Origins - Inside Venture Capital, Hosted by a GP and an LP
OpenLP from Sapphire Partners
Hosted by a General Partner (GP) and a Limited Partner (LP), Origins dives into the venture capital ecosystem to learn how the people behind the money make deci...
Franchise Funds: Is Being a VC Franchise the Ultimate Goal with Thomas Kristensen
Thomas Kristensen, Partner at LGT Capital Partners, has decades of experience backing the top players in venture, but as an LP, doesn’t love the term "franchise fund.” He sits down with Bezer Clarkson, Partner at Sapphire Partners, to discuss why GPs can’t rest on their laurels, that being a franchise shouldn’t be every VC’s ultimate goal, and how LPs can dig deep to find firms with a great founder product– and avoid ones that may look like franchises but could have already peaked. The two also share their predictions for 2025 exits and why they think a lot of founders don’t want to be public company CEOs.Learn more about Sapphire Partners: sapphireventures.com/sapphire-partnersLearn more about OpenLP: openlp.vcLearn more about Asylum Ventures: asylum.vcLearn more about LGT Capital Partners: lgtcp.comFor a monthly roundup of the latest venture insights, including the newest Origins episodes, subscribe to the OpenLP newsletter – delivered straight to your inbox: subscribe.openlp.vcCHAPTERS:(0:00) Welcome to Origins(2:00) Are Franchise Funds Really Franchises?(7:49) What Counts As Performance?(12:03) How GPs Create (And Spend) Goodwill(15:45) A Consistent Founder Product(19:35) “There’s Plenty of Good Firms Out There That I Wouldn’t Necessarily Call Franchise Firms.”(27:08) Franchise Funds and Succession(35:43) Resting On Your Laurels(39:17) “A More Critical Year In Venture Than We Want It to Be.”
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42:50
Revisiting Power Law VC Performance with David Clark
Beezer Clarkson, LP at Sapphire Partners, revisits her conversation from 2023 with David Clark, Investment Director at VenCap International plc. In this episode, she and co-host Nick Chirls, Partner at Asylum Ventures, dive into David’s nearly four decades of experience in investing in some of the most established VC funds across the US, Europe, China and India. David shares historical figures on where to find performance in venture and his findings from a recently uncovered 30 year trove of data from 400+ funds with 15,000+ underlying portfolio companies. In this data set, he found that 50% of VC investments don’t actually return capital. So how does an LP unlock performance and find the enduring managers?Learn more about Sapphire Partners: sapphireventures.com/sapphire-partnersLearn more about OpenLP: openlp.vcLearn more about Asylum Ventures: asylum.vcLearn more about Top Tier Capital Partners: ttcp.comSubscribe to the OpenLP newsletter for a monthly roundup of the latest venture insights, including the newest Origins episodes, delivered straight to your inbox.CHAPTERS:0:00-Welcome to Origins2:46-30 Years of Data at VenCap6:10-Almost Always Working With Established Managers11:19-A Very High Breakage Rate Between Funds One & Two16:01-Figuring Out Who the Next Great Ones Are24:41-Having At Least One Company That Returns the Entire Fund31:26-Building an LP Program36:18-Building a Program Where DPI Matters42:06-Looking Back On Predictions for 202450:49-Looking for GPs to Get Ahead of the Curve
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56:22
Minisode: Franchise Funds: Grading Performance
Origins host Beezer Clarkson sits down with her colleague Laura Thompson, fellow LP and Partner at Sapphire Partners, to unpack her recent conversation with Jessica Archibald, a GP at Top Tier Capital. They discuss Jessica’s engineering-based analytical approach to answering the question “what makes a franchise?” and discuss some surprising things they learned - Jessica’s view that there’s only one real way to do succession, the importance of breaking good and bad news in a way that creates a performance culture, and whether or not they’re going to adopt Jessica’s policy of assigning letter grades to funds at Sapphire Partners.
Learn more about Sapphire Partners: sapphireventures.com/sapphire-partners
Learn more about OpenLP: openlp.vc
Learn more about Asylum Ventures: asylum.vc
Learn more about Top Tier Capital Partners: ttcp.com
Read Laura Thompson’s blog on why venture reserves aren’t always a good thing:
sapphireventures.com/blog/dirty-secret-venture-reserves-are-not-always-a-good-thing/
Read Laura Thompson’s blog on fund recycling:
sapphireventures.com/blog/fund-recycling-moves-the-needle-for-both-lps-and-gps-heres-how/
Read Laura Thompson’s blog on QSBS:
sapphireventures.com/blog/how-lps-gps-and-founders-can-leverage-qsbs-to-make-more-money/
Subscribe to the OpenLP newsletter for a monthly roundup of the latest venture insights, including the newest Origins episodes, delivered straight to your inbox.
CHAPTERS:
(0:00) - Intro
(1:08) - Jessica Takes It In a Different Direction
(3:41) - Communicating with your LP base (So There Aren’t Surprises)
(7:15) - Franchise Funds Are Intentional
(9:44) - Getting to 1x DPI in Nine Years
(15:55) - 2x is the new 3x
(19:43) - Giving Funds Letter Grades
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22:36
Franchise Funds: Metrics To Be Extraordinary with Jessica Archibald
Jessica Archibald is a GP and member of the Investment Committee at Top Tier Capital Partners, where she is co lead of the funds team and participates extensively in the capital formation efforts of the firm. She and Beezer Clarkson, LP at Sapphire Partners, sit down for the next episode in this miniseries on franchise funds - what it takes to build one, and how some firms lose their franchise status. Jessica digs into Top Tier’s numbers to discuss the importance of getting reliable DPI in a set timeframe, why it’s often better to bet on consistent 3x or even 1x returns, and the importance of succession in building a franchise fund.
Learn more about Sapphire Partners: sapphireventures.com/sapphire-partners
Learn more about OpenLP: openlp.vc
Learn more about Asylum Ventures: asylum.vc
Learn more about Top Tier Capital Partners: ttcp.com
Subscribe to the OpenLP newsletter for a monthly roundup of the latest venture insights, including the newest Origins episodes, delivered straight to your inbox.
CHAPTERS:
0:00 Welcome to Origins
2:10 Jessica’s Time with Top Tier
4:08 Fund Graduation Rates
8:43 Who is a Franchise Fund Today?
13:21 ”Is There a DPI Number Somebody Has to Hit to Be Considered Extraordinary?”
17:10 Can You Become a Franchise Fund By Doing Secondaries?
25:08 The Range of Strategies in Franchise Funds
31:32 Maintaining Franchise Status
35:33 What Do Founders Want?
39:42 ”Are You a Franchise Fund If You Haven’t Had Some Level of Succession?”
48:02 End of Year Guidance For New Venture Funds
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53:55
Minisode: Franchise Funds: Why do LPs & Founders Care?
Origins host Beezer Clarkson sits down with her colleague Laura Thompson, fellow LP and Partner at Sapphire Partners, to discuss her recent conversation with Stephen Bluestein, Partner of Primary Investments at Adams Street and formerly Packard Foundation, about what it takes to make (and potentially later break) a franchise fund in venture. Together, Beezer and Laura debrief their top takeaways, including: do the hallmarks of a franchise differ between GPs and LPs (or even amongst different LPs); how does a franchise produce a lights-out 5x or 10x fund at their fund size; is a consistent 2x net good enough; parallels of sports franchises; and, does the right to win with the best founders mean you will then deliver the best returns?
Learn more about Sapphire Partners: sapphireventures.com/sapphire-partners
Learn more about OpenLP: openlp.vc
Learn more about Asylum Ventures: asylum.vc
Learn more about Adams Street Partners: adamsstreetpartners.com
Read Laura Thompson’s blog on why venture reserves aren’t always a good thing:
sapphireventures.com/blog/dirty-secret-venture-reserves-are-not-always-a-good-thing/
Read Laura Thompson’s blog on fund recycling:
sapphireventures.com/blog/fund-recycling-moves-the-needle-for-both-lps-and-gps-heres-how/
Read Laura Thompson’s blog on QSBS:
sapphireventures.com/blog/how-lps-gps-and-founders-can-leverage-qsbs-to-make-more-money/
Subscribe to the OpenLP newsletter for a monthly roundup of the latest venture insights, including the newest Origins episodes, delivered straight to your inbox.
About Origins - Inside Venture Capital, Hosted by a GP and an LP
Hosted by a General Partner (GP) and a Limited Partner (LP), Origins dives into the venture capital ecosystem to learn how the people behind the money make decisions: How LPs choose VC funds to invest in, what drives performance in venture, the dos and don'ts of fundraising, what founders/entrepreneurs/CEOs need to do to raise a Seed, Series A and beyond, what it takes to go from emerging manager to franchise VC, and the latest private market trends and dynamics shaping the investment ecosystem.
Origins is co-hosted by GP Nick Chirls and LP Beezer Clarkson.
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