20VC: Lessons from 32 Years of Fund Investing | Why Exits Will Be Larger & Funds Sizes Bigger | Top Reasons to Turn Down Potential Fund Investments | Fees, Carry, Deployment Pace; What Do LPs Inspect When Fund Investing with David Clark, CIO @ Vencap

Posted on 25th March 2024 by Harry

David Clark is the CIO of Vencap, one of the leading fund of funds in the venture landscape. David has been at Vencap for 32 years and has been an LP his entire career.

In Today’s Episode with David Clark We Discuss:

1. From Unemployed Student in Love to Leading LP:

  • How did a girlfriend lead to David taking his first steps into the world of fund investing?
  • What does David know now about fund investing that he wishes he had known when he started?

2. Is Being an LP Harder than Ever Before:

  • Does David agree with Doug Leone, “venture has transitioned from a boutique high margin business to a low margin commoditised industry”?
  • Does David agree with Ryan Akinna @ MIT, “it is harder than ever to be an LP”?
  • Does David think that venture returns will worsen in the coming years?
  • Has the denominator effect for LPs gone? Do LPs have liquidity today?

3. What Makes the Best Performing Funds:

  • What are the single biggest commonalities in managers that did a 3x net DPI fund?
  • Of managers with a 3x net fund, how many had a single company return the fund?
  • How do the best firms do generational transition?
  • How do the best firms take cash off the table and sell part or all of their position?

4. Five Things LPs Hate In Potential VC Investments:

  • What are the two most common reasons David will turn down a manager?
  • How does David feel about the varying fee and carry levels?
  • How does David feel about the compression of deployment times of funds?
  • How does David feel about managers increasing fund size so significantly on every cycle?

5. Fund Sizes, Exits and Concentrating Returns:

  • Why does David believe exit sizes will increase and fund sizes could be even larger?
  • Why does David think that despite the above, the concentration of returns will be even smaller?
  • Is David concerned by the IPO window being largely shut and the increased regulation on M&A?

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