Discover/The Full Ratchet/Investor Stories 453: Founder Led Capita...

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.

The Full Ratchet · Investor Stories 453: Founder Led Capital Flywheels,...

“So it's always when a founder asks us, can I invest in Cypress?”

2:32 / 3:05

Today's special segment, we have Vince Shea of Cypress. What's the best question a founder or investor has asked you? So the best question a founder or investors ask is actually the best question that a founder and investor has asked. 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. I'm an example of that. I was a portfolio company then a limited partner, and now obviously a general partner as well. So that's the next question I received.

Why this clip

Reveals a powerful flywheel mechanism where portfolio companies become LPs. The specific example and circular nature of the relationship creates a compelling business insight that's quotable and counterintuitive.

2:32 - 3:0533sBusiness Mechanics

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I think there are probably a couple of questions that we get from LPs that are, you know, good questions, and we've been thoughtful about that in our test and learn as we formed, Fund One. So the first question that was, you know, made us think was, do you need a reserve strategy?

5:37 - 16s · Practical Framework

More from this episode

The Full Ratchet

Business Mechanics

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.

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.

5:58 - 6:5557s

The Full Ratchet

Practical Framework

I think there are probably a couple of questions that we get from LPs that are, you know, good questions, and we've been thoughtful about that in our test and learn as we formed, Fund One. So the first question that was, you know, made us think was, do you need a reserve strategy?

Sets up a fundamental question every early-stage fund faces. The 'test and learn' approach and specific LP questioning creates a practical framework for fund construction decisions.

5:37 - 5:5416s

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