20VC: Why Your Fund Model Should Not Rely on $10BN+ Outcomes, Why the Large Funds Got Too Large, The Rise of Solo GP’s; The Pros and Cons & Is Consumer Subscription Even a Good Sector to Invest in with Nico Wittenborn @ Adjacent

Posted on 22nd May 2023 by Harry

Nico Wittenborn is the Founder of Adjacent, one of the best early-stage firms created over the last 5 years. Before starting Adjacent, Nico spent over 3 years at Insight Partners in New York and before that learned the craft of venture from some of the best in early-stage, Point Nine, where he spent over 4 years. Nico’s portfolio across funds includes the likes of Revolut, Chainalysis, Oura, RevenueCat and PhotoRoom to name a few.

In Today’s Show with Nico Wittenborn We Discuss:

1.) From Selling Mobile Phones to Leading Early-Stage Investor:

  • How did Nico first make his way into the world of venture with Point Nine?
  • What did Nico learn from his time with Point Nine and Insight? How did his time at each impact how he invests and runs Adjacent today?
  • What does Nico know now that he wishes he had known when he started investing?

2.) Is Consumer Subscription Even a Good Place to Invest?

  • With Calm ($2BN) and Duolingo ($6BN) as the market leaders and there only being two of them, is consumer subscription even a good place to invest?
  • How does Nico pushback that retention for consumer subscription apps is so bad? What do many not see about consumer subscription retention numbers?
  • How does Nico respond to the challenge of high customer acquisition cost and navigating challenging platform shifts in advertising, when investing in consumer subscription?
  • What will the consumer subscription landscape look like in 5 years time?

3.) Adjacent: The Fund, The Strategy:

  • Why does Nico believe if your fund model relies on $10BN outcomes, you are in trouble?
  • How large is the latest Adjacent fund? What does the portfolio construction look like for the fund?
  • How much diversification is the right level of diversification? How many companies per fund?
  • How does Nico think about capital concentration on a per-company basis?
  • What are Nico’s ownership requirements? How have they changed with funds?
  • What is it about Nico’s structure which enables him to be more collaborative than others?

4.) Nico: The Investor: Lessons:

  • How does Nico reflect on his own relationship to price? When does he pay up? When does he not?
  • What has been one of Nico’s biggest misses? How has that changed his approach?
  • Why does Nico not really compete with the large multi-stage funds?
  • Why is Nico deliberately trying to reduce the amount of companies that he sees?

5.) The Future of Venture:

  • How does Nico analyze the rise of solo GPs? What are the biggest pros and cons of the model?
  • Why does Nico believe the large generalist funds are in trouble?
  • Who is set to win and who is set to lose in the next 10 years of venture?
  • Which seed firm would Nico invest in? Which Series A firm? Which growth firm?

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