I started investing in venture funds with a very lucky first investment back in 2004. I’m now at LaGuardia airport headed home after attending the 14th annual edition of the firm’s limited partner meeting. Yes, that first fund is still active 14 years later!
It is such a privilege to have a long-standing business relationship with good people. Sure, it helps that the returns have been great but I’ve also had the opportunity to see them grow and mature, to know them beyond the investments and to watch their team develop. To see brand new EAs grow to help run the firm, to see former analysts go on to become incredible GPs themselves. To see kids move from elementary to college and into the working world. This firm has been consistent in their fund size, limiting their growth to a few new partners of the same ilk, and carefully selecting any new LPs so that the overall size of the meeting has remained manageable.
I look forward to this trip every year. It anchors an opportunity for me to check-in with the manager but also to see the group of limited partners around the fund. Many of us have become friends and co-conspirators investing across several funds so that we see each other several times a year. LPs often form these informal alliances and this is one of the best.
What happens with all of this history together? You’re able to build real relationships and inspire a deeper connection to the companies and the partners. There is no need for salesmanship or portfolio cheerleading. Good returns give you the space but relationships give you the comfort to acknowledge the constant challenges of venture investing and share the inevitable issues that arise. A real partnership can absorb so much when you have good people around the table.
I hope that we have the privilege to develop this sort of relationship with many of our partner funds. To see these firms grow and have the success in not only investments but in building a real partnership of people and capital that form a community.
A final note – we were all very young in 2004!