How much ownership concentration should venture investors optimize for?

Jason Lemkin · May 6, 2022

The argument that ownership no longer matters because markets are so much bigger works on a spreadsheet but not in practice; double-digit ownership positions are what actually move the needle in a fund

Over his eight-year investing history, all of his core needle-moving positions are double-digit ownership where he was the largest investor; owning 20% of a unicorn still works

Scope: concedes small stakes in outliers like Uber or Datadog made some individuals rich

6:02 20VC: Why the Traditional Seed Fund Model No Longer Works, Why Multi-Stage Funds Investing at Seed Bring Signaling Risk but also Less Pressure, The One Criteria All Potential Sales Hires Need to Have and The Clear Signs of 10x Sales Hires with Jason Lemki

Geoff Lewis · Oct 5, 2022

Capital concentration limits are the biggest enemy of venture returns — funds should concentrate capital in their highest-conviction companies to an extreme degree

Bedrock has done exactly this: ~20% of its first three funds is in Rippling, with similarly heavy concentration in Vercel and Flock Safety

40:30 20VC: The Rippling Memo: Bedrock's Geoff Lewis on The Conviction Building Process to Write a $200M Check and Co-Lead Rippling's Series D | Why No Competitor Can Out Execute Rippling | Uncapped SAFE's Why You Should Never Do Them and Why Geoff Broke The Ru

Brad Gerstner · Oct 10, 2022

An investor should put maximum dollars behind their best ideas rather than adding incremental dollars to their tenth or fifteenth best idea.

If you can generate alpha and have real conviction in a company, there's no reason to fund a worse idea when you can add to the best one; you have to live with the result.

Scope: conditional on being in a position — intellectually, network, conversion — to generate alpha; requires re-underwriting at every phase and staying open to being wrong

35:49 20VC: Altimeter's Brad Gerstner on Why Supercycles and the Powerlaw is the Most Important Thing In Investing, Why Portfolio Diversification is the Opposite of Risk Mitigation and The #1 Question Brad Asks All New Recruits

Harry Stebbings · Jan 4, 2024

Founders Fund is a good bet among large funds because of its unparalleled willingness to concentrate capital on a per-company basis and its historically epic returns

They are unparalleled in willingness to concentrate capital per company, so even with more losses they capture the same upside a smaller fund would

9:52 20VC: Predictions for 2024: What Happens to Early Stage VC Funding, Do a Load of Venture Funds Die, What do LPs Do in 2024, Does Figma Kill the M&A Market, Will IPOs Comeback & What Does a Trump Administration do for Startups with Jason Lemkin @ SaaStr

Jason Lemkin · May 27, 2024

Ownership percentage drives returns more than being early: owning a tenth of a percent won't move a fund, whereas owning ~20% of a company can produce a material return even from a modest ($300M) exit

Being multiple times the largest investor in a smaller $300M exit still produced a material return, whereas VCs brag about being early while owning trivial stakes

4:44 20VC: Why Seed is Systemically Broken | Why Pricing is Worse Than Ever and There is More Funding Than Ever | Benchmarks for Churn, Retention and Growth Rates - Good vs Great | Why Last Vintage for Private Equity Will Suck with Jason Lemkin

Kevin Hartz · Jul 22, 2024

Conviction-driven, heavily concentrated venture investing is the superior model; a fund should be defined by a few enormous power law winners rather than a mushy bit of everything

Founders Fund practises this as an emanation of the power law — e.g. selling Spotify at $8B and rolling the proceeds into Airbnb at $2.5B; looking back, funds boil down to the SpaceX fund, the Facebook fund, the Airbnb fund

46:21 20VC: How I Lost Airbnb at Seed Because of an Exploding Term Sheet | Investing Lessons from Roelof Botha & Peter Thiel | Why VC is Less Collaborative Than Ever and Great Companies Are Being Destroyed by Too Much Cash with Kevin Hartz @ A*

Harry Stebbings · Jun 30, 2025

The enemy of great venture returns is capital concentration limits

Great outcomes require enormous conviction positions, as with a 33% fund position in Airbnb

39:19 20VC: Inside KKR's Monster $8BN European Fund | The $500M Turkey Gamble That Went Wrong | Do Andreessen & General Catalyst Scare KKR? | Will AI Kill the PE Model? | Can The PE Model Survive without IPOs and Where is the Liquidity with Philip Freise

Martin Mignot · Aug 11, 2025

The most powerful thing a venture firm can do is get into category leaders early enough to hold meaningful ownership and earn the founder's trust as the reference investor.

Because returns concentrate in a tiny number of category leaders, position and ownership in those names is what drives fund performance.

38:59 20VC: Figma, Scale, Wiz: Inside Index's Decacorn Factory | Decision-Making, Investment Process, Biggest Lessons, Biggest Misses | Why Gross Margin is a Fallacy at Seed | Never Turn Down a Deal on Price with Martin Mignot, Partner @ Index Ventures

Harry Stebbings · Sep 22, 2025

Capital concentration limits are the enemy of great venture returns, which justifies putting as much as 30% of a fund into a single company

58:31 20VC: General Catalyst CEO Hemant Taneja on The Future of Venture Capital: Chanel vs Walmart | Lessons Scaling GC to $40BN in AUM | Investing $5BN+ Into Stripe Over 14 Rounds | Investing Hundreds of Millions into Anthropic at $60BN Valuation

Hemant Taneja · Sep 22, 2025

Concentration is key to being great at investing

58:40 20VC: General Catalyst CEO Hemant Taneja on The Future of Venture Capital: Chanel vs Walmart | Lessons Scaling GC to $40BN in AUM | Investing $5BN+ Into Stripe Over 14 Rounds | Investing Hundreds of Millions into Anthropic at $60BN Valuation

Kevin Ryan · Apr 10, 2024

Ownership percentage should not be a focus for a VC; paying a high price is justified when the team and opportunity are exceptional

Sometimes you're paying a big price because it's an incredible team and an incredible opportunity

Scope: applies when team and opportunity are exceptional

0:00 20VC: Are the Best CEOs the Best Fundraisers, Are the Best Founders Insiders or Outsiders to a Problem, Why Ownership Should Not Be a Focus in VC & The Biggest Lessons Scaling MongoDB to $26BN Market Cap with Kevin Ryan, Founder @ AlleyCorp

Kevin Ryan · Apr 10, 2024

Ownership percentage should not be a factor in early-stage investment decisions; a better team and market simply makes a company worth more, and paying up for less of it isn't a worse investment.

Like insisting on owning 10% of an apartment with a fixed budget, an ownership target just guarantees you never buy a really good asset; the only real question is whether the company is going to work.

Scope: applies to companies only six months old / earliest stage

35:57 20VC: Are the Best CEOs the Best Fundraisers, Are the Best Founders Insiders or Outsiders to a Problem, Why Ownership Should Not Be a Focus in VC & The Biggest Lessons Scaling MongoDB to $26BN Market Cap with Kevin Ryan, Founder @ AlleyCorp

Dan Siroker · May 15, 2024

Investor ownership minimums are not real constraints for a company that is doing well — top firms like Benchmark will invest below their supposed minimums for the right company

Standard, investor-favored fundraising terms are lore built on the average company; founders rarely see the counterexamples, and you can call your shots if you're performing

Scope: only if the company is doing well — 'you can't call your shots if you're not doing well'

29:46 20VC: Fundraising Wisdom that is Total BS; Dilution, Meeting Associates, Taking the Highest Price, Always Be Raising | Why Second Time Founders Are More Investable & Why Not To Hire People Out of College with Dan Siroker, CEO @ Limitless

Harry Stebbings · Nov 20, 2024

Passing on an exceptional company because the available ownership is too small is a mistake — a 2% position in a great company would have been great.

He passed on ElevenLabs because 2% ownership felt insufficient and now regrets it.

Scope: stated in hindsight about a specific deal

18:46 20VC: Turning $16.5M into $2.1BN; Lessons from the Greatest Venture Investment in European History: UiPath | Why VC is Not Being Commoditised | Why Price Does Not Matter | Lessons on Loss Ratio, Selling and Signalling with Cem Sertoglu

Max Altman · Nov 21, 2025

It is better to own 3% of an amazing founder's company than 15% of a company that will be worth zero, so quality of founder should mostly override price and ownership targets

Two or three percent of the next DoorDash or Airbnb puts the fund in great shape, whereas large ownership in a zero doesn't help

Scope: they still run a portfolio construction model and like to own 10%; 'mostly' — not fully price-insensitive

18:01 20VC: Max Altman on The New Seed War: Can Anyone Compete with Sequoia and a16z | Leaving $2BN on the Table with Reddit | Lessons from Backing Rippling at $25M Post | Why Climate Tech is a Mirage and Disaster

Harry Stebbings · Nov 21, 2025

Being tied to ownership targets is a mistake; a small check with low ownership in an exceptional company is worth doing

He passed on ElevenLabs at a $25M valuation because a $200-250k check would only be 1% ownership, and that deal would have returned the fund many times over

37:24 20VC: Max Altman on The New Seed War: Can Anyone Compete with Sequoia and a16z | Leaving $2BN on the Table with Reddit | Lessons from Backing Rippling at $25M Post | Why Climate Tech is a Mirage and Disaster

Oren Zeev · Feb 2, 2026

An investor should have no fixed rules on ownership or instrument — the right move depends entirely on the circumstance

He deviated from his own norms (uncapped safe, 5% instead of his usual ownership) on Decart and is glad he did

Scope: illustrated by a single ongoing case

51:16 20VC: 50% of Funds Will Go Out of Business | Why Growth Expectations Today are BS and Will Not Last | Why Oren Zeev Takes $0 Management Fees But 30% Carry | Why GPs Should Not Tell LPs Their Strategy

Harry Stebbings · Jul 27, 2026

Refusing small ownership positions is the single biggest investing mistake — passing on 1% stakes in companies like ElevenLabs and Star Cloud would have returned the fund many times over

In hindsight every one of those passed-on 1% positions would have returned huge amounts of money

Scope: stated as his own biggest mistake

45:20 20VC: Leading Anthropic's First Ever Round | Will Open Source Threaten Anthropic's Business | Do Margins Matter in a World of AI | Why Triple, Triple, Double, Double is Not Good Enough Today | Why Series A is Hard Today with Matt Murphy @ Menlo

Harry Stebbings · Aug 8, 2026

Passing on companies purely for insufficient ownership was his firm's biggest mistake and has cost hundreds of millions in lost returns

He turned down Deel, ElevenLabs, Granola, Star Cloud and Fractile because he could only have gotten 1-2% ownership

Scope: about his own fund's decisions

27:53 20VC: The AI Boom Will Create Enormous Roadkill: Who Wins & Loses | Why Founders Should Never Take Multi-Stage Money at Seed | Why Triple, Triple, Double, Double is Good Enough

David Frankel · Aug 8, 2026

Ownership percentage should never be the reason to pass on a company you believe in

All things equal he'd prefer more ownership, but when you meet the right founders and you're all in, you take what you can get

Scope: all else equal he would prefer to own more upfront

28:19 20VC: The AI Boom Will Create Enormous Roadkill: Who Wins & Loses | Why Founders Should Never Take Multi-Stage Money at Seed | Why Triple, Triple, Double, Double is Good Enough

Harry Stebbings · Aug 8, 2022

You should be in everything with low ownership because the outperformance of the few huge winners is so large that it dominates fund returns

Out of a thousand investments, the five biggest winners (Stripe, Notion, Miro, OpenAI) produce outcomes so large they swamp ownership concerns

27:28 20VC: Investing Lessons from Fred Wilson and Why Small Funds Outperform Large Funds | Why the Secret to Winning in Venture is Splitting Deals |Learnings From the Biggest Hits and Biggest Losses | Why Anyone That Always Does Their Pro-Rata is Wrong with Mo

Kevin Hartz · Jul 22, 2024

The era where traditional funds required 30%+ ownership to be actively involved is long gone, and it is better to hold small ownership in an extraordinary founder than high ownership in a company that goes nowhere

Scope: his fund still targets double-digit ownership with exceptions

23:23 20VC: How I Lost Airbnb at Seed Because of an Exploding Term Sheet | Investing Lessons from Roelof Botha & Peter Thiel | Why VC is Less Collaborative Than Ever and Great Companies Are Being Destroyed by Too Much Cash with Kevin Hartz @ A*

Byron Deeter · Aug 25, 2025

It is worth being a small owner of a very large company — sub-20% ownership positions violate historical venture standards but are the right trade in this cycle.

Companies like Anthropic, Perplexity and Canva will raise billions more, so even nine-figure investments leave you well below traditional ownership targets; it's a different venture game.

9:04 20VC: Do Margins Matter in AI? | Is Defensibility Gone For Good? | Is Vertical SaaS Dead in a World of AI | What SaaS Rules Are BS and No Longer Apply in a World of AI | The Future of Venture: Why Chanel vs Walmart is BS with Byron Deeter

Everett Randle · Nov 10, 2025

Fixed ownership targets like 20% are an input people mistake for Benchmark's objective; the real north stars are being the founder's highest-ROI partner and delivering the highest money-on-money returns in an LP's venture portfolio

Outcomes in today's technology landscape are far larger than ten or fifteen years ago, so there are many more bites at $100B or trillion-dollar companies and therefore many routes to being meaningful and generating exceptional returns without a fixed ownership percentage

38:47 20VC: Benchmark's Newest General Partner Ev Randle on Why Margins Matter Less in AI | Why Mega Funds Will Not Produce Good Returns | OpenAI vs Anthropic: What Happens and Who Wins Coding | Investing Lessons from Peter Thiel and Mamoon Hamid

Matt Murphy · Jul 27, 2026

Ownership percentage matters far less than it used to; you're better off owning a very small percent of the big outliers than a large percent of a company exiting for $300-500M

Venture is now an outlier business where only the biggest outcomes drive returns, and the flood of capital makes maintaining ownership hard anyway

Scope: high ownership is still magical if you can get it

9:19 20VC: Leading Anthropic's First Ever Round | Will Open Source Threaten Anthropic's Business | Do Margins Matter in a World of AI | Why Triple, Triple, Double, Double is Not Good Enough Today | Why Series A is Hard Today with Matt Murphy @ Menlo

Matt Murphy · Jul 27, 2026

The high-ownership discipline he was trained in for most of his career had to be unlearned

45:38 20VC: Leading Anthropic's First Ever Round | Will Open Source Threaten Anthropic's Business | Do Margins Matter in a World of AI | Why Triple, Triple, Double, Double is Not Good Enough Today | Why Series A is Hard Today with Matt Murphy @ Menlo

Harry Stebbings · Aug 24, 2026

Expanding outcome sizes let investors collaborate more with other firms, since you no longer need the ~20% ownership required when upside was capped around a billion dollars

When upside was capped around a billion dollars you needed large ownership; with bigger outcomes smaller stakes still matter

Scope: framed as his own experience of collaborating with other funds

13:59 20VC: Inside Sequoia's Investment Committee: Lessons from Don Valentine, Doug Leone and Alfred Lin | How the SpaceX and Citadel Deals Went Down | What Sequoia Specifically Looks for in Founders with Julien Bek

Sahil Bloom · Feb 25, 2022

Writing small checks is an access advantage for a debut fund, because the founder's trade — tiny dilution for real value delivered — is easy to say yes to at $100-200K and much harder at $500K or $1M

At small allocations the dilution cost to the founder is trivial relative to the value a platform/megaphone can deliver, so getting into the best deals is not hard

Scope: conditional on the investor being able to demonstrate real value; specific to an initial/small fund

10:09 20VC Exclusive: Sahil Bloom on Raising his Debut Venture Fund (SRB Ventures), Why Traditional Venture Firms Are Going to Lose and How Sahil Built a Twitter Audience to 500K+ in 18 Months

Hunter Walk · Jan 30, 2023

Writing small non-lead checks has increased rather than harmed their access, because large multistage funds are now eager to bring them in early when it only costs 1% of the company rather than 10–15%

Multistage leads get their help and stewardship without having to give up a large ownership slice, so they were offered more allocation than they took in 10 of 11 investments last year

Scope: specific to investors with existing relationships and credibility

23:16 20VC: Homebrew's Hunter Walk and Satya Patel on Why $100M is Not Enough To Execute a Seed Strategy Today | Why They Decided not to Raise New External Funds | Where Are We in the Cycle & What is Truly F***** | Why Founders Should Take Secondaries Earlier

Immad Akhund · May 12, 2025

Winning deals is easy with a small non-lead check strategy — he can get $150k allocated even after a round is fully done with a hotshot lead

Small non-lead checks don't compete for the round, so allocation is available after the fact

Scope: true of his current strategy and market conditions

42:21 20VC Exclusive: Mercury Founder Launches First $26M Fund | Why Founders Should Take the Highest Price | Why Serial Entrepreneurs are Better | Why AI Is So Overhyped | The Future of Venture Capital with Immad Akhund

Max Altman · Nov 21, 2025

Writing small 'brand' checks into the best companies is the right way to invest, despite managers who think it isn't pure

Founders don't distinguish between a $25k and a $1M seed check — they only see that you backed the best companies — and it puts you around the right people, with multibillion-dollar CEOs you text weekly

39:14 20VC: Max Altman on The New Seed War: Can Anyone Compete with Sequoia and a16z | Leaving $2BN on the Table with Reddit | Lessons from Backing Rippling at $25M Post | Why Climate Tech is a Mirage and Disaster

Oren Zeev · Feb 2, 2026

Small-check investors who bring real value can genuinely get into hot deals, whereas investors who must lead and exclude everyone else often could not have won them

If you write a small check and add value, there is little reason for founders to keep you out

61:35 20VC: 50% of Funds Will Go Out of Business | Why Growth Expectations Today are BS and Will Not Last | Why Oren Zeev Takes $0 Management Fees But 30% Carry | Why GPs Should Not Tell LPs Their Strategy

Tomasz Tunguz · Apr 21, 2023

Meaningful ownership matters for a concentrated fund, but you do not need significant ownership at entry — you can build the position over time

A small portfolio means significant time spent per company, and ownership drives the form of returns

Scope: Specific to a concentrated portfolio model

22:21 20VC: Who Wins in AI; Startup vs Incumbent, Infrastructure vs Application Layer, Bundled vs Unbundled Providers | From 150 LP Meetings to Closing $230M for Fund I; The Fundraising Process, What Worked, What Didn't and Lessons Learned with Tomasz Tunguz

Hemant Taneja · Sep 22, 2025

When you believe a company will compound for a long time, you should keep investing in every round rather than stopping at your entry position — this is the main justification for having a large capital base

Being part of iconic companies and supporting them with the full platform through every round is where the returns come from; Stripe has been invested in 14 times over 15 years, and Anduril in every round since seed

Scope: applies to companies judged to be long-term compounders; if missed at seed, catch them as early as possible instead

10:57 20VC: General Catalyst CEO Hemant Taneja on The Future of Venture Capital: Chanel vs Walmart | Lessons Scaling GC to $40BN in AUM | Investing $5BN+ Into Stripe Over 14 Rounds | Investing Hundreds of Millions into Anthropic at $60BN Valuation

Hemant Taneja · Sep 22, 2025

In the very best companies you never get the ownership you want at entry because founders command a premium, so ownership must be built up over subsequent rounds

His largest overall position, Stripe, is still under 10% despite investing across many rounds

79:33 20VC: General Catalyst CEO Hemant Taneja on The Future of Venture Capital: Chanel vs Walmart | Lessons Scaling GC to $40BN in AUM | Investing $5BN+ Into Stripe Over 14 Rounds | Investing Hundreds of Millions into Anthropic at $60BN Valuation

Harry Stebbings · Jan 12, 2026

A fund with a16z's profile should take 10% at the A and accept a higher win rate rather than holding out for higher ownership

Unlike funds that can't follow on, a16z can lead the B, C and D and take its pro rata, so it can rebuild ownership later

Scope: specific to large funds with full follow-on capability

47:59 20VC: a16z's $15BN Fundraise with Alex Rampell | The Best Companies Have Hostages Not Customers | The Best Founders Materialise Capital, Customers and Labour | Mid-Sized Funds with Die and The Future of Venture Capital

Miles Clements · Mar 9, 2026

Today's market is the inverse of the 2000 venture market: instead of taking 30% at Series A and diluting to 20% at IPO, you must ladder up to ~20% ownership through tenders, growth rounds and IPO rounds — which requires being a multistage fund

You can only take what the market allows at the earliest investment, so ownership has to be accumulated on the way up rather than defended on the way down

31:25 20VC: Inside Accel's $4BN Growth Investing Machine | Cursor is Dead is Total BS: Here is Why | What Missing Rippling and ElevenLabs Taught Us | Are $2BN-$10BN IPOs Dead | Why Now is a Great Time to be Thoma Bravo with Miles Clements

Sam Lessin · Aug 11, 2023

The worst outcome for a venture investor is not being wrong but being right and not making money — having an epic outcome in the portfolio that only returns the fund once

Epic outcomes are rare and hard to find, so failing to monetize one when you have it is the true worst case

23:13 20VC Roundtable: NEW FORMAT: Why the Seed Investing Model is Broken, How to Make Money at Seed Moving Forward; Who Wins and Who Loses, Why Venture Value Add Platforms are BS and Failed and Why There Will be an IPO per Week in H2 2024

Danny Rimer · Jun 17, 2024

Spending a year buying more of a known winner rather than hunting new investments can be the better use of an investor's time

DST spent a full year scooping up Facebook secondary while Index spent it on new companies; that was a brilliant understanding of where to double down on value, and by comparison Index had wasted a year

Scope: in the specific case of a pre-IPO Facebook

46:32 20VC: Index's Danny Rimer on Investing Lessons from Hits like Figma, Discord and Etsy to Missing Snapchat, Airbnb, Facebook & Spotify | Why Valuation is a Trap and Market Sizing, Signalling and Sector/Geo-Specific Funds are all Noise

Mike Maples · Jan 6, 2025

Following on in too many rounds in companies that weren't going to make the difference was his biggest mistake in Floodgate's early funds

Scope: specific to the early funds

35:04 20VC: How To Do a 10x Seed Fund in 2025 | Three Frameworks to Evaluate Startups an Founders | Lessons from Losing Billions Missing Airbnb and Pinterest & Investing Lessons from Charlie Munger with Mike Maples @ Floodgate

Byron Deeter · Aug 25, 2025

Investors' instinct to let someone else mark up their winners instead of re-underwriting and buying more is a mental trap that firms should build explicit process to counter

Once you're sitting on a 10x it feels intimidating to reset at a high price and have to earn a return again, so Bessemer adds a fresh partner and a dedicated team to re-underwrite and test whether another 10x is ahead

44:33 20VC: Do Margins Matter in AI? | Is Defensibility Gone For Good? | Is Vertical SaaS Dead in a World of AI | What SaaS Rules Are BS and No Longer Apply in a World of AI | The Future of Venture: Why Chanel vs Walmart is BS with Byron Deeter

Hemant Taneja · Sep 22, 2025

Failing to double down on your winners is the costliest venture mistake; if you are in the best companies you should be buying into them repeatedly

He has invested in Stripe 14 times; an investor who made a billion on a decacorn gave up a second billion by not doubling down

Scope: requires courage, conviction and a view on how markets will change

56:46 20VC: General Catalyst CEO Hemant Taneja on The Future of Venture Capital: Chanel vs Walmart | Lessons Scaling GC to $40BN in AUM | Investing $5BN+ Into Stripe Over 14 Rounds | Investing Hundreds of Millions into Anthropic at $60BN Valuation

Harry Stebbings · Feb 8, 2021

Investors today are increasingly pushing out reserves and putting more capital into initial checks

9:36 20VC: Aleph's Michael Eisenberg on Why Generalists Over Specialists, Why Boutique Smaller Firms Over Multi-Stage Firms, Portfolio Construction Theory, Capital Concentration Limits and How To Think Through Reserve Allocations with Market Cycles in Mind?

Mike Maples · Sep 20, 2023

Rising seed entry prices force seed funds either to raise 5x more capital or do a fifth as many deals, and either way materially ratchet up their risk

At 20-30 post versus 5.5 post, holding ownership constant requires 3-5x the check; seed funds need enough shots on goal for skill to produce outlier results, and a fifth as many deals means far worse odds of getting more than one outlier, while a 5x bigger fund means a 5x bigger hurdle

Scope: illustrated with the Lyft seed math

32:06 20VC Roundtable: Is the VC Model Broken? The Biggest Disconnect Ever Between TVPI & DPI, Why Market Size is Dangerous, Why "Go Fast" is Terrible Advice, The Dangers of Raising Large Rounds at High Prices & Why Next Year Will See the Biggest Hiring Spree i

Harry Stebbings · Nov 21, 2025

A $2-2.5M entry ticket is no longer enough at seed if you want 10%+ ownership, because seed rounds are now $5M and up

Round sizes have risen so the same check buys less ownership

36:24 20VC: Max Altman on The New Seed War: Can Anyone Compete with Sequoia and a16z | Leaving $2BN on the Table with Reddit | Lessons from Backing Rippling at $25M Post | Why Climate Tech is a Mirage and Disaster

Max Altman · Nov 21, 2025

A $2-2.5M entry check is no longer enough to build a meaningful seed position, though it was sufficient eighteen months ago when deals priced at $20-25M post

Entry valuations have moved up; he wasn't seeing $50-60M seed valuations even last year

Scope: true of the present market, not of 18 months ago

36:36 20VC: Max Altman on The New Seed War: Can Anyone Compete with Sequoia and a16z | Leaving $2BN on the Table with Reddit | Lessons from Backing Rippling at $25M Post | Why Climate Tech is a Mirage and Disaster

Harry Stebbings · Jul 22, 2024 · hedged

Being known for accepting small non-lead checks is a competitive liability because rival investors will use it against you with founders

Competitors can say the investor is amazing but will take a smaller check, undercutting the case to give them the lead

Scope: framed as an unresolved internal debate at his firm

23:57 20VC: How I Lost Airbnb at Seed Because of an Exploding Term Sheet | Investing Lessons from Roelof Botha & Peter Thiel | Why VC is Less Collaborative Than Ever and Great Companies Are Being Destroyed by Too Much Cash with Kevin Hartz @ A*

Harry Stebbings · Nov 10, 2025

If you'd ever be willing to take a smaller allocation in a deal, you shouldn't do the deal at all — willingness to give away ownership is a bad signal about your conviction

16:20 20VC: Benchmark's Newest General Partner Ev Randle on Why Margins Matter Less in AI | Why Mega Funds Will Not Produce Good Returns | OpenAI vs Anthropic: What Happens and Who Wins Coding | Investing Lessons from Peter Thiel and Mamoon Hamid

Harry Stebbings · Jan 19, 2026

If you're willing to take less ownership than you asked for in a deal, you shouldn't do the deal at all

Josh Kirchner's advice on specific investments

59:02 20VC: How Model Performance is Plateauing | Two Key Rules for Effective Deal-Making | Company Building Lessons from Keith Rabois, Brian Halligan and Pat Grady | Why Enterprise AI Adoption is Years Off with Harvey CEO Winston Weinberg

Winston Weinberg · Jan 19, 2026

If an investor is willing to accept less ownership than they asked for, the company won't turn out to be a legendary category-defining company

Willingness to settle reveals the investor's own lack of conviction in the outcome

59:17 20VC: How Model Performance is Plateauing | Two Key Rules for Effective Deal-Making | Company Building Lessons from Keith Rabois, Brian Halligan and Pat Grady | Why Enterprise AI Adoption is Years Off with Harvey CEO Winston Weinberg

Cem Sertoglu · Nov 20, 2024

Late follow-on checks into a company that is no longer overlooked are momentum-riding rather than reserve deployment, and past a certain valuation the prudent move is to stop adding and begin realizing gains for LPs

Once the win was that large, prudent investor responsibility to LPs is to start realizing some of the gains rather than keep underwriting risk

Scope: they did participate at $1BN but sat out the $3BN Sequoia round and began divesting at $7BN

43:49 20VC: Turning $16.5M into $2.1BN; Lessons from the Greatest Venture Investment in European History: UiPath | Why VC is Not Being Commoditised | Why Price Does Not Matter | Lessons on Loss Ratio, Selling and Signalling with Cem Sertoglu

Harry Stebbings · Nov 20, 2024

The industry has wrongly taught a generation of investors to always lean in; the best investors actually lean out strategically over time

He cites having a huge amount of data on this

44:43 20VC: Turning $16.5M into $2.1BN; Lessons from the Greatest Venture Investment in European History: UiPath | Why VC is Not Being Commoditised | Why Price Does Not Matter | Lessons on Loss Ratio, Selling and Signalling with Cem Sertoglu

Hemant Taneja · Sep 22, 2025

Investors should keep buying into their best companies for decades, but at some point stop and redeploy attention to the next generation of entrepreneurs rather than trying to make all their money on one winner

Beyond a certain point the further upside becomes extraordinary to underwrite, and alpha can still be generated with new founders

Scope: acknowledges firms concentrating on SpaceX still have a good investment and runway

79:58 20VC: General Catalyst CEO Hemant Taneja on The Future of Venture Capital: Chanel vs Walmart | Lessons Scaling GC to $40BN in AUM | Investing $5BN+ Into Stripe Over 14 Rounds | Investing Hundreds of Millions into Anthropic at $60BN Valuation

Jason Lemkin · Aug 11, 2023

Seed investors need double-digit ownership to make money, so the thing most worth changing about venture is the lack of concentrated rounds.

He has to pass on too many deals where he can't get 10% and doesn't believe returns are achievable below that.

50:01 20VC Roundtable: NEW FORMAT: Why the Seed Investing Model is Broken, How to Make Money at Seed Moving Forward; Who Wins and Who Loses, Why Venture Value Add Platforms are BS and Failed and Why There Will be an IPO per Week in H2 2024

Mark Goldberg · Oct 25, 2024

Given a choice, an investor should break check size before breaking ownership targets

You have to be in the winners, so when you believe a company is a winner it's worth paying up on check size to be part of it

Scope: applies when the firm has conviction the company is a winner

46:41 20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry

Martin Casado · Jul 28, 2025

Investors should walk away over ownership, not price, because fund mechanics don't work without sufficient ownership

At early stage you must size the median outcome so it returns a fifth to half the fund, which requires ownership

Scope: for early stage; less true for very large obvious markets and large checks, which is growth territory

48:27 20VC: a16z's Martin Casado on Anthropic vs OpenAI: Where Value Accrues | Cursor vs Replit vs Lovable: Who Wins and Who Loses | The One Sin in AI Investing | Why Open Source is a National Security Risk with China

Frank Rotman · Aug 26, 2021

Ownership targets exist because of a real constraint: an actively engaged partner can only manage a limited number of investments, so venture capital as a product has hard limits

Venture capital is a product combining capital, time, hands-on help, brand and network; the time component caps how many companies a partner can serve, which is why funds need meaningful ownership per deal

Scope: applies to active, hands-on investors

35:08 20VC: Has Price Discipline Disappeared? Is it Possible to Build Ownership Over Time? Why Venture Is Less Collaborative Now Than Ever? How fast Do Breakout Companies Become Obvious? How To Construct an Optimised and Repeatable Investment Decision-Making Pr

Harry Stebbings · May 13, 2024

Rounds that sell only 10% cannot support a real investor partnership, because after angels the lead ends up with roughly 6% and will not be meaningfully engaged

A great investor needs enough ownership to genuinely partner with the company, and angels take part of the allocation too

32:42 20VC: Behind the Scenes at Y Combinator: The Interview Process | What the Best & Worst Do in the Program | Do the Best All Raise Pre-Demo Day & YC's Fundraising Advice to Startups | Why the Value is in Application Layer AI with Tom Blomfield

Julien Bek · Aug 24, 2026

Ownership concentration still matters, because an investor can only be a true co-founder-level partner to a handful of companies in a career

He partners with two or three founders a year and works as a de facto co-founder — closing first customers and top hires — which is impossible across a large portfolio; the binding constraint is his time, not capital

Scope: describes his personal investing style rather than a firm-wide mandate

14:17 20VC: Inside Sequoia's Investment Committee: Lessons from Don Valentine, Doug Leone and Alfred Lin | How the SpaceX and Citadel Deals Went Down | What Sequoia Specifically Looks for in Founders with Julien Bek

Harry Stebbings · Oct 14, 2024

Writing a small check into a category-defining winner is both a financially good decision and valuable brand-building, because being the first-round investor in a company like Suno wins you the next generation of such companies.

There is huge social validity and brand ramification from being associated with incredible category-defining winners.

7:18 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective

Harry Stebbings · Oct 25, 2024

New managers should be willing to do brand-name deals with tiny ownership stakes, contrary to conventional advice

The most important thing is being aligned with incredible founders and companies, especially in the current AI era

Scope: acknowledges everyone will advise the opposite

47:50 20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry

Mark Goldberg · Oct 25, 2024

There are positive externalities to being in the winners, and a new firm should be willing to compromise on terms or ownership to get into brand deals

Establishing the firm's credibility justifies the compromise

Scope: other LPs in the same fundraise argued exactly the opposite

48:11 20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry

Klaus Hommels · Nov 27, 2024

Investors need meaningful ownership so that being right actually changes the fund's outcome — spraying tiny checks across many companies is a mistake

Some crypto funds invest tiny sums in very many companies so it never makes a difference if they're right; and since he acts as an outsourced business development resource with a limited number of hours, his compensation has to be commensurate with the founder's

Scope: crypto funds cited as the negative example

48:27 20VC: Why Price Sensitivity is BS | Why "Portfolios" are Merely a Construct to Make LPs Happy | Why the Best Investment Never Happen in "Fundraising Rounds" | What Europe Needs to do to Become a Superpower Again | Klaus Hommels, Lakestar

Mike Maples · Jan 6, 2025

He is unlikely to write a very small check even into a potential 100-bagger; the investment has to be able to move the needle on the fund, with roughly $500,000 as his floor

A check that can't move the needle on the fund isn't worth making

Scope: floor of ~$500k

17:47 20VC: How To Do a 10x Seed Fund in 2025 | Three Frameworks to Evaluate Startups an Founders | Lessons from Losing Billions Missing Airbnb and Pinterest & Investing Lessons from Charlie Munger with Mike Maples @ Floodgate

Sarah Guo · Apr 28, 2023 · hedged

Investing in a company raising $100-200M at a billion-dollar valuation out of the gate is structurally wrong for her fund because it is hard to imagine it making an impact on fund returns.

The check size relative to entry valuation cannot move the needle for a small early-stage fund.

Scope: specific to her $100M early-stage fund

15:02 20VC: In AI Who Wins? Startups or Incumbents? What Happens to Wealth Inequality? Why Will $10BN+ Companies Only Have 10 People | Why Defensibility in Startups is BS & Speed is Everything? Why Large Groups Worsen Decision-Making with Sarah Guo

Harry Stebbings · Oct 18, 2023

At today's entry prices, a small check with tiny ownership means even a $10B outcome doesn't move a fund's returns

A $100k check at a $20M pre-money is 0.5% on entry and around 0.25% by exit after dilution

Scope: a $50B exit would be different

25:46 20VC: Are LPs Open For Business? What Does it Take to Raise a Fund Today? How Has What LPs Want to See in Fund Investments Changed? Why Do LP Incentive Mechanisms Need to Change? Which Funds Will be Hit Hardest with Beezer Clarkson @ Sapphire Partners

Mark Goldberg · Oct 25, 2024

A fund should not put more than about 10% of the fund into a single company

Scope: can't recall the exact legal concentration limit

46:55 20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry

Philipp Freise · Jun 30, 2025

A single investment should never exceed roughly 10% of a fund (15% as an absolute underwriting maximum), and very high concentration like 33% in one company is the wrong approach in private equity

Scope: specific to his industry (large-scale private equity), not venture

39:08 20VC: Inside KKR's Monster $8BN European Fund | The $500M Turkey Gamble That Went Wrong | Do Andreessen & General Catalyst Scare KKR? | Will AI Kill the PE Model? | Can The PE Model Survive without IPOs and Where is the Liquidity with Philip Freise

Alex Rampell · Jan 12, 2026

The right venture posture is to buy any percentage of something that is absolutely working, or high ownership of something that could work

0:00 20VC: a16z's $15BN Fundraise with Alex Rampell | The Best Companies Have Hostages Not Customers | The Best Founders Materialise Capital, Customers and Labour | Mid-Sized Funds with Die and The Future of Venture Capital

Alex Rampell · Jan 12, 2026

There are only two deals worth doing: any percentage of something that is absolutely working, or high ownership of something that could work

High ownership has to correspond to the level of risk being taken; when a company is unambiguously the market winner you can throw away the ownership rules, but when it isn't working yet you need ownership to compensate

Scope: 'absolutely working' must clear a very high bar

49:56 20VC: a16z's $15BN Fundraise with Alex Rampell | The Best Companies Have Hostages Not Customers | The Best Founders Materialise Capital, Customers and Labour | Mid-Sized Funds with Die and The Future of Venture Capital

Reid Hoffman · Dec 7, 2020

Ownership does matter, but the 20% venture canon should not be applied blindly — it should be applied within an analysis of the probability of success and how big the outcome could get

The 20% target came from studies of average exits and IPOs needed to make a fund work, but that is imperfect science and changes over time

35:15 20VC: Reid Hoffman on Investing in Airbnb and Passing on Stripe, The Different Styles of Truly Great Leaders, How To Think Through Ownership and Price in Venture & How To Ensure Venture Partnerships Always Have Trust and a Learning Mindset

Rob Go · Jun 23, 2023

Venture is far too one-size-fits-all and the industry isn't thinking creatively enough about who gets to be an investor, which companies can raise venture, and what economic structures are possible.

Despite many managers and funds, approaches are strikingly similar; historical dogmas like the 20% ownership rule show how rules get treated as fixed, and Union Square was criticized simply for being willing to own 15%.

50:01 20VC: How to Raise a Venture Fund from Deck to First Meetings to Final Close, Why Venture is a Young Person's Game and Why Multi-Stage Funds Have Not Ruined Seed with Rob Go, Co-Founder @ Nextview

Harry Stebbings · Jul 22, 2024

The enemy of great venture returns is per-company capital concentration limits; you should be 30% of the fund into your big winner

Founders Fund did exactly this on Airbnb and Bitcoin

47:15 20VC: How I Lost Airbnb at Seed Because of an Exploding Term Sheet | Investing Lessons from Roelof Botha & Peter Thiel | Why VC is Less Collaborative Than Ever and Great Companies Are Being Destroyed by Too Much Cash with Kevin Hartz @ A*

Harry Stebbings · Oct 25, 2024

Per-company capital concentration limits are the enemy of great venture returns

Founders Fund has put as much as 30% of a fund into one company

47:05 20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry

Frank Rotman · Aug 26, 2021

It has become very difficult to buy up ownership over time; the initial check now largely sets your final ownership unless you are an extreme value-added investor

There is so much capital and so many new funds that founders can go back to market for price discovery and bring in additive new investors, rather than taking more from insiders

Scope: exception for investors whose founders and co-investors actively support them buying up

30:55 20VC: Has Price Discipline Disappeared? Is it Possible to Build Ownership Over Time? Why Venture Is Less Collaborative Now Than Ever? How fast Do Breakout Companies Become Obvious? How To Construct an Optimised and Repeatable Investment Decision-Making Pr

Mike Mignano · Jul 6, 2026

Ownership matters at seed and Series A but matters much less at Series B and beyond, where investing should be underwritten as a cash-on-cash multiple rather than a percentage

Winners raise a lot of capital very fast at high valuations, so ownership is almost impossible for a small fund to buy later — you have to get it early; once a company is an identifiable market leader, the question is just what multiple the capital can return

Scope: framed from the perspective of a small fund

42:06 20VC: Why Now is the Time for the Application Layer | Why OpenAI & Anthropic Won't Win the App Layer | Why Startups Should be TokenMaxxing | Why VCs Should Reduce Weighting on Price & Ownership in an Age of AI with Mike Mignano, USV

Mark Suster · May 1, 2024

Reserving capital for companies that nobody else wants to fund is one of the highest-return uses of reserves

Some of their best returns came from companies others wouldn't fund that were doing something fundamental and just took longer — on average six years to a growth round — and those companies are more capital efficient by definition; six such deals returned $1.4 billion

43:39 20VC: Mark Suster on The Biggest Fundraising Lessons for VCs, Why the Correction in Venture is Still to Come, Why Private Equity Will Replace IPOs and M&A as the Exit Path & The Woke Left and a Trump Administration; What Happens?

Cem Sertoglu · Nov 20, 2024

Reserves exist to fund companies the market misunderstands or overlooks because they don't fit an existing mold

A $150M fund can only put ~$15M into one company, and building a global software company costs more than that; UiPath looked too off the beaten path for London or New York growth funds, so they had to be prepared to bridge it themselves

Scope: framed around the UiPath bridge, where ~40 firms passed

39:44 20VC: Turning $16.5M into $2.1BN; Lessons from the Greatest Venture Investment in European History: UiPath | Why VC is Not Being Commoditised | Why Price Does Not Matter | Lessons on Loss Ratio, Selling and Signalling with Cem Sertoglu

Bucky Moore · May 5, 2025

A small early check can work as a wedge into a founder relationship, but the check itself buys no access — only committed legwork with a selected subset of those companies does

Countless later-stage or non-lead firms made low-conviction early investments expecting access and it did not serve them; with 100 such positions you must have the taste to know which few to invest real time in

Scope: applies to later-stage firms buying early exposure

44:38 20VC Exclusive: Why Mega Platforms Will Win in VC | Why You Cannot Do VC If You Do Not Do Pre-Seed | Why Market Sizing is BS | Where Will Foundation Models Build/Buy Apps vs Where Will They Not with Bucky Moore

Matt Murphy · Jul 27, 2026

Small starter or tracker checks are strategically valuable: a wedge into a company makes you roughly 10x more likely to participate significantly in or lead the next round

Being on the cap table gives proprietary deal flow, a relationship with the entrepreneur, and the ability to pounce once something is clearly working

45:56 20VC: Leading Anthropic's First Ever Round | Will Open Source Threaten Anthropic's Business | Do Margins Matter in a World of AI | Why Triple, Triple, Double, Double is Not Good Enough Today | Why Series A is Hard Today with Matt Murphy @ Menlo

Harry Stebbings · May 22, 2023

Some investors will not do a deal for less than 20% ownership

26:30 20VC: Why Your Fund Model Should Not Rely on $10BN+ Outcomes, Why the Large Funds Got Too Large, The Rise of Solo GP's; The Pros and Cons & Is Consumer Subscription Even a Good Sector to Invest in with Nico Wittenborn @ Adjacent

Saam Motamedi · Jul 15, 2024

Investors should be more ownership sensitive than price sensitive within a range, targeting 20-25%+ ownership on core early-stage positions

With a large fund what matters is how many positions you have with adequate ownership; they are willing to give founders more capital early without proof because they have belief in them

Scope: less religious about the ownership target than they once were; applies to a $1B fund, not a small fund

29:01 20VC: Why We Are in a Bubble & Now is Frothier Than 2021 | Why $1M ARR is a BS Milestone for Series A | Why Seed Pricing is Rational & Large Seed Rounds Have Less Risk | Why Many AI Apps Have BS Revenue & Are Not Sustainable with Saam Motamedi @ Greylock

Danny Rimer · Jun 17, 2024

The Snap miss was a failure of courage rather than a failure of conviction — they saw clearly how brilliant Evan Spiegel was but wouldn't put over 10% of the fund into one company

Evan had exceptional clarity on what Snap was and wasn't and how he was building it, so the judgment on the founder was right; only the willingness to concentrate was missing

Scope: to his recollection

44:03 20VC: Index's Danny Rimer on Investing Lessons from Hits like Figma, Discord and Etsy to Missing Snapchat, Airbnb, Facebook & Spotify | Why Valuation is a Trap and Market Sizing, Signalling and Sector/Geo-Specific Funds are all Noise

Mark Goldberg · Oct 25, 2024

Putting 30% of a fund into one company is not something he could personally live with, even though it is incredible if the company turns out right

That level of concentration would make it hard to sleep at night; with an Airbnb-type outcome it obviously works out, but perspective matters

Scope: concedes it is 'incredible' if it is the right company; personal risk tolerance rather than universal rule

47:17 20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry

Harry Stebbings · Aug 8, 2022

An investor should accept a drastically cut allocation rather than walk away out of ego, because the job is to make as much money for LPs as possible

He nearly refused a cut from $500k to $150k out of anger, but still loved the company and thought it would make money — that $150k has now returned 2x the fund

Scope: conditional on still believing in the company

35:53 20VC: Investing Lessons from Fred Wilson and Why Small Funds Outperform Large Funds | Why the Secret to Winning in Venture is Splitting Deals |Learnings From the Biggest Hits and Biggest Losses | Why Anyone That Always Does Their Pro-Rata is Wrong with Mo

David Frankel · Oct 14, 2024

The rule that you should never accept a smaller allocation than you wanted is a good test in a vacuum but ignores context — taking less is fine when the heat is for the right reasons and it lets you bring in collaborators smarter and more experienced than you

There are investors you genuinely want alongside you, and throttling down your own check to get them in is worth it

Scope: only when the heat is for the right reasons; only for collaborators you actively want in the deal

58:15 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective

Mo Koyfman · Aug 8, 2022

If your fund size is constrained to a couple hundred million, owning 10-12% of a company is enough — you don't need 20% — and you shouldn't be super greedy

Given the level of outcomes now seen, 10% of a company returns enough for a small fund, and bringing in other extremely talented investors as co-owners has real value

Scope: conditional on fund size under roughly $250M

28:02 20VC: Investing Lessons from Fred Wilson and Why Small Funds Outperform Large Funds | Why the Secret to Winning in Venture is Splitting Deals |Learnings From the Biggest Hits and Biggest Losses | Why Anyone That Always Does Their Pro-Rata is Wrong with Mo

Martin Mignot · Aug 11, 2025

Ownership expectations have shifted: the old 20% minimum bar is now much harder to achieve, and the right target is double-digit ownership at exit

Looking at fund performance, most of Index's returns came from companies where they owned close to or more than double-digit ownership at exit

33:47 20VC: Figma, Scale, Wiz: Inside Index's Decacorn Factory | Decision-Making, Investment Process, Biggest Lessons, Biggest Misses | Why Gross Margin is a Fallacy at Seed | Never Turn Down a Deal on Price with Martin Mignot, Partner @ Index Ventures

Hussein Kanji · Jan 20, 2025

Seed funds should get extra capital into winners via handshake super-pro-rata agreements or a safe on top of the first check, rather than in ways that visibly cherry-pick the best companies or squeeze downstream investors.

You don't want to screw up the downstream investors who have to write the next check, or be seen cherry picking your best companies.

17:47 Handshake super pro rata or added safes let seed funds grow ownership without squeezing downstream investors

Hussein Kanji · Jan 20, 2025 · hedged

A one-to-one ratio of initial capital to reserves is the right rule of thumb for fund construction

It is the easiest mental model — just double the initial deployment

48:43 One to one initial to reserve ratio is the right fund construction rule

Satya Patel · Jan 30, 2023

Investing without a fund means every investment no longer has to be capable of returning the fund — it only has to be a good return — which lets them fit into a cap table however the round's construct allows

Fund math forces ownership and sizing discipline on every deal; personal capital removes that constraint

25:02 Personal capital investing removes return the fund math letting deals fit any cap table allocation

Semil Shah · Nov 21, 2022

Targeting 5-10% ownership, promising to earn the right to maintain it, never owning more than the founder and letting the founder vote your shares is a non-threatening way to approach entrepreneurs

It frames the investor as non-threatening to the founder

17:22 Targeting modest 5 10 percent ownership and never outvoting the founder is a non threatening approach

Semil Shah · Nov 21, 2022

Pushing for target ownership forces a trade-off in company quality versus simply getting into the best rounds

Fund four was the first time he went for ownership and it produced a concentration of selection errors

19:53 Pursuing ownership targets trades off company quality for round access

Ophelia Brown · Mar 17, 2023

Asking founders for 20% ownership gets easier as a fund accumulates proof points of how it supports companies

Demonstrated value reduces founder pushback on ownership

27:16 Demonstrated value add track record eases negotiating high ownership targets

Ophelia Brown · Mar 17, 2023

Starting a Series A with 15% ownership will not leave you with 10% at exit — dilution from Series A to exit is far more than five points

Surviving that many subsequent rounds and option pool top-ups with only 5% total dilution would be extraordinary

28:07 Dilution from series a to exit typically exceeds five percentage points so plan ownership targets accordingly

Sahil Bloom · Feb 25, 2022

An investor with a large content platform can support 50 portfolio companies without being overwhelmed, because only a handful take up the full range of promotional help and the rest only need amplification at big announcement moments

In practice few companies ask for everything; most engagement clusters around funding or feature announcements, so the time cost stays manageable

11:10 Platform leverage removes the partner time constraint

Harry Stebbings · Apr 10, 2024

Dilution is a serious risk: investments in companies that turn out amazing can still return only 3-4x because of how much capital went in.

He has had several such outcomes in his own portfolio.

36:34 Dilution can cap even winning investments to modest multiples

Kevin Ryan · Apr 10, 2024

Dilution, gross margins and capital intensity are inputs to what a company is worth rather than reasons to target ownership: capital-intensive businesses make worse investments, and a great founder in a big, capital-efficient market is worth paying more for.

These factors should be priced into the judgment of the opportunity, not managed via an ownership rule.

36:42 Capital intensity and margins should be priced into valuation not used as ownership rules

Ed Sim · Oct 27, 2023

Running an opportunity fund roughly the size of the core fund is the right answer to dilution, letting a seed firm maintain ownership and board seats through the Series B and beyond

Capital efficiency plus follow-on capacity lets you keep supporting the best founders and preserve ownership as they grow

22:53 Running an opportunity fund sized like the core fund preserves ownership and board seats through growth rounds

Ed Sim · Oct 27, 2023

LPs should favor being first on the cap table, since that is what makes money in any environment when multiples are compressed, and ownership will matter

With multiples compressed, entry position and ownership drive returns

41:00 Compressed multiples make early ownership position the primary return driver

Hemant Taneja · Sep 22, 2025

Cross-fund investing is legitimate and in fact unavoidable for truly great companies, provided you have first put enough capital to work in the original fund and cap single-company exposure at roughly 10-15% per fund

If you really believe in something it should become a major position in its own fund first, and multiple funds should get to benefit from a genuinely great company

57:59 Cross fund investing is legitimate if original fund is loaded first capped at 10 15 percent

Mike Maples · Jan 6, 2025

Harry should have written the small check into the company that became a $3B business, because on a ~$30M fund a 150x return on even a $250k check was worth taking

The discipline is 100-baggers on first checks 5% of the time, which requires picking opportunities big enough if they work while still caring about price

18:14 Check size should scale with fund size not absolute dollar floor

Philipp Freise · Jun 30, 2025

Backing your winners does not justify putting an entire fund into a single winner

38:58 Back winners but never with the entire fund in one position

Michael Eisenberg · Jun 19, 2024

Venture is a binary business, so you should not average into or out of positions the way you do in public markets — if you have conviction, take the whole position, and if you think you've hit a good return, take all the money off the table

Venture returns are driven by outliers and binary outcomes; the relevant test is whether you have an information advantage or unique insight, and if you do you should act on it with conviction

36:15 Binary conviction means full position in or full exit not gradual averaging

Harry Stebbings · Jun 19, 2024

The strategy of placing many small bets and then concentrating capital into the winners is a misnomer — you rarely get to buy more of your best companies

His best-performing companies almost always have Sequoia and other large funds all over them, who are not offering up pro rata

38:01 Doubling down on winners is rarely possible since big funds crowd out pro rata

Michael Eisenberg · Jun 19, 2024

Pro rata is best deployed into the middling companies in a portfolio, since winners become runaways where capital is unavailable and losers are undeserving, while occasionally an under-appreciated middle company becomes a giant winner with extra capital

Good companies get overrun with capital and bad ones don't merit it, so the marginal dollar matters most where others don't yet see what's happening

38:23 Pro rata best targets middling companies not clear winners or losers

Harry Stebbings · Jan 12, 2026 · hedged

A workable ownership heuristic is 10% at entry, 5% at exit after 50% dilution, and asking whether the company can reasonably be a $15BN outcome that returns the fund

That combination of ownership and outcome size returns the fund with comfort

49:31 Ten at entry five at exit against a fund returning outcome

Jude Gomila · Feb 11, 2020

Ownership becomes a more important consideration as an angel's portfolio grows, because time forces you to concentrate on fewer companies

Each additional investment carries an opportunity cost of the investor's time, so at some point the right strategy is fewer deals with larger checks and more ownership

29:02 Ownership concentration becomes more important as portfolio size grows due to time constraints

Kevin Hartz · Jul 22, 2024

Fund capital should only go in as lead or co-lead, with any smaller participation done as a personal check

24:15 Fund capital restricted to lead or co lead smaller checks done personally

Harry Stebbings · May 15, 2024

Dan's advice on offering only small ownership in a round is dangerous for most founders because it only works for exceptional operators

Dan scaled a business to $120M ARR and had a very efficient zero-to-one with Limitless; 99.9% of founders are not in that position and will misapply the advice by walking into raises offering 10% dilution

31:02 Small ownership allocations only work for exceptional operators and are dangerous advice for most founders

Jason Lemkin · Nov 30, 2022

At this stage of his career, a seed position below 10% ownership is hard to take seriously, and in each batch of investments he wants at least one company where he owns 20% or more.

As a solo GP seed investor, owning 20% of something worth a couple of billion is the only way to make enough money — that's what the game of venture is.

10:32 Solo gp seed investors need a double digit ownership floor with at least one 20 percent plus holding per batch

Jason Lemkin · May 6, 2022

Being the largest investor in a single generational company is enough to make a venture career, and that outcome outweighs everything else in a fund

Storm's large position in Talkdesk will be that fund's best investment in twenty five years if the company is worth $20-30B, more than outweighing all other holdings

35:32 Being the largest investor in a single generational outcome can define an entire career

Cem Sertoglu · Nov 20, 2024 · hedged

B-round joiner checks are not a strong performance driver for a seed fund, though they can carry their weight.

Their one Fund One joiner check will make money but won't drive fund performance; only a billion-dollar outcome would make it carry its weight.

18:59 B round joiner checks rarely drive fund performance unless outcome is massive

Harry Stebbings · Apr 3, 2024

A 2-on-20 YC-style round automatically excludes top venture firms, because the ~7.8% available to a lead isn't worth a top firm's time

With $2M on $20M, only about 1.6 is available for a lead, which is roughly 7.8% ownership

26:50 Tiny yc style rounds mathematically exclude top tier lead investors

Beezer Clarkson · Oct 18, 2023

You can achieve outperformance without meaningful ownership only on a small fund (roughly under $50M), where exits must be proportionally much larger relative to fund size; above ~$50M there is always a trade-off between ownership and AUM

They have yet to run the math on a fund over $50M that doesn't have to trade off ownership against AUM; smaller funds require a very high hit rate or disproportionately large exits

25:10 Outperformance without meaningful ownership is only achievable below roughly 50m fund size

Beezer Clarkson · Oct 18, 2023

Running the underwriting math on required exit sizes reveals how genuinely hard fund outperformance is

They underwrite a Series A fund to 3x and seed to 5x, back out what exit value is needed to return the fund given ownership and AUM, then ask how many such outcomes a manager will realistically get and compare to historical top-performing funds

26:02 Rigorous underwriting math reveals genuine difficulty of fund outperformance

Beezer Clarkson · Oct 18, 2023

Managers who raise large funds while taking only ~5% ownership are unlikely to return them, because the model requires both very large exits and an exceptional batting average

History argues that combination is very unlikely, even though she'd like it to work

33:33 5 percent ownership mega seed funds unlikely to return without exceptional batting average

Sumeet Gajri · Jan 17, 2020

LPs' preference for diversification is an artifact of the traditional venture model, where investors first meet companies at the point of fundraising and must decide without a prior relationship, so they spread risk across 20-30 investments per fund

Without the chance to build a relationship before writing the check, the only way to manage decision risk is to make many bets and later double down on apparent winners

19:20 Diversification preference is a historical artifact of meeting founders only at fundraising without prior relationship

Sumeet Gajri · Jan 17, 2020

When a company meets his investment criteria and he has high conviction, the right move is to buy as much as possible in the initial investment up to the fund's 20% concentration limit rather than deploying across multiple rounds

Given his fund model and conviction level, spreading the same capital over multiple rounds makes no sense; buying as early as possible maximises ownership

21:41 Buy maximum ownership at first check up to a fixed fund cap rather than spreading across rounds

Chris Paik · May 8, 2023

A concentrated portfolio of high-teens to low-twenties companies requires targeting high ownership — Pace targets 20%

For a concentrated model to work you need to own a lot of each company you invest in

11:27 Concentrated portfolio of fifteen to twenty companies requires high ownership targets

Geoff Lewis · Oct 5, 2022

Investors can't control macro shocks, but they can control underwriting of the micro opportunity — and a capital-concentration approach keeps losses small on the companies that fail

Bedrock has lost only a few million of hundreds of millions deployed because struggling companies are ones they sized small into, while they sized up over time into winners like Rippling

22:14 Size small on uncertain bets and scale into winners to control fund losses

Larry Aschebrook · Jun 16, 2025

The Gorillas investment and its sale to Getir were good decisions — a small group of shareholders they helped structure the deal for got good value and most of the preferred equity — but the $100M second tranche to restructure the equity was the real mistake; he should have walked away after the first check

Following on left ~$200M of risk in a business where he was 'a dead man walking' among giants, requiring years of board work, restructuring and battles with founders

59:52 Walking away after the first check beats doubling down to rescue a deteriorating deal

David Schneider · Sep 11, 2024

Ownership percentage is not the most important metric in growth investing; what matters is being in the right vehicles with enough dollars deployed to make it matter

44:08 Ownership percentage matters less than dollars deployed in the right vehicles at growth stage

Harry Stebbings · May 22, 2023

Venture is moving back to an era where investors demand 15-20% ownership rather than 10%

Outcomes are lower than in the boom, so ownership needs to be higher to make returns work

26:17 Ownership targets are rising back to 15 20 percent from 10 percent

Des Traynor · Jul 18, 2022

An angel like him should not fight for allocation, since founders reasonably treat small angels as a jigsaw piece filling a gap in the round

He knows what it's like on the other side of the table as an operator raising money

44:44 Small angels should not fight for allocation and accept being a gap filler in the round

Adam Besvinick · May 29, 2023

A pre-seed fund can work with as few as ~24 companies provided ownership per company is high enough that any one can return the fund

With ~4% average entry ownership, even 60-65% dilution leaves well above the 86bps needed for a $1B outcome to return an $8.5M fund

7:58 Small fund with high average ownership can work with very few portfolio companies

Adam Besvinick · May 29, 2023

A $300k-$500k check is not an awkward or unfriendly size at pre-seed; you can consistently get the allocation you want even when a traditional lead has already taken most of the round

In Fund I with $750k-$3.5M checks into ~$4M rounds he got the allocation he wanted in virtually every investment; it is on the investor to sell the founder on why they deserve the remaining allocation, and a relevant thematic portfolio plus founder references make that case

24:07 Modest checks can still secure desired allocation even after a lead has taken most of the round

Shardul Shah · Sep 16, 2024

Doubling down should be underwritten as a net-new investment case on whether the company can return the fund, redoing all the diligence, rather than as incrementally increasing ownership.

Because he has doubled down multiple times within a year, he rotates shadow partners for an objective view, redoes customer calls, competitive analysis and financial models.

20:52 Double down decisions require full fresh underwriting not incremental ownership math

Tomasz Tunguz · Apr 21, 2023 · hedged

Trying to buy 5% at each of the A, B and C is a tough configuration; it is better to take ~10% at seed, another 10-15% at the A, then ~5% at the B

The dollar amounts required to buy the same percentage escalate dramatically as valuations step up from 100 to 200-300M

22:54 Buying a fixed ownership percentage at every round becomes prohibitively expensive as valuations step up

David Frankel · Oct 14, 2024

His partners regard the token $100k check into an over-priced AI deal as utter insanity and stupidity.

7:11 Small checks into overpriced hype deals are value destructive

David Frankel · Oct 14, 2024

Seed funds shouldn't optimize for dilution — the right strategy is to dilute alongside the founder

Coming in very early gives alignment with the founder and they value time over ownership percentage; and if he's done his job and the next round is at 3-4x, he simply can't afford to maintain his percentage

68:45 Seed funds should dilute alongside founders not fight for ownership

Harry Stebbings · Oct 14, 2024

Maintaining ownership through follow-on investing is often not worthwhile because the opportunity cost of that capital is too high

The capital deployed to sustain a position could earn more elsewhere

69:24 Opportunity cost of follow on capital makes maintaining ownership not worthwhile

Martin Mignot · Aug 11, 2025

At seed, a multistage firm should be collaborative with seed funds and angels rather than maximizing ownership; the ownership push belongs at Series A/B.

Seed is conviction investing where they'd rather bring other seed investors along, whereas at A/B they spend board time and want to be the reference investor, which requires a minimum ownership.

34:21 Ownership maximization belongs at a b not seed where collaboration rules

Rob Go · Jun 23, 2023

The theoretically optimal portfolio construction is to invest in one company, put all your money into the first round, and be right — every deviation from that is a concession to uncertainty and risk

Taking the idea to its extreme clarifies that diversification is purely a response to uncertainty

26:28 Diversification is purely a concession to uncertainty the optimal portfolio is one investment