Wesley Dencker

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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In retrospect, 2024 was a pretty amazing year for innovation out of University of California, Berkeley. My Top 10 highlights below. Any I missed? 1. Databricks secured the largest VC round ever—a $ 10B funding round, led by multiple Berkeley founders. 2. OpenAI raised the 2nd largest VC funding round ever - $6.5B. Co-founded by Berkeley alum John Schulman. 3. Since launching Built By Berkeley (a newsletter that tracks Berkeley founded companies funding) in July 2024: 229 companies raised 27.4B. ~$1.1B per week raised by Cal founders! Wild! 4. Out of the 13 2024 Nobel Prize laureates - 4 had Berkeley connections. 5. Record-breaking Berkeley Olympic performance: 5 Gold, 10 Silver, 8 Bronze medals. More than many countries!  6. Berkeley-founded Perplexity emerged as a genuine Google Search competitor, reaching a $9B valuation (9x increase in a year) with 15M+ active users (probably already much higher than this). Along with some unbelievable execution speed from Aravind Srinivas and team. 7. Chatbot Arena, founded at Berkeley, became the industry standard for AI model benchmarking. 8. Rich Lyons became the new Berkeley chancellor. Rich will be a huge innovation catalyst for Berkeley. 9. Berkeley beats Stanford University 21-24 in the Big Game…not innovation but fun nevertheless.  10. Berkeley leads the PitchBook rankings with 1,642 VC-backed undergrad alumni-founded companies. 245 more than second-placed Stanford. Berkeley is shaping up to be ground zero of the coming AI wave from a company formation and research perspective. Looking forward to a bigger and better 2025.

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The insane story of how Retool (YC W17) went from zero to a $3.2 billion company in just 5 years 👇 David Hsu founded Retool in 2017, 6 months after he graduated from Oxford. As an undergrad, he started Cashew, a Venmo competitor for the UK, where he first experienced the frustration of building internal tools and admin dashboards. This frustration would inspire Retool. David applied to the W17 batch of Y Combinator with the mission of improving the internal tools experience. He experimented with various ways to position Retool, but couldn't drum up much interest. Until... One day, David sent a cold email to a startup called Rappi, telling them Retool "helps companies build internal tools faster." Rappi's CTO replied within 15 mins to request a demo. David had finally landed on positioning that worked! He continued to refine this positioning over the next few months and continued to leverage cold outbound as a way to reach his ICP. 9 months later, Retool had already hit $500k in ARR. After a year of growing the business primarily via cold outbound, David decided Retool needed a scalable inbound strategy. Turns out, this was easier than he thought. After launching officially on Hacker News, Retool began to get 15-20 new company sign ups every day 📈 To keep these new customers happy, Retool spied on them. No, not literally. But the Retool team had a notification set up whenever an error happened and made it their mission to contact the customer and fix the error before they even knew they had it. This helped immensely in building trust and a strong user community, and these early product evangelists supercharged Retool's growth. From there, it's been product led growth and traditional enterprise sales. In July of 2022, Retool raised a $45M Series C led by @Sequoia at a $3.2 billion valuation. They're a major player in the growing dev tools market and are one of the most successful recent YC companies. Key learnings: 1. Early stage startups can focus on outbound as a GTM strategy until they have 100% product market fit. 2. Companies can find product market fit via sales. Retool analyzed the feedback they were getting from emails and used it to change not just their messaging, but their product features as well. 3. Be customer obsessed to the point that it's almost crazy. A community of product evangelists is one of the most valuable growth engines a company can have. Thank you for reading! Source for this post linked here: https://buff(.)ly/4f5Pwcl ____ Find this helpful? Follow Jake Johnson for daily startup insights ⚡

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I'm excited to announce that Canapi Ventures has led OpenYield's seed round. OpenYield is redefining how bonds are traded and who gets to trade them. Despite being one of the largest global asset classes, fixed income has long lagged behind equities in terms of innovation. Outdated systems, fragmented liquidity, and barriers to access have made bond trading inefficient, opaque, and inaccessible to many, particularly retail investors.   OpenYield is changing that. By delivering an equity-like trading experience for bonds, the platform transforms the fixed income market into a space defined by transparency, efficiency, and access. With real-time pricing, seamless execution, and intuitive workflows, OpenYield is making bond trading easier and more effective for institutional players, market makers, and retail investors alike. This progress wouldn’t be possible without the exceptional leadership of Jonathan Birnbaum and Hilton Lipschitz, whose decades of experience in capital markets and fintech have earned them the right to build a category leader in this market. Also hard to believe that meeting Jonathan over 20 years ago led to this partnership today!   For Canapi’s network of financial institution LPs, OpenYield represents an exciting opportunity to enhance wealth platforms, attract new client assets, and deepen advisor relationships. As the competition for wealth clients intensifies, access to efficient fixed income trading will be a critical differentiator, delivering real value for customers and strengthening client loyalty. Thrilled to be partnering with Ben Savage and Ned Daoro at Clocktower Ventures. Shoutout to Harrison Kioko. More thoughts on our investment thesis here:

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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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Super helpful article and accompanying doc with a #Startup #Equity Calculator to determine the equity for early hires, thanks to Pear VC head of talent Matt Birnbaum! Thanks for sharing Pejman Nozad! 🙏🏼 You can read more here How to structure startup equity for early hires: https://lnkd.in/ggmpT5-Y Google Doc: https://lnkd.in/gjsvths6

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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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A new era of deep tech has emerged. First time funds will raise “unheard of” amounts of capital to fuel next gen deep tech startups - producing outsized, superior returns for LP’s compared to the rest. Prudent investors will act on this data and shift investment strategy as LP’s or risk being left behind savvy wealth managers and CIO’s / FO’s who saw this trend begin 4 years ago.

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Last week was huge for our Shared Future Fund partners given Y Combinator Demo Day and NYC Climate Week! We saw a marked uptick in YC companies working on climate with this recent YC S24 batch. Collaborative Fund is excited to support companies working at the intersection of AI and decarbonization / climate adaptation. Here's a snapshot of a few companies we're investing in: 🏢 RetroFix AI (YC S24): building software to help buildings become more energy efficient by maximizing rebates for builders and contractors 🎈 Sorcerer (YC S24): building the best weather balloons that collect 1000x more data 🔋 Ionworks: helping battery companies digitize their R&D by building and running battery simulations at scale 🏗️ Offstream: simplifies and streamlines compliance for carbon projects 🪫 Rewbi: uses AI to optimize grid-connected battery storage

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I’ve aggregated a list of 50+ VC roles in one spreadsheet. It’s updated weekly and can be filtered by location, position, firm, etc. Check out the latest list here (as of June 24th) 👇 https://lnkd.in/dRC3XtjS Tag someone who needs this in the comments 💭 — Want a quick snapshot? Here are a few of my favorite postings: Associate, M12, Microsoft's Venture Fund Link: https://lnkd.in/eNFaaSBy Associate & Principal, Wischoff Ventures Link: https://lnkd.in/gu6Mun7p Consumer Investor, Stripes Link: https://lnkd.in/eZdRk6jV Venture Lead, Struck Studio Link: https://lnkd.in/exGcNHJ5 New Ventures Associate, Live Nation Entertainment Link: https://lnkd.in/e3mBYGCt — I’m creating more tools, guides, and other free resources for Junior VCs to (1) 2x their network and (2) carve their path to partner. If you found this helpful, check out the Venture House website for more 👇 https://venturehouse.xyz/ #venturecapital #startup #recruiting #hiring

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I really enjoyed breaking in our new studio to sit down with Temporal Technologies Co-Founders Samar Abbas and Maxim Fateev for the latest episode of Founded & Funded. Temporal was founded in 2019 based on an open-source microservices orchestration engine project but is the result of a more than decade-long partnership between the two co-founders that spanned their time working on different iterations of the same thing at AWS, Microsoft, and Uber. In this episode, Samar, Maxim, and I dive into the challenges of building an open-source ecosystem while also working on a commercial offering and scaling a successful company, how to navigate and adjust a product roadmap in an ever-changing world of AI and large language models, and how to successfully build an early startup team, navigate through a CEO transition, and bring on a startups first independent board member. It's a very compelling conversation and a must-listen for every builder out there. Watch the full episode on YouTube: https://lnkd.in/gymf9sES Find other platforms and the transcript on our website: https://lnkd.in/ggRtnKtM Be sure to subscribe to our channel for more deep dives into cutting-edge technologies and the minds behind them. Don't forget to like, comment, and share this conversation if you found it valuable!

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Summary: Silicon Valley VC firm Menlo Ventures and AI startup Anthropic have announced a new $100 million fund to invest in pre-seed, seed, and Series A AI companies. Menlo Ventures will use its investment and close relationship with Anthropic to identify potential startups for future investments. The fund is open for applications and Menlo Ventures will also back subsequent rounds raised by promising companies. Key takeaways: The $100 million "Anthology Fund" will focus on investing in AI-first startups, leveraging Menlo Ventures' investment and relationship with Anthropic. Menlo Ventures recently closed a $1.35 billion fund and will use its proprietary machine learning tool to evaluate potential investments for the Anthology Fund. The fund is open for applications and will provide startups with $25,000 worth of credits to use Anthropic's models. Counter arguments: There is no guarantee that the investments made by the Anthology Fund will be successful, as with any VC investment. Menlo Ventures may face competition from other VC firms also interested in investing in AI-first startups, potentially driving up the valuations of these companies. #venturecapital #startups #vc

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He who has seen exponential growth understands and allocates. The ratio of founders or tech employees who are also small angels in SF is compared to European ecosystems multiple times higher. Allocations of pensions funds, foundations or endownments to VC asset class also higher. Sure, there might be legal (SAFEs) and tax reasons but the main point from my perspective is this. Once you experienced exponential growth first-hand, you understand, you can imagine it. And you start to allocate and support. Best place for that was and still is SF. Its harder to imagine exponential compared to linear growth. And there are not many good examples of exponential growth in Europe in last years. We somehow missed on cloud, mobile and also AI now. Europe driven by industry/manufacturing and private equity, US more by tech.

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I love YC Demo Day season. It’s an insane concentration of driven founders building something they deeply believe in at the frontier of tech. I know it's more trendy for VCs to complain about YC. But I believe Garry Tan when he says 5-10% of companies become worth a billion dollars. Maven’s hit rate from YC is even higher: 16% have had $B+ exits, and we’re trending toward a 40% graduation rate from Seed to Unicorn with investments we’ve made alongside YC. Since Maven’s founding in 2013, we’ve funded 12 YC startups out of the 66 companies we’ve invested in. Here are a few: Cruise: acquired by GM for $1B+ Embark: $4B SPAC, acquired by Applied Intuition Chariot: acquired by Ford before Series A May Mobility: raised $300M+ in follow on funding, including from Toyota Carrot Fertility: raised $100M+ in follow on funding, including from CRV and USVP Daybreak Health: Series A from Lightspeed, Series B from USV Moment Robotics: acquired by Cruise founder Kyle Vogt’s new company, The Bot Co (Maven is an investor) Our strategy differs from other YC investors. Many funds build a YC “index fund”, investing in many startups per batch. It’s not a bad move. But we focus on concentration, meeting all the companies in our thesis area and investing in one or two. Gratefully, I think every company from the list above can point to Maven as one of their most trusted partners that made a difference: intros to customers, closing follow-on funding from top VCs, connecting key hires, and offering genuine care and advice in both the best and toughest of moments. What are we looking for in a YC investment? 1) Team - a technical product team with startup DNA and hustle that can achieve a bold vision. Brilliant, determined founders no one would bet against who are ambitious enough to build an iconic company. 2) Vision worth fighting for - what are you bringing into the world that is worth all the time, effort and money required for success? Why aren’t existing solutions good enough? Are we proud to help bring this idea to the world? 3) Massive market - because of the valuation premium YC demands, even a $B outcome may not return today’s average Seed fund. Honestly, that math sucks. In order to pay the premium, we have to believe that if we’re right, we’ll be wildly successful. 4) Consumer trend - Maven invests in tech companies addressing emerging consumer trends. Even if some investments are B2B or B2B2C, they are always grounded in a consumer insight: autonomous vehicles in 2014, fertility care in 2017, mental health in 2020. Today, we’re looking at consumer applications of AI and frontier consumer health. Many successful companies we fund are outside of YC as well – like Zoom, Hello Heart, Epic!, Class, Wildtype. So we match YC’s Unicorn % across the rest of our portfolio, too 💪 YC founders in consumer tech and digital health: if you want to build an iconic company that delivers a positive impact for millions of consumers - I can’t wait to talk to you!

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We’ve been quiet at Redo, but it’s time to come out of stealth! TL;DR: Two years ago, Pelion Venture Partners led Redo’s Seed round and I joined the board, followed by leading their Series A last year. A month ago, I joined the team to help build the company. The below is just the beginning of a very special journey.. I don’t remember every pitch I've been in, but I remember nearly every detail of my first meeting with Tay Brown, the Founder of Redo, in March 2022. First, it was in my office, which was weird. But second, I knew Redo was special. There are three key things I look for in a company: 1. Founder has a unique insight. 2. Solving a very painful problem. 3. The monetization model can scale. Redo checked every box. Within five minutes of the pitch, I knew I had to invest and it wasn’t long before we signed a term sheet with Taylor and funded his Seed round. Benjamin Lambert joined me on the board, and Taylor got back to work. About a year into our investment, Redo started to show signs of product-market fit. At the board level, Ben and I helped find the right executive hires, like Paul Draper as CTO and Sterling Snow as an advisor. The team was crushing their goals and rapidly growing revenue. Last summer, Taylor called Ben and me with a bold idea: he wanted Sterling to take over as CEO. Taylor knew Redo’s potential and thought Sterling could grow the company even faster. After becoming CEO, Sterling raised a Series A from Pelion. We doubled down on our original investment with extreme conviction—something we've never done before. Since then, Redo has expanded revenue twentyfold, evolved from a single product to a four-product platform, and scaled the team from 10 to over 70 employees. A few months ago, Sterling asked me if I’d consider operating at Redo. I love investing, Pelion, and my team, but I knew I had to say yes. I’ve always craved challenges and growth—comfort actually makes me uncomfortable. I knew Redo would push me to reach my potential. Fortunately, Pelion is amazing and recognized that gaining operating experience would enhance my career as an investor, so they not only backed my decision to join Redo but also made it seamless by allowing me to remain on the Pelion investment team while I contribute to Redo's growth. 3 things that are true about Redo: 1. Sterling is the most exceptional leader I have ever known. With Sterling, you are at war and every day is a battlefield. He unifies and motivates the entire company around a shared vision and goal and challenges you to aim higher than you thought possible. 2. The Redo team is a group of exceptional leaders. I count myself lucky every day that I get to learn and work alongside them. 3. One thing that unites everyone at Redo is our shared fear of mediocrity. Everyone at the company is internally driven to work their hardest and be their best. It’s special to be a part of a group like that. This is just the beginning. To be continued..

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For all you AI and data needs this is worth being aware of.

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Super helpful #Startup #Equity Calculator to determine the equity for early hires, thanks to Pear VC head of talent Matt Birnbaum! Thanks for sharing Pejman! 🙏🏼 You can read more here How to structure startup equity for early hires: https://lnkd.in/ggmpT5-Y Google Doc: https://lnkd.in/gjsvths6

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