During the last several years venture firms approached fundraising like trips to an All-You-Can Eat buffet: fast, frequent, and without regards for the digestive impact. As they piled more LPs into more fund vehicles, and then deployed that capital faster than ever, it’s not a surprise that everyone involved is now dealing with the after-effects of a decade-long gorge.
The volume of reactions from our industry peers surprised me— notes, conversations, backchannels and so on. Truly I didn’t think people would really care. I mean, we’re a small fund among lots of other firms! Homebrew became either a projection for people’s own frustrations with the venture model or a ‘true north’ for others who were considering similar evolutions but had something blocking them.
A) “Oh it must be so nice to not [x]”
Lots of comments directed our way that were really more just reflections on what the other person’s priorities rather than our own.
“Oh must be nice to retire!” Actually we’re still working the same amount (with some changes in the what and how — that’s coming in Part 2 of this post).
“Oh must be nice to be that rich!” Obviously you need to have banked some dollars, but this comment often came from people who, at least on the surface, live grander lives than I do. What we chose to give up was a bunch of future management fees, etc and then to go into pocket for a few years of investment capital (believing after that carry from earlier Homebrew funds would be recycled into our new model). What we actually might be is more risk seeking.
B) “I want to do this but…”
The most touching conversations were those with other VCs who shared some version of “I want to do this but I don’t have a Satya” [ie it’s lonely to do this by yourself] and “Me and one of my partners want to do this but if we left our firm it would break our commitment to the remaining GPs/hurt the fund.” Turns out there’s a meaningful number of folks who are conflicted about their firm’s growth and want to get back to smaller, personal investing, but are choosing to prioritize their exiting relationships (some with a firm plan to step down after next fund, others with a more noncommittal timeline).
In hindsight I guess I’m glad that people cared. Not because it reflected anything about our place in the industry but rather it showed me there are peers who also want to break out of venture’s self-commoditizing treadmill and create their own models.
In Part Two, I’ll reflect on what we got right and what we are still working on….