For a fund such as that, you know, you have two thesis. Some some LPs would say, you know, don't have reserves. You know, put more checks in many companies, and that's how you would do it. And then there are others who are like, yeah, if you have a, you know, advantage in terms of knowing when to participate in future rounds, maybe you should have a reserve strategy.
“You know, put more checks in many companies, and that's how you would do it.”
For a fund such as that, you know, you have two thesis. Some some LPs would say, you know, don't have reserves. You know, put more checks in many companies, and that's how you would do it. And then there are others who are like, yeah, if you have a, you know, advantage in terms of knowing when to participate in future rounds, maybe you should have a reserve strategy. So So we actually tested and learned this, and this comes back to your original question of what do you do in zero to one and what do you do in one to five? Monetization is a sort of ongoing topic area, which means that, you know, that allows us to also think about pro rata rights or super pro rata rights in terms of how do we actually participate, let's say, in multiple rounds because there are different topics that we can actually help entrepreneurs when it comes to monetization. And we also like working with founders, in the engine room on core unit economics, which also gives us an advantage to say, you know, where do we double down or not? So we consciously chose that we will have a reserve strategy, but it was after much test and learn.
Why this clip
Clear breakdown of two distinct fund strategies with practical implications. The contrarian framing of 'two thesis' and specific strategic choices make this highly quotable for VCs and LPs discussing fund construction.
What they said next
So it's always when a founder asks us, can I invest in Cypress? So many of our LPs, our limited partners, are exited founders or exited executives from our teams that then invested in Cypress later on.
2:32 - 33s · Business Mechanics
More from this episode
From the blog
Want clips like this for your podcast?
We find your top 5-8 clips, write the hooks, and deliver ready-to-post content. First 2 episodes are free.
Get 2 Episodes Clipped Free