout is the best I’ve ever been a part of and our growth in such a short period of time could not have been achieved so far without each and every person involved. You know who you are, thank you. We’re going to continue to push the envelope and will have some really exciting news to share in the coming weeks on the product front. Stay tuned. https://lnkd.in/ezPs8pdE

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Friends, Q2 was a quarter of progress and learning for us at HawkTower, where we invest in early-stage startups applying breakthrough computing technologies to maximize California's natural resource markets. Our focus is on technology-enabled interventions (e.g., AI-enabled geospatial radars for lithium-ion batteries in the waste stream) for critical, market-level imperatives (e.g., disaster prevention) that can drive rapid commercial adoption (e.g., placed on every recycling truck in the world). Our current investment priorities are: - Agricultural productivity and efficiency - Biomanufacturing - Labor and mobility automation - Waste stream optimization and decarbonization - Disaster prevention and management Here’s a snapshot of what we’ve been up to: Milestones and Investments: - In late April, we officially launched our fund, filing with the SEC. Yay. - By June, we completed our first fund close ahead of schedule, with backing from family offices, foundations, high-net-worth individuals, and organizations aligned with California's future. - Our portfolio now includes three early-stage investments (Farm-ng, Agriful Software, and Nexstera Tech). Strategic Partnerships: - We believe that startups operating closer to their customers and resources, especially in agriculture and biomanufacturing, have a strategic advantage. For instance, the Salinas Valley, a major agricultural hub, is less than an hour from Silicon Valley and serves as a center of thought leadership in the convergence of agriculture and AI (from Western Growers, Taylor Farms, and others). - Similarly, the North San Joaquin Valley is emerging as a biotech and agtech innovation hub, and we are proud to support BEAM Circular, a startup hub for the circular bioeconomy. Key Relationships: - Karen Warner, CEO of BEAM Circular, joined HawkTower as a strategic advisor. - Jackie Cruz, Ed. D. Cruz, Hartnell College’s VP of Advancement, advises on Salinas Valley and workforce development. - Ben Palone from Western Growers, with his technical background in agriculture, became a trusted advisor. - Matthew Hoffman from Driscoll's Global R&D team provides insights on global agriculture, product positioning, and investment strategy. - We collaborated with Monterey Bay DART for workforce development and automation in agtech. - Dominic Milano and the Milano Technical Group from Merced collaborated on key initiatives and advised us on investments. - HawkTower is participating in Santa Cruz Works's accelerator cohort as a mentor and advisor. Thank you Doug Erickson. - We published an overview of entrepreneurship across the UC system with input from across the University of California system. Moving into the fall, we remain deeply committed to supporting founders shaping California's future natural resource markets. Stay tuned and be in touch! : ) Db

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What a week this has been for innovative companies in Seattle (first Smartsheet and now OctoAI). Today NVIDIA made public the news that they have acquired Madrona portfolio company OctoAI. Partnering with the founders since Day 1 (ok Day -1) has been one of the greatest experiences of my life. Luis Ceze, Jared Roesch, Tianqi Chen, Jason Knight, Thierry Moreau and Carlos Guestrin were all involved in the research and insights that helped create the TVM open source technology at the University of Washington computer science school and then the creation of OctoAI back in 2019 to drive commercial impact with this technology. From sorting out the terms of the original "pre-seed" round over a bottle of Caymus Vineyards wine to helping Amazon Web Services (AWS) understand the dynamics around the open source movement in Applied AI to learning our way in to product-market fit with the BEST inference optimization service available (OctoAI can help customers find their optimal fit of performance, customization, and cost), OctoAI has been the best! The company has helped set the table for AI-driven innovation for the years ahead and they will be a perfect compliment to the many capabilities at Nvidia. Luis, his leadership team, the board (including Carlos Guestrin Lip-Bu Tan and Mike Dauber) and so many "friends of OctoAI" know what a motivated, talented and authentic group of people are associated with this company. It is inspiring to see an acquisition at a total deal value of over $250 million in this highly dynamic and fast-moving phase of AI disruption. It is even more exciting to anticipate what will be possible with innovations powered by AI models and related technologies in the years ahead. Madrona has been investing in Applied AI for over a decade and we truly believe that we are just getting started! One of the hardest judgement calls as an investor and board member is to assess the benefits and risks of selling a company at a key inflection point in the journey. Nvidia made a compelling case that the impact for the OctoAI team and technology would be maximized within the market leader for AI infrastructure. I will be rooting every day that they all maximize this impact in the months and years ahead!

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During yesterday's LibreQoS APNIC webinar, I posed the question: won't more bandwidth solve these problems? As Herbert Wolverson said, yes, more bandwidth is good, but, still these problems remain if queueing is done incorrectly. Here's my take on why bandwidth alone is not as good as bandwidth + good queueing policies: Generally it was believed that 'data is important, so don't throw it away; hang on to it and send it later'. In practice, this has proven to be suboptimal as two issues may emerge: 1) latency increases for some flows due to heavy demand from other flows using the same bottleneck link, 2) even a single flow can have excessive latency due to aspects of typical TCP behavior (referred to bufferbloat) when the buffers grew large enough that the data being buffered was retransmitted anyway. It turns out that not all data is equally important. Active Queue Management is the art of deciding priorities, both in deciding what data to throw away, but also in allowing some later arriving data to be transmitted ahead of data in another connection that arrived before it. These problems have been studied, and good solutions have been found by using certain queueing policies in routers and switches, referred to as “fq_codel’ and “cake”. These track the different flows not by classifying the data, but by watching the behavior. Flows that send relatively little data (DNS lookups), or at a measured pace (video chat) have priority over flows that send a lot of data as quickly as possible (App and System updates, Video and ISO downloads).

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I recently saw this metric from Carta’s 1Q24 VC Fund Report, which is very concerning. DPI... is nowhere to be found in earlier vintages that probably should start showing DPI. Funding early-stage projects is great, but ultimately, these venture dollars need to exit their investments and pay back their limited partners. That’s where the metric Distributed to Paid-In Capital (DPI) comes in. While managing a fund, we get interim measures during the life of the fund (e.g. IRR, MOIC), but ultimately, “you can’t eat IRR.” If you want to build a lasting venture capital organization, you need to start showing DPI for your fund. Keep in mind that this is traditional VC data from Carta, and is not strictly crypto venture. Crypto venture tends to get liquidity earlier (tokens) and things tend to go parabolic sooner (faster, more unicorns) - but I’d wager that the data here is somewhat similar for Crypto VCs… Not as much DPI as there should be from these earlier vintages. Read the full article, as well as a recap of all the crypto fundraising rounds for August, here: https://lnkd.in/g3eVJ-iF

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Honored that Alex Rattray and the team at Stainless chose to partner with The General Partnership to build this company. APIs are the backbone of the digital world, powering transformative AI breakthroughs, seamless app experiences, and secure financial transactions. Yet, for developers, integrating with APIs remains an inconsistent and often frustrating experience. Alex Rattray saw this challenge firsthand at Stripe, leading efforts on API documentation and SDK tooling. Even at resource-rich companies, delivering world-class developer experiences proved elusive—tools were missing, tradeoffs were steep, and code often felt automated, not crafted. Stainless is changing that. By automating SDK generation while maintaining a handcrafted feel, Alex and his team are redefining what developers can expect from APIs. Today, Stainless powers the world’s most influential platforms—OpenAI, Anthropic, Meta’s Llama Stack, Cloudflare, LangChain, Writer and more. And they’re just getting started. That’s why we’re thrilled to see Jennifer Li at Andreessen Horowitz and Felicis join the journey to redefine API developer experiences. And one more thing: Stainless is hiring in NYC! If you’re passionate about reshaping developer experiences and working at the edge of innovation, now’s the time to join this incredible team. 🚀

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Exciting news! We just sent out the inaugural newsletter for Future Frontier Capital, our pre-seed venture fund backing frontier tech startups. As I hit "send," I realized how launching FFC parallels the path of the founders we support. Starting FFC has required the same passion, perseverance, and self-belief that drive entrepreneurs. Just like a startup, getting a VC fund off the ground demands relentless hustle—building the brand, perfecting the pitch, and networking tirelessly. There are constant challenges that test your resolve and endless hours of unglamorous work behind the scenes. And perhaps most daunting - the self-doubt, wondering if you're crazy for attempting something so bold. Pushing through that negative self-talk requires unshakable faith in your mission. Raising this VC fund reminds me of starting our IP strategy and patent analytics firm two decades ago. It’s a powerful reminder of the perseverance, creativity, and resilience needed to turn an ambitious idea into reality. This experience makes us more empathetic partners, ready to support the founders we back. Our work is just beginning, and this inaugural newsletter underscores our commitment to supporting frontier tech startups every step of the way. #startups #VentureCapital #EmergingManagers #Entrepreneurship #InnovationMindSet

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From Crypto Ice Age to AI Inferno- Gartner Curves or Extreme Weather Conditions Precipitated by VC? A few thoughts I've been reflecting on recently on learnings from being through many crypto cycles I can apply to this moment in AI investing... https://lnkd.in/d6KSM3EN

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Insightful breakdown from my great Partner Omri Amirav-Drory on the simple factors that really separate the top 1% of investors from the rest, and how more operators should become investors! https://lnkd.in/gEiZdT2h

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Dan Primack had some pointed criticism for #VC yesterday in his Axios Pro Rata newsletter (a daily must read IMO 😤). In short, the model doesn't work if it can't produce exits for LPs. Don't blame public markets (which are at all-time highs) for the lack of liquidity either. 📈 💸 Instead, this is a "liquidity drought of your making" where "...swinging for the fences on every pitch, rather than taking the single or double that's available" is the only way out when you invest at "sky high valuations." 😰 "A whopping 37% of "unicorns" are being held for at least nine years by VC funds, including 13% that are past the 12-year mark." 😳 ⌛ Is he right? Is VC at a dire inflection point? Or is Primack prematurely hitting the panic button? 🚨 https://lnkd.in/dts92pXr

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💰Sharing a List of 80 Black-led VC funds (US based): About this list: I realized that I couldn’t find a current list of Black-led funds as of 2024 when a lot of new funds have launched over the last couple of years including GPs Sydney Paige Thomas, Terri Burns and more. I have been gathering a list of these funds in my network, and that I could find publicly over time so wanted to share with the ecosystem. Only 2% of VC funds are Black-led: I found 80 funds (maybe there’s more!). There are 3,417 VC firms in the US (according to NVCA). Founders - These funds invest from pre-seed through growth, some with a focus on diverse founders, others more broadly. ⅔ of them have OPEN funding applications that I’ve linked in the sheet. LPs - As mentioned, a number of these funds might not be in the databases used for tracking, so hope to get some more Black-led funds on your radar! VCs - maybe there are some funds you should get to know for deal sharing, etc 👉🏾Link to full list here: https://lnkd.in/gktBhY-W

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It’s a milestone day – announcing Portal Fund II, an oversubscribed $75M fund, dedicated as the first, only, and best crypto fund exclusively focused on leading pre-seed protocol businesses. For an encapsulation of our work, see Evan's post below. In this post, I’d like to take a moment to share a more personal note on the journey. Truthfully, it feels surreal to see my face on the cover of Fortune Term Sheet. If I could go back to my 15-year-old self—“fresh off the boat” to Canada, struggling in an ESL program—and tell her this would happen one day, she’d surely look at me with an eye roll. VCs, by nature, are pattern-seekers. And as I reflect on my own path, the dominant thread is “know what you want.” From my first day at business school, I knew venture capital was the one true career for me. It was the purest form of epiphany, where seemingly random fragments of my life piece across stages together for a strikingly obvious picture - from my days as a lively child TV anchor in China to a nerdy, taciturn high schooler in Canada leading the science club to the Physics Olympiad - from six years of mastering storytelling in management consulting to gaining insights from some of the most successful companies in web2 and web3 to now inform best practices for my portfolio companies - from designing the crypto course for Wharton, organizing the UPenn Blockchain Conference now three years in a row, to now the dedicated pre-seed focus, in which proximity to talent is a key ingredient. Once you discover what you want with an unyielding will and a “whatever it takes” conviction, it materializes. The real work is figuring out what it is that you truly want, then letting your passion guide you. Here’s mine: to create the future in the present day on crypto rails, and let’s do it together. This milestone would also not have been possible without the most astute thinker, trusted partner, and my Bo-le (伯乐), Evan Fisher. Here’s to a spectacular Fund II and many more funds to come! Big shoutout to Leo Schwartz for the insightful piece & coverage & Anastasia Loureiro Yury Molodtsov MA Family for the amazing work! Fortune Article: https://lnkd.in/gtUqNEGV Evan's post: https://lnkd.in/gPgK2Zx5 X Announcement: https://lnkd.in/gGe83QNK

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