Alexa Binns 00:02
Alex, welcome to swimming with allocators. The VC podcast, from the LP perspective, with your host, Alexa Binns and Ernest. You ready? Let’s dive in.

Earnest Sweat 00:13
Welcome back to swimming with allocators. It’s one of our special episodes. They’re called DDQ, that’s short for discussion, debate and question. Alexa and I like to think of it as a Due Diligence Questionnaire for the entire venture ecosystem. And it’s we’re underwriting the entire industry. So every few months, we pull together what we’re hearing in the field from LPs, GPS and those interested in the tech industry and pressure tests where the market is really heading today. We’re talking about the art of storytelling and how it’s changing in today’s time. We also talk about, is chaos great for venture or just certain parts of the venture capital ecosystem? We debate if venture is even still a venture anymore, & we answer questions from our audience. So with that, look forward to our DDQ episode.

Alexa Binns 01:29
Okay, thanks earnestly for the intro. Let’s kick off the first of the DS summarizing what we’re hearing from LPs and the community. Something I have been picking up on is this, like high confidence LPS have in picking and accessing the right manager, but low confidence in picking and accessing direct deal flow. And I wonder if that’s a bit of a blind spot for LPS. You know that they have confidence in their ability to pick managers better than founders. But as we know, there’s most managers are not that great either, you

Earnest Sweat 02:21
Right, yeah, yeah, we’re I feel like this entire decade is just an inflection point on a lot of different things, but we’ll stay in the venture capital world. There’s definitely a high confidence from more and more LPS that they can find direct deals and high quality ones. And I’ve heard different I’ve probably mentioned this in another DDQ, but just as a reminder, like I’ve heard an argument from one LP was that because there’s so much consolidation within the VC, kind of like blue chip market, that kind of venture beta market, there are only 10 companies being funded anyway. And the main reason, if you’re an allocator, an LP, especially one that historically is invested in fund to funds. Your question is like, Am I really getting a diversity, like any diversity within the space? Am I getting any variety, right? The reason why I would invest in this fund to fund, or this fund manager versus this fund manager, is that I would get, like, you know, a variety, and be able to diversify my entire venture portfolio. And there’s an argument that, like, we’re not getting that in the marketplace right now, and so why not do why not I LP family office, do it myself? That’s one second thing that’s going on is, I think there’s just been, over the last two decades, a push from LPS that the fund to fund model needs to change. People are feeling, you know, certain types of ways about fees, and when the focus is on fees instead of a kind of dpi and opportunity that also leads them to do deals on their own. My point of view is that, I think that there is an opportunity for, you know, family offices and other LPs to do more direct deals, but they need to have the right talent in as well as they need to have the right mentality of how to approach venture and it’s not like, let’s say you’re good at it. You still have so many other asset classes to look at, right? Unless you’re pure like we only do venture capital, which is pretty rare. And so even if you’re good at it, the amount of time that your staff focuses on that, then you’re like, related to the dollar amount that you actually put in a venture. Yeah, it’s still kind of a missing alignment, because I still need to invest in real estate, I still need to invest in like Publix, I still need to invest in all these other asset classes.

Alexa Binns 05:20
Yeah, totally. I. I think that point that they’re pushing back in front of funds saying, like, why do I need you as a middle man is exactly the one I’ve sort of been observing, which is like this, confidence that they’re perfectly good at picking managers. Why? Why a self awareness that they’re not great at picking deals and not the same self reflection on picking managers. And I guess if that’s what you do, that’s what you do.

Earnest Sweat 06:13
Where do you think this goes ultimately, over this next, kind of like five years, where do you think this shakes out? What happens?

Alexa Binns 06:21
Well, I think Benedict, one of our guests, would have said, people stop trying to direct, and they build their own sort of fund of funds model. And that’s one option. I guess everybody has to learn for themselves, so maybe history just keeps repeating itself.

Earnest Sweat 06:42
Yeah, I think one family office, CIO, that I know from Philly, told me her prediction was that a lot more of these family offices will do direct deals and kind of like touch the stove on their own and kind of get burned, and then it will kind of like go back to the other pendulum swing of, hey, we need to find people. Either we’re going to invest in our, you know, have our own strategy of investing in funds, or we’re going to go to these people who have focused these, you know, storied fund to fund, and go to them who have a focus on it. So I think we’ll, we’ll have a resurgence of those dollars going back into fund to funds, going back into, you know, directly into fund managers as well. It’s just got to work itself out now. It’s not the best timing, because also we have all this consolidation happening, and you know that they were getting bigger and actually doing something different, and there’s a lot of fighting amongst the same dollars in this kind of Like seed, pre seed, and even series A funds, kind kind of like, the next thing I wanted to talk about was, I think a theme that we’ve heard throughout doing this podcast is like, how do you time the market And is advertising target? this change happening. So yeah, I don’t know if you have some thoughts on that, but it’s Yeah,

Alexa Binns 09:49
totally No. I think the professional advice givers are just stressing portfolio construction and stay. Seeing the course and anything that feels a little too rushed or a little hype, you know, that’s where they step in and say, you know, I this. This feels familiar. This feels a little bit like the zeppeira, etc. So I think it’s, I think it’s because that was their mea culpa, yeah.

Earnest Sweat 10:41
There’s also this question of like, all right, you have your set, or your favorites, or you know, your pipeline of fund managers. But now a question, actually, that I’ve been hearing more kind of on the topic of AI, is fund managers being asked, What’s your technology stack? And talking with a friend, it’s like, kind of, what are they kind of getting at there? Because, you know, there are a lot of tools. People are building their own tools. There’s tools off the shelf. And if that is, you know, if that’s becoming table stakes, it really makes me think, how do you articulate your differentiation? And you know what’s going to be, what’s really going to resonate with LPs?

Alexa Binns 11:30
Yeah, no. That also makes me think of the shift in even the concept of something like an opportunity fund that maybe two or three years ago, the pitch was, this is one of our big winners. We shouldn’t miss out on you as an LP should not miss out on the opportunity to be part of the one of the companies that we’re really close to and really believe in. Versus now, the pitch is, this is all more a complete full circle on how, how we expect to get you DPI so they’re having to build continuation funds, or they’re changing the pitch on what these, what these follow on vehicles are for include and including, you know, secondary strategies and Things like that, up front as part of the full story.

Earnest Sweat 12:23
Yeah, it’s just becoming harder and harder to differentiate, I think it is normal as a theme that we’ve had, but you have to be able to do it. And, yeah, you just, you just have to be able to do it. And it has to be a way that really works with kind of what you’ve done in the past, what your perspective is and had come, it has to come natural to you as a fund manager,

Earnest Sweat 13:34
What is it? You know, you know, what’s your reputation? What are people saying out there? It’s kind of like, what that idea of what’s your brand when nobody, when you’re not around, don’t you always

Alexa Binns 13:45
wonder what that, like one liner is when people would describe you, yeah, yeah. Like my friend Alexa, you know, she’s like, she’s like, the blonde from Menlo, and I’m technically not from Menlo, but I think that’s what everybody thinks.

Earnest Sweat 14:05
We were on the topic of, just like, how things are changing. And she wasn’t too fond of, kind of the direction of where venture was going, as I made the joke, of, like, I don’t know when we decided to go from

Earnest Sweat 15:13
blog posts to market maps to these well lit, you know, highly scripted fund announcements. But, yeah, it seems like, if you look at the dichotomy of those two kinds of types of brand, one everybody’s throwing out kind of the same, like storytelling tactics, right, you know? And so it’s like, blogs, videos, sub stacks, all this different stuff, such as just, you know, a whole bunch of chat GPT, like writing, totally. And then the other is like, Okay, how are we doing an in person event? How are you interacting with founders? Are you being able to develop these new kind of clusters of fellow investors and founders to help you get access to, not only sourcing, but more importantly, I actually think information and trust, because the overlay on all of this, this branding and storytelling, is that we’ve shifted from, just like you build it, they will come software SaaS era to now, like the era of AI, which is really services and and like, what’s important there is trust and distribution. And so storytelling is much more important. But you have to have perspective and be willing to be experimenting on things, because that first one, the digital you’re kind of looking for that dopamine hit and results in seconds, and I don’t know how fair that is to you in the industry we’re in. And then like, all the like hand to hand combat IRL, that has to be compounded on seasons of committed, like repetitive and iterating. So I don’t know it just this, this age of storytelling is really on people’s mind because it’s a surefire way to get trust and a way to differentiate yourself when it seems like everybody’s performing at the same time.

Alexa Binns 17:29
I think if you are a VC who’s working on your storytelling, you’re already doing it wrong. Your friend the COO, I have a similar girlfriend. She was just telling me, like, what, what am I going to post that hasn’t been posted? What new point of view is there possibly shared as a, you know, as a second party to the GP? And I think the issue is, like, you need to do your own thought leadership. Yeah, you can’t outsource the latest and greatest thinking to the lady marketer on your team. Yeah, that is not going to distinguish you. I’m sorry, yeah. So I don’t mean to disparage these women who are trying to do their best, but what they’re trying to pull out of these GPS is thought leadership, and you got to do your own thinking.

Earnest Sweat 18:27
Yeah, what? What is your Yeah, what is your perspective 100%

Alexa Binns 18:34
because then your two things align with what you were describing, what’s on the website, what blogs are getting posted, align with what your reputation is and what people are calling you for. Like, you’ve got to be at the center of whatever content you’re putting out there.

Earnest Sweat 18:49
Yeah, yeah, you’re totally right. If you’re asking the question of, like, What can I say that’s different? It’s like, you missed the whole point. It’s like, what do you actually like, believe? And sometimes, yeah,

Alexa Binns 19:02
yeah, I totally respect if you just don’t do it like talk about being authentic to yourself and your differentiation. There are people who have the gift of a gap. And if that’s not, you don’t start a podcast. Yeah?

Earnest Sweat 19:17
You know, yeah, yeah. If you don’t like talking to people and you’re not interested in asking questions, you probably shouldn’t start a podcast. If you’re more of someone who likes to pontificate and be by yourself and kind of write, you should do that. Or if it’s like, Hey, I like to hold conversations with people, or I like to just, like, be on Discord and do whatever people do on Discord. I’m joking. I know what people do with discord and like, Yeah, you should. You just do whatever it is that you’re doing, you should do it, and it should feel authentic exactly.

I heard some stats to this point of just like the impact that I agree with his point, venture does benefit, but who within venture benefits? So I was having a conversation with a mentor and friend of mine, and she’s been in the business, I want to say, like, 15 years, maybe plus, and she gave me these, these amazing stats that I’m going to like to read. I had no plans to bring this up until you made your point, but just some facts. So a very large, basically a very large PE fund that does some staking, had a stat that only 1% of new capital, like growth in capital over the last 20 years has gone to diverse managers and founders. So like, after all the work we’ve done over these 20 years, only like 1% growth, another stat, 40% of pension dollars in the US come from black and brown people, right? So when you think about firefighters, state workers and all that stuff like that, it makes sense, and I won’t name the state, but it’s a very large state in our country. So that’s like one of four. You can guess it has a, you know, three 60% of their kind of $300 billion emerging manager program comes from women or or POC tax dollars. Taxpayer, sorry, but only 2% was invested in diverse fund managers. And so what we’re getting at, if you look at I don’t stand in front of me, but a friend was telling me who works in this space, from the nonprofit angle, that, if you look at like, the statistics of how much, how many, how much dollars, how many dollars were invested in venture in like, 2000 2007 2008 and what that turned into, as far as market cap and value, but then the percentage of like, Like 98% of those dollars went to white male GPS like it, yeah, there’s, there’s something that needs to be changed. But we’re not like, I want everybody to like, we’re not in a whole like, kind of, well, it’s us. It’s really kind of like a call to action. Of like, I’ve always been like, if you’re someone who

Earnest Sweat 24:38
feels those numbers are startling and need to be changed and want to be a part of that chaos. For more talent to be able to, you know, have outliers,

Earnest Sweat 24:50
then we should do stuff. And so whether that’s me and my peer set creating new firms to be able to do that and provide kind of like. An option for, you know, building firms that’ll create industry leading returns, or if you want to mentor someone, or help someone meet LPs and all those things, or give money all those things. So it’s yeah, it’s both sobering yet I’m just an eternal optimist.

Alexa Binns 25:29
No, I think the stats you shared like this picture of VC being in its highest flying period, and the like least capital of all time ever going to women founders, hopefully, those stats teach us, all you know, to sort of reflect on how our how, what decision making. How are we thinking about our decision making right now? Why? Why this sort of flight to safety or familiarity, and is that really serving us all

Earnest Sweat 26:09
Next we’re moving to the next D of our diligence on the venture industry is debate, and I wanted to bring up something that has been coming up a lot, and it’s just a simple question, is venture still venture? That’s, I’m not trying to be meta, but it’s a, it’s a real question, with so many mega funds over the last couple of years, changing kind of like their SEC status, you know, increasing their strategies, different strategies, across different asset classes, not just venture and growth equity. And it’s kind of the kind of Black Rock unification of venture where smaller firms are now the only true ones taking venture risk. Or is it just like we’re just going to move to this world where the venture asset class is just a sub sector of these asset allocators, who essentially are owning technology strategies across, you know, credit, publics, privates and everything included.

, I like to hear your point of view, and then I can share my,

Alexa Binns 27:44
I think, from a founder point of view, you definitely like, whose money are you most interested in taking? There’s going to be names that are more attractive than others, right? But I do think you can be a really attractive source of capital to somebody for lots of different reasons. So maybe this goes back to your differentiation. But like, why is somebody going to take money from you? I do think that there’s room to answer that question in a way that’s, like, really compelling. I also think that a lot of this is, like trying to kind of like professionalize venture capital, and under the hood, even the big firms, there’s very little information to go on. Like this is, this is such a messy asset class. There’s so little data your founders are willing to share so little with you. Even if you’ve sat on the board for the Series A, the series B, the Series C, you get to series D, and they think you’re a dick. Like, you don’t get any details about what’s going on in the company. And so, like, I think, like, my exposure as a pre seed or an angel, like, I used to think, like, oh my gosh, I have so little influence. This is wild, like, I’m getting cut down and common, whatever that stuff is happening at every level. So I, I kind of think it’s, it’s a little bit of maybe blowing smoke that, you know, you suddenly have, like IR teams, who are helping produce a lot of paper paperwork, but I don’t know that there’s like, that much substance there at the end of the day.

Earnest Sweat 29:37

Earnest Sweat 30:01
yeah, I won’t give too much insight, because of that pressure. But like,

Alexa Binns 30:04
but like, they’re gonna, like, look under the hood of that, and they’re gonna be like, Oh my god, this is spaghetti.

Earnest Sweat 30:11
I actually, I actually disagree. Like, it’s one. I don’t know if this was reported, but like, there was a relationship between Goldman Sachs in this industry before, and industry has been one of the leaders within secondaries. And I think there’s a because of the liquidity issues we’ve been speaking about, there’s a huge opportunity for, like, there’s just white space for when we think of how long companies stay private now, of liquidity issues and people looking for secondary so that’s one. The other thing is, Goldman has had a history. I won’t name the firms, but I have buying, invested in people’s management companies before, so they’ve done their due diligence, and they’re really smart on that. So I think once these firms start, like, competing with people who spin up strategies all the time, like, Yeah, I’m a pretty smart guy. I think I’m a pretty smart guy. Maybe not that, but I’ve been in Wall Street, and so I kind of know that area a little bit. But if somebody put a gun to my head and said, What does black rock do? I think all I could come up with is that they make money, and so they’re really good at that, and that’s just a different game. And so for me, it’s a belief that, like, if that’s where they’re going, Yes, they’ll still be involved. They’ll do like, basically pre seed incubation, all the way to public, and maybe even back to private and public again, with some private equity assets. But that’s going to leave a huge chasm, I think. And I think, to your point, I agree about founders. I think we are getting smarter, even first time founders on understanding, hey, this is not an industry like Wall Street or even management consulting where we can have football fandom, right?
One question, I’d love to debate with you. Earnest. Leslie, I want to get her name right. Leslie, fine. Zag. Leslie, apologies, yes. Leslie z at Graham and Walker, I’m. Um, she created a piece that got a lot of traction. Investing mega funds have done well by catering to their limited partners that opens up an opportunity for smaller funds. It’s kind of her thesis, and I wanted to debate with you, who is the JPY customer? Is it the founder, or is it the LP i Hmm,

Earnest Sweat 35:23
That is an amazing kind of chicken or the egg question. I truly do believe this isn’t a cop out. I think both are your customers, and they go hand in hand. If you’re not getting great founders, you’re not going to get great LPs. And if you don’t have, you know, the back end of great LPs, you can’t take real risks to get great founders. So, I’ve been thinking a lot about this, as we kind of do the building up front, and also thinking about what is my own differentiation with stress wood. It’s, it’s like, how am I serving those two communities really well? And so I think there should always be alignment and how you’re working with both parties, but always remembering they’re both your customers. And sometimes I would say, frankly, like that. So that was my answer. But what I think the industry acts like is just LPs. It probably goes like, generally, like LPs, large LPs, top, top, top, top, top, top founders who’ve exited, okay, you know, mid size LPs, and then it’s like founders, and then, and then it’s like employees, like all the way down.

Alexa Binns 36:55
Now it is interesting that I think the LP as a customer is like much more. I think that’s sort of a recent aha for people. Maybe anybody who’s been through fundraising cycles, kind of like, always understood that, but I don’t know how now it just feels like the LP is like, really, who you’re, you’re, you’re building for. And my, I don’t know I would have said it was like the founder maybe 10 years ago. Yeah, that’s that. It was all sort of like, what do I do to attract, attract the best.

Earnest Sweat 37:41
The only analogy I was trying to think of that’s kind of similar, but the only one I can think of is back in my nonprofit consulting days and working with a, you know, different nonprofits, who’s their customer, yeah, is it the foundation that gives them a grant. Are they people that they serve? And so it’s kind of that same issue of you have to balance those two, yeah, at all times.

Alexa Binns 38:08
I think an example of people catching on that the LP is their customer is these, like pitch days. I think hustle, fun do them. I’ve heard of a portfolio, which is a group that invests in women. They extend invitations to their LPs to participate in things like their IC meetings on Mondays or like founder pitch events. And I think it’s like enriching the LP experience in a way that people didn’t go to those extremes before.

Earnest Sweat 38:41
Hmm, I could see that. And do you think, because there’s, like, more of a shift to LPS that, do you think founders are suffering from it, or generally, like, yeah,

Alexa Binns 38:55
kind of feel like people don’t have the capital, so they’re just like, I’ll worry about taking pictures from founders when I need

Earnest Sweat 39:03
Now you’re talking about, like, an existential question of like, what is your role as a GP to founders, and then, like this also a question of like, who are your customers? Is it because you are a founder? Is it the founder ecosystem, or is it the founders that I work with? Is it the founders that I interact with at any point? Yeah, is it the founders that are performing well, like what is it?

Alexa Binns 39:35
I will say, very early on in my venture career, I came to realize how important a few founder relationships are to you as a GP. For example, if your biggest wins are in companies where you don’t have extremely amiable relationships with those founders, they may as well not even be. In your track like, track record that at the end of the day, like each person has so few moon shot successes that you need that guy to give you an amazing reference,

Earnest Sweat 40:12
yeah, yeah, especially to get the other Yeah, customer, yeah, the LPs, yeah, totally.

Alexa Binns 40:20
So I do think Man, chicken or the egg, earnest is right. You gotta, you gotta treat your founders like princes, like because they I do think at the end of the day, like that’s what’s going to be on your tombstone is like early seed investor in X, and it’s a guy, it’s a guy who’s going to either speak up that you were super helpful or is going to blow you off because you just, like, meant nothing,

Earnest Sweat 40:47
or woman, yeah, I agree, although I’ve heard stories of, like, very well branded firms like being very hot and cold based on your own performance, but they can do that because they I don’t think they should, but they can do that.

Alexa Binns 41:03
I think tough love works for sure, like, but maybe not like writing somebody off and saying good luck,

Earnest Sweat 41:11
and then and then showing up after you see that they’re performing well again and being like what, speaking of showing up again. The next topic is, you know, we’re seeing so many. I actually saw someone’s post, and I wish I could credit them. Maybe we can put it up as we say it, sorry on the top of my mind, but they’re saying we’re definitely in peak AI is hitting peak mode now, because people, this person knew, who definitely don’t live in San Francisco, had San Francisco on their and have never lived in San Francisco have have San Francisco on their LinkedIn. And I thought that I cackled like you. But the question is, like, you know, many people are moving from New York back to SF, and you know, is San Francisco the only city to be in VC right now. Like, what are your thoughts on that, that? And as you think about that, I also have anecdotes of many friends, no matter where they live, just commuting there a lot. And we don’t have in the US high speed rail yet, or teleportation, which, come on, VCs get it together. And so people are just making that commitment. So before I give my point of view, I’m just curious what

Alexa Binns 42:37
you think. Yeah, is SF the only place to be right now? Are we just seeing a grand Exodus back there? After all this lovely work from home

Earnest Sweat 42:47
study, after the study abroad period ended, people got to graduate totally.

Alexa Binns 42:53
I think there’s a pretty good case for like, just go spend some time in SF. Peter Walker at carta put together some data on, like, what’s happening, where

Alexa Binns 43:04
$4 of every 10 is going to Bay Area based businesses. It’s like, far and away, where all the AI money is, New York is doing pretty well. His data shows it’s like across. It’s in, like, the top five across, like, most industry categories, Boston still just biotech, basically, consumer is La hardware actually too. In LA and like, we get, like, a nice little shout out to DC, Austin and Seattle, that there’s, like, maybe still underrated. There’s

Earnest Sweat 43:42
stuff happening, yeah, but I would

Alexa Binns 43:45
just move like SF, just just suck it up and go like, like, if you have an opportunity surround yourself with people who are smarter than you, just go,

Earnest Sweat 43:55
just, yeah, yeah. And as somebody who absolutely loves SF, I understand the quirks of it. It’s like especially if you spend a lot of time in the Midwest or New York and the east coast. It’s like the IPA of cities. Some people are like, too happy, but yeah, it’s a different place. But I would say, if this is an industry, you’re in this industry, I’ve seen people just commute to make sure they’re there at least once a month. And it’s very important, because you can read headlines, but that’s not telling the story. What you want to get is like insights that you would only hear by talking to individuals, running into those individuals, you know, giving your point of view and kind of hearing feedback and being able to iterate on it. And for those that are commuting, I think it’s also a special opportunity. Native, like, yes, it’s the epicenter of, like, where the creation is coming

Alexa Binns 46:53
Maybe also though, the pace, the demand, like the demands on You, yeah, I feel like right now, people are grinding in the bay, yeah? And I’ve just read the NVIDIA way, and I think like, just like, everybody’s gonna try to emulate Steve Jobs and go on talking walking, walk and talk meetings. Yeah? I think there’s gonna be this generation of founders who stare themselves in the mirror and try to pull off Jensen’s being like, you suck, and they don’t let their employees ever go home, and they’re they’re just saying we’re gonna work harder, and that’s the way we’re gonna win. And I think you kind of need to be in that environment to put in that kind of work.

Earnest Sweat 47:40
Yeah, yeah, at least Yeah, iron sharpens iron. So I think, yeah, that’s absolutely true. Cool. I think we can move if you want to lead start up questions.

Alexa Binns 47:55
And our last segment here on DDQ is Q for questions, earnest, a question from the audience, how do LPS rebuild conviction in an asset class after multiple down rounds, Mark downs and even zombie funds?

Earnest Sweat 48:15
Well, I think first there has to be a commitment to the sector in space. And in a recent episode that we had with Josh, I think he talks about the amount of time he had to place put in just learning the space and also understanding that, again,

Earnest Sweat 48:38
it’s an industry where you’re going to get results in seasons, not seconds. And so you’re going to make some mistakes, but that’s going to be compounding learning. And so you have to have that perspective of like,

Earnest Sweat 48:52
you know, I’ve been entertained and to like, learn about this space, and I’m getting constant education by, you know, talking to other people, making certain bets and funds, or fund to funds, but understanding that, like,

Earnest Sweat 49:09
there’s no perfect time to time the market, and you don’t want to come back, leave and then some fun that you were looking at or, or just the index of kind of like, different tech opportunities passes you by. So that’s you just got to have that mentality of like, I’m compounding learning, I’m

Alexa Binns 49:28
getting better. Yeah? Another question from a GP friend I was chatting with, he lays out that he’s got a family, family and friends coming in to his first fund. He feels responsible for them, but he also has an anchor LP who wants seriously preferential terms. So do you make an exception for a big check that’s going to make a major headway for you toward your fundraising goal? Or is that a slippery slope?

Earnest Sweat 50:00
I, you know, I can’t speak for everyone. I don’t think it’s a slippery slope. I think you need to make the judgment of, like, all right, how big is my fund going to be? How much of an impact will it be? Like, if someone wants preferential terms, but they’re only going to end up being maybe 5% of the fund, or even, like, if they’re really crazy terms, only 10% of the fund. I don’t know if it’s worth it, because anyone who would be bigger or provide even more signal would definitely want to get on top of those terms as well. It’s, I think it’s, you know, you should talk to other friends who have raised you but this is kind of more of an art on even building out what your funnel and process will be. I’ve had some friends who have focused just on potential anchors and just kind of focused on them, and kind of always have soft circled people. I’ve had other friends talk about the importance of when you do a first close and how much you should close in the first close, and actually having a mentality of, like, Okay, if I close at 50% what if that’s all I’m ever going to close so making sure you understand the strategy, and you aren’t like, hampering yourselves, or short cutting your strategy because you think you’re going to get more money, and so, like, all those things come together, but like thinking about how it’s going to impact you Long term, and not just looking for the short term, like a shortcut, totally,

Alexa Binns 51:24
no. We’ve had people come on the show talking about your minimum viable fund size. And maybe if you’re not getting the 2% management fee, you need to have an obviously, you have to have a bigger size fund, yeah. So like working backward, so that you can be honest with everybody who’s participating on how important that management fee is from the people that you are requesting it from. Next question,

Earnest Sweat 51:55
Someone from the audience asked, Have you made any commitments lately? This is to you, Alexa,

Alexa Binns 52:01
I’m excited about a couple. I made one LP commit and one angel deal. Lately Am I allowed to? I don’t know what I’m allowed to say. In terms of marketing, we can always learn perplexity. Can teach me and we can cut it. Recently, I’ve committed to Tommy leaps next fund, and Tommy was the Stanford tree when I was there. And for anyone who doesn’t

Alexa Binns 52:28
I know, like so funny, the tree is like the school social chair. He’s by far the coolest