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

20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital

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May 29, 2023

Adam Besvinick, Founding Partner at Looking Glass Capital, shares his venture capital journey sparked by Twitter. He discusses the challenges of raising a $5M seed fund, emphasizing the importance of building a strong reputation and the role of personal relationships in securing limited partners. Adam reveals how his disciplined pre-seed strategy influences ownership stakes and reveals insights into market dynamics. He also critiques the role of multi-stage firms in seed funding and shares predictions for the future of venture capital.

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INSIGHT

Benefits of Thematic Investing

Thematic investing improves sourcing, deal flow sharing, and founder connections.
It builds credibility and helps Besvinick stay top-of-mind with investors and founders.

ADVICE

Round Composition Mistakes

Founders should broaden their fundraising funnel beyond household names.
They should also consider individual partners' motivations, not just the fund.

INSIGHT

Multi-Stage Funds Distorting Seed

Large multi-stage funds entering seed rounds have distorted valuations.
Besvinick focuses on disciplined founders who prioritize sensible raises and execution.

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Adam Besvinick is the Founder of Looking Glass Capital, a pre-seed-focused firm started in 2020. Before starting Looking Glass, Adam spent about 5 years at Deep Fork Capital and Anchorage Capital Group investing in pre-seed through Series C. Adam's portfolio across funds includes the likes of BigID, Transfix, NomNom, and Hone Health, to name a few.

In Today's Episode with Adam Besvinick We Discuss:

1. How Twitter Led to Founding a Venture Firm:

How did Adam make his way into the world of venture through Twitter?
What are 1-2 of his biggest lessons from working with the legend, Chris Sacca?
What does Adam know now that he wishes he had known at the beginning of his time in VC?
What do most young VCs misunderstand when it comes to reputation?

2. Raising Fund I: The Process:

How many LP meetings did Adam have to close Fund I?
What docs and materials did he have for the fundraise? How does he advise other managers on doing docs for fundraises?
How do different LP profiles want different things in the managers they work with?
How did Adam approach first vs final close? How does he advise others managers on closing?
How did Adam instil a sense of urgency in LPs to move and commit to the fund?
What are 1-2 of Adam's biggest pieces of advice to managers raising a first-time fund?

3. Looking Glass: The Very Disciplined Pre-Seed Strategy:

How did Adam decide on the fund size? Why is it the optimal fund size?
What is the desired ownership for Adam? What level of dilution does he expect across the lifecycle of the company?
What is the average check size? What is the average entry price?
How does Adam approach reserves and follow-on checks?
How does Adam reflect on his own relationship to price?
Why does Adam not like the majority of pre-seed micro-fund strategies?

4. The Market: Multi-Stage Firms Destroying Seed

Does Adam agree that "multi-stage firms have destroyed seed rounds"?
How does Adam advise founders when they have multi-stage offers and seed firm offers?
Who will be the winners and losers in the next 10 years of venture?
Why is it harder than ever to advise founders on fundraising rounds today?