The Twenty Minute VC (20VC)/20VC: 50% of Funds Will Go Out of Busine...

The compensation that the GP gets from the management fee is typically greater than the upside. Let's say you have $10 billion and you charge 2%. The minute you close the fund, you already made $200 million.

The Twenty Minute VC (20VC) · 20VC: 50% of Funds Will Go Out of Business | Why Growth...

“the compensation that the v that the GP gets from the management fee, especially if you, account for time value of money, is typically greater than, than the upside.”

41:26 / 41:43

the compensation that the v that the GP gets from the management fee, especially if you, account for time value of money, is typically greater than, than the upside. So let's say you have 10,000,000,000 and you charge 2%. The minute you close the fund, you already made $2,000,000,000

Why this clip

Exposes a controversial truth about VC economics with concrete math ($10B fund = $200M guaranteed). Challenges the narrative that VCs are aligned with performance when management fees dwarf carry for large funds.

41:26 - 41:4317sBold/Contrarian

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What they said next

Despite being an LP, I don't actually get paid until the LPs got 100% of their money back. I don't see a shekel, a dollar before they see the money back. I'm 100% substance, 0% appearance.

40:51 - 30s · Business Mechanics

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The Twenty Minute VC (20VC)

Business Mechanics

I'm the biggest LP in every one of my funds. About 13, 14%. And I don't have any LP who's more than 10%. And on top of it, I have 30% carry. So really, I'm 40 something percent of the economics.

Reveals a contrarian fund structure where the GP takes massive personal risk and upside. The specific percentages (13-14% LP stake, 30% carry vs standard 20%) make this highly quotable and demonstrate radical alignment that challenges industry norms.

39:26 - 40:2053s

The Twenty Minute VC (20VC)

Practical Framework

Every investment I have to ask myself, is this company a likely beneficiary of AI or not? If the answer is that they're a victim of AI, obviously it's an easy answer. But even if the answer is neutral, still the answer is probably no.

Provides a clear, actionable decision framework for AI-era investing. The binary thinking (beneficiary vs victim vs neutral = no) is memorable and addresses the biggest question facing VCs today with specific methodology.

7:02 - 7:3937s

The Twenty Minute VC (20VC)

Business Mechanics

Despite being an LP, I don't actually get paid until the LPs got 100% of their money back. I don't see a shekel, a dollar before they see the money back. I'm 100% substance, 0% appearance.

Demonstrates extreme GP-LP alignment that's virtually unheard of in venture. The 'substance vs appearance' framing and colorful language ('shekel, a dollar') makes this highly memorable and shareable.

40:51 - 41:2030s

The Twenty Minute VC (20VC)

Practical Framework

If you have a piece of software that's fairly simple, then someone can write it quickly and maybe price it lower and have better functionality. Those companies are at risk. But the more operationally complex the business is, the harder it's gonna be.

Provides clear investment thesis for AI disruption based on operational complexity. Simple vs complex software framework is actionable for investors and founders trying to assess AI vulnerability.

10:03 - 10:4239s

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The compensation that the GP gets from the management fee is typically greater than the upside. Let's say you have $10 billion and you charge 2%. The minute you close the fund, you already made $200 million.

Transcript

Why this clip

More from this episode

I'm the biggest LP in every one of my funds. About 13, 14%. And I don't have any LP who's more than 10%. And on top of it, I have 30% carry. So really, I'm 40 something percent of the economics.

Every investment I have to ask myself, is this company a likely beneficiary of AI or not? If the answer is that they're a victim of AI, obviously it's an easy answer. But even if the answer is neutral, still the answer is probably no.

Despite being an LP, I don't actually get paid until the LPs got 100% of their money back. I don't see a shekel, a dollar before they see the money back. I'm 100% substance, 0% appearance.

If you have a piece of software that's fairly simple, then someone can write it quickly and maybe price it lower and have better functionality. Those companies are at risk. But the more operationally complex the business is, the harder it's gonna be.

From the blog