#95 VC Deep Dive: Footwork + 20VC

Hi Everyone! 👋 Welcome to the new members of @TheFundCFO crew! We recently launched a paid tier and released our VC Fund Playbook + Models @ Streamlined.Fund! Re-linking some top 2023 posts: #67 Top VC CFO Posts & References & #65: WTF is Going On in VC (+ New Fund Model Data).

Every Tuesday/Thursday, we bring you actionable tools, real-world experiences, and insider insights for #VC CFOs/Finance Pros and fund managers, #LP investors, and industry enthusiasts/people who want to learn :). As a reminder:

• Tuesday: insights + interviews. Free for everybody.

• Thursday: deeper dives on VC GPs, CFO/COO strategy, more insights from LPs/GPs, and our take on what it all means (from 15+ yrs. of experience). Exclusive to Paid subscribers (most of whom expense these insights).

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“The distance between your dreams and reality is called action.” -Unknown

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VC Deep Dive Recaps & Links

Dear readers, thanks for all the great feedback on our recent VC deep dives! We’ve gone deep on some notable VCs & unpacked some insights around building generational firms (#93 VC DPI & Power Laws - What They Mean Today, #91 VC Deep Dive: Fresh Takes From Top VCs, #89 Brad Gurley (Benchmark) + David Sacks (Craft), & #87 Building Generational Firms).

There’s a lot of great content from notable VCs, LPs, and CFOs/finance pros on the internet. Here, we’re focused on pulling out the insights out that really matter, as well as finding the most current content that overlays historical lessons with current market dynamics, which are changing faster than ever.

Today, we’ll share some insights from the recent conversation with Nikhil Basu Trivedi (Footwork) and Harry Stebbings (20VC).

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Nikhil Basu Trivedi on 20VC w/ Harry Stebbings | E1057

A few weeks ago, I sat down in London with Harry Stebbings, founder at 20VC, for a wide-ranging conversation that was published today. Check out the podcast on Spotify or Apple Podcasts, or if you’d like to watch the video, it’s on YouTube.

Visual: Nikhil Basu Trivedi (Footwork) & Harry Stebbings (20VC)

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Background (from Nikhil)

Harry and I first connected back in January 2016, when I reached out to him on Facebook Messenger. He was an 18-year-old podcaster trying to get a job at a venture firm, and we met up soon thereafter in San Francisco and later that year for breakfast in the UK. It’s awesome to see what Harry’s built in the past 7 years, and it was a lot of fun to spend a couple of hours together for this episode. Key topics covered:

1. Why small funds outperform large funds

2. Strategy at Footwork

3. The weight we put on product-market fit in our investment decision-making

4. Great investments I’ve been a part of and ones I’ve missed

5. The hype cycle in AI

6. Raising funds from limited partners

7. Personal topics like parenthood, and more

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Top 20 Takeaways for LPs & VC GPs, CFOs, and Finance Pros

1. Don’t look at the title on your business card. Just think about yourself as a venture capitalist and do as venture capitalists do, which is 1) find, 2) decide, 3) win, 4) help, 5) exit

2. Exceptional companies deserve exceptions. Yes, you should have your model and dream of portfolio construction, but the exceptions/outliers are often the ones you can’t miss

3. GPs only vs. associates for founders? It’s case-by-case. The associates often grow up to be notable investors. Judge it by the conversation you have. Always give folks a chance, junior or senior. This started for Nikhil when he was junior at Insight Partners and then Shasta Ventures

4. The exception: Canva story at Shasta stands out. Based in Sydney, Australia. Raising convertible note on $25m valuation cap, no revenue, but early signs of product market fit. Six month retention looked strong for creators. Really interesting product and user group.

5. Small funds outperform, likely the only way to a 5x. Almost impossible with $1b+ funds. Example: $500m fund, 10% ownership requires $30b in exit enterprise value (impossible) to do 6x gross, 5x net.