The New Power Law: An Exclusive Breakdown of Top VC Firm Returns

Following a viral tweet last year, we got our hands on an anonymized dataset from the SPI team over at Stepstone breaking down the portfolio returns and concentrations strategies of more than 150 top VC funds In 2015, @cdixon teamed up with Horsley Bridge to delve into the Babe Ruth Effect.

Fast forward to today, I've decided to turn the spotlight on an updated version of that data.

A FLOOD of startups are raising before the end of the year.

The top 10% will get it done fast, but HOW you run a process is key for the rest.

Every Primary portco creates an FAQ doc and they share it after the first meeting

Here's why + an outline that helped 1 co raise >$400M 𝗪𝗵𝘆?

It makes it easy for the VCs to write their memo and helps you control the narrative.

This is a real table of contents of a company that has raised hundred of millions.

You'll see how simple, yet powerful an FAQ doc can be:

Ideas are nothing without execution.

Growth is nothing without retention.

Here are the top strategies I've seen Founders use to lock consumers and SMBs in for the long run. Improve your onboarding

Oftentimes the lowest hanging fruit.

Time to value is critical.

Make sure users get to:
1. Experience the most valuable pieces of your product AND
2. They know HOW to get value out of it.

Venture Capital is F*cking hard.

With the risk free rate climbing and competition increasing it won't get any easier and a wash out is coming.

Here's some of the real math required to generate industry leading returns in this highly illiquid asset class. According to AngelList data, a venture-backed seed-stage startup has an estimated 1 in 40 shot—or 2.5% chance—of becoming a unicorn today.

That data is from 2021, so let's assume the real number is half of that - 1.25%

A couple of weeks ago @coatuemgmt brought together an exclusive group of Founders and Investors for their East meets West conference.

Their keynote presentation outlined their View on the State of the Markets

Here are some of the key slides & takeaways for Founders & Investors: @coatuemgmt The World has been much more resilient with:
Inflation subsiding
Record-low unemployment
A european energy crisis averted
End of China's zero-covid policy
Decisive founders focused on efficiency
The Dawn of a new Technology: With AI putting us in a better place

During the tech bull run, young investors were promoted faster than ever before.

Here’s 4 reasons why the back half of the year is about to be way worse than people anticipate because of us Millennials 🧵 🥶First cold streak = mental meltdown

It’s nearly impossible to be a VC who started working in the last 7 years who got promoted to Partner without having a unicorn under your belt.

What's going on with 🍄?

The WHO predicts that mental illness could cost the world economy a staggering $16T. Things have only gotten worse with COVID — prescriptions for anti-anxiety medicine soared 34% during the pandemic. With powerful tailwinds, the medicinal psychedelic market could eventually cross $100B according to a Canaccord Genuity report

1/ In 2013 people started to receive links over email to "find time" in someone's calendar vs. scheduling over email.

Calendly, the startup behind the links, raised $350 million at a $3 billion valuation led by OpenView a 2 weeks ago...

After only raising $550K!

How? 2/ Quick note. I can't stop thinking about the story behind Calendly, how it scaled and the VC "pattern recognition" alarms that should've been set off at the time if people decided to really dig into Tope's story, but everything is easier to spot in hindsight.

Let's dig in.

1/ The customer bank.

How did Starbucks get a $1.269B loan at a negative 10% interest rate from its customers?

Here's how:

👇👇👇 2/ Every day we wake up 64% of Americans drink at least one cup of coffee.

As a result, Starbucks goes through on average 8,070,428 cups per day.

But how do their customers pay for the coffee and sous vide egg bites?

1/ Want to nerd out on some data?

Earnest Research came out with some awesome data on holiday performance across retailers.

Let's dive in and see what we find.

👇👇👇 2/ Which companies did Santa treat well?

Amazon

Etsy

Chewy

Lululemon

Nike

All grew 20+% year over year utilizing e-commerce exceptionally well.

Nice to see Phil Knight's baby, Nike, on that list as the lone "incumbent." #ShoeDog

My Father sent me a picture of a Wolfpack this morning with the following description.

The first 3 are the old & sick, they walk in front to set the pace of the entire pack. The next 5 are the strongest & best, they are tasked to protect the front side if there is an attack. In the center are the rest of the pack members, always protected from any attack. Then the 5 also among the strongest are following, protecting the back side.