The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch

20VC: Why Small Markets are Better Than Big Markets, The Biggest Delusion of Early Stage VC, Why AI Investing is like a Horserace and Why The Most Ambitious Companies Growing the Fastest are not the Best Investments with Adam Fisher, Partner @ Bessemer

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Jan 22, 2024

Adam Fisher, Partner at Bessemer Venture Partners, shares his impressive journey in venture capital with over 60 investments and 23 successful exits. He debunks the myth that high-growth companies are always the best investments, advocating for smaller markets instead. Adam emphasizes the importance of recognizing effective entrepreneurs and the delicate balance of risk-taking. He discusses the evolution of VC from a boutique business to a more collaborative approach, while highlighting the nuances of negotiation and the significance of culture fit in hiring.

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INSIGHT

AI Horse Race

Adam Fisher avoids large AI seed rounds due to the competitive landscape.
Betting on AI companies feels like a horse race with too many well-funded competitors.

ADVICE

Base Hits over Home Runs

Aim for multiple base hits instead of home runs in investing.
Focus on manageable growth and surprising everyone out of nowhere, like Wix.

INSIGHT

Unpredictable Winners

Most venture returns come from a few deals, but predicting these early on is an illusion.
Retrospective storytelling creates false confidence in predicting winners.

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Adam Fisher is a Partner @ Bessemer Venture Partners and one of the most successful investors in Israel over the last two decades with seed investments in Fiverr, Wix, Melio, HiBob and more. Adam has now made over 60 investments and has had an incredible 23 successful exits. Adam has now been in venture for over 27 years having started his career at Jerusalem Venture Partners in 1996.

In Today's Episode with Adam Fisher We Discuss:

1. Lessons from 27 Years in Venture Capital:

How did Adam first make his way into the world of venture straight out of college?
Does Adam agree with Doug Leone that VC has changed from a "boutique, high margin business to a commoditized, low margin industry"?
What does Adam know now that he wishes he had known when he started in venture?

2. How to Pick Winners: 23 Exits in 60 Investments:

To what extent does Adam think pattern recognition is a good thing? When is it bad?
Does Adam prefer to invest in outsider founders approaching a problem with fresh eyes or insider founders who know the problem back to front?
Why does Adam believe that "category creation is BS"?
Why does Adam not like to invest in big, hugely ambitious markets? Why are smaller markets best?

3. The Deal: Mastering the Art of Negotiation and the Deal:

How does Adam reflect on his own relationship to price?
When doing an investment, does Adam think about who would do the next round?
How important is ownership to Adam? Does he want it all on first check?
Why does Adam not like to invest in hot AI rounds?
What have been Adam's single biggest investing mistakes? How did it change his approach?

4. Mastering the Art of Portfolio Management:

Why does Adam believe that it is impossible to know which of your portfolio will be the breakout winners early on?
How does Adam approach reserve allocations with this in mind?
How does Adam know when is the right time to sell a position?
What does Adam believe was the biggest sin of the zero interest rate environment period?