LPs and the Case for Emerging Managers

Jason argues emerging managers historically deliver top vintages while Max recommends a barbell LP allocation.

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Episode notes

Jason Demant just joined GTMfund as Partner, Head of Networks after 6 years at Foundation Capital where he reviewed over 1,000 emerging manager funds and invested in 100+.In this episode, Max (GP), Paul (GP), and Jason break down what separates the VC firms that survive from the ones that quietly die, why the best founders today are skipping mega funds at pre-seed, and what LPs are excited in about emerging managers.What we cover:

The real reason raising from mega funds at pre-seed can backfire
Why less than 10% of VC firms ever make it to Fund 3
What makes an emerging manager fundable (sourcing, founder support, durability)
The media flywheel that gives certain funds an unfair advantage
How LPs should think about mega funds vs. emerging platforms (the barbell approach)
Why founders are the ones now choosing their investors, not the other way around

Connect with Jason: / jasondemant

Connect with Max: / maxaltschuler

Connect with Paul: / paulsirving

GTMnow is the media extension of GTMfund, a venture capital firm investing in early-stage B2B companies. Every episode features operators, investors, and founders on the front lines of go-to-market.

Timestamps:

0:00 Intro

1:54 Jason's Background at Foundation Capital

3:07 Why Jason Chose GTMfund

4:35 How Media Has Evolved in the VC Ecosystem

6:20 What Separates Winning Emerging Managers from the Rest

8:28 GTM Fund's Flywheel: Fund, Community & Media

10:41 Building a VC Firm Is Like Building a Startup

12:31 Emerging Managers vs. Mega Funds (a16z, Lightspeed)

14:01 Why Top Founders Are Picking Emerging Managers for Early Rounds

16:36 The LP Perspective: Emerging Managers vs. Platform Funds

18:39 The Barbell Strategy for LP Portfolio Construction