Should a venture firm stick to its stated thesis and fund mandate, or make exceptions for exceptional opportunities?

Nikhil Basu Trivedi · Sep 6, 2023

Exceptional companies deserve exceptions — if you truly believe something is an outlier you should try to invest, regardless of rules like waiting a year after joining a firm

The entire job is finding and investing in outliers, so any rule that blocks an outlier bet is wrong

Scope: requires believing in your bones that it's an outlier

33:08 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi

Beezer Clarkson · Oct 18, 2023

Exceptions to an investment mandate should be made for exceptional people

She passed on Initialized Fund I because at sub-$10M seed it fell outside their $75-200M Series A scope, and it still sticks with her

Scope: quoting Nikhil from Footwork and adopting the line

39:33 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

Eric Vishria · Sep 25, 2024

A firm should occasionally throw out its own investing norms when an extraordinary company or opportunity is in front of it.

The 2010-2011 vintage — Instagram, Snapchat, Uber, and a rule-breaking late-stage Twitter round at ~$200m pre — produced tremendous returns; the only question worth asking is whether extraordinary companies are being built, and if so you just have to do it.

Scope: reserved for rare cases

37:00 20VC: Benchmark's Eric Vishria on Where is the Value in AI: Chips, Models or Apps | Why Nvidia Will Not Be The Only Game in Town | The Commoditisation of Foundation Models | Which AI Apps Have Sustaining Value vs Hype and Short Term Revenue

Mamoon Hamid · Oct 21, 2024

A fund should deliberately reserve a portion of its capital for off-strategy, rule-breaking bets driven by extreme conviction in a founder

He adopted the maxim that 20% of the strategy should be to not be on strategy, implemented as a 'YOLO bucket'

Scope: roughly 20% of strategy

10:07 20VC: Kleiner Perkins' Mamoon Hamid on Investing Lessons from Leading Rounds in Figma, Slack and Rippling | Lessons Building a Generational Defining Firm with Kleiner Perkins | AI: Where Value Accrues, Startups vs Incumbents & Scaling Laws

Everett Randle · Nov 10, 2025

Access to the very best companies is the only real currency in venture, and if principles or strategy ever start to obstruct that access, the strategy must be reevaluated.

Being involved with the best founders building the best companies is the currency by which everyone in the asset class lives, so nothing should be allowed to wag the dog.

78:37 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 · Nov 21, 2025

An off-strategy deal is worth doing if it meets any of three tests: a likely 10x-plus return, brand halo from co-investing with the best firms, or new network access

If you'll make 10x you should just do the deal; brand association with top firms helps a firm being built, and proximity to great founders brings future deal flow

Scope: applies to deals that don't fit the 10% ownership target

38:28 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

Lucas Swisher · Feb 23, 2026

A flexible mandate is an advantage, because it lets a firm concentrate on whichever segment of the market offers the best trades rather than being obliged to do a Series B this year

If the trend toward large enduring private platform companies persists, the best investments will be in that segment, and only a flexible mandate lets you go there

10:11 20VC: Inside Coatue's $70BN Machine: Why Price Matters Least | Why Mega Markets are the Most Important | How to Assess Durability of Revenue and Margins in AI with Lucas Swisher

Miles Clements · Mar 9, 2026 · hedged

Accel missed Rippling partly because they stuck to their ownership thresholds and investment framework in a fast-moving market — a case where breaking the rules would have been worthwhile

The entry was at a high valuation and would have required breaking many rules; reputation concerns about Parker also made them a step slow

Scope: doesn't regret not breaking rules in general; doesn't remember the specifics

22:28 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

Matt Murphy · Jul 27, 2026

A partnership rigid about which vehicle a deal 'fits' would have missed Anthropic entirely; partnership flexibility is what made the investment possible

The deal fit neither the venture fund's average check size nor the growth vehicle's stage, so only partners willing to override the mandate could do it

6:36 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

A firm should occasionally make an out-of-thesis bet where a zero is likely but the upside is extraordinary

Anthropic didn't fit what Menlo normally does, but the founder quality and market size meant that if it worked it would be wildly successful — that's the upside you only get by putting yourself in those companies

Scope: 'every once in a while', not a repeatable strategy

40:58 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

Cem Sertoglu · Nov 20, 2024

They were wrong to sit out UiPath's $3BN Sequoia round, and their post-IPO block trades were a mistake because they were playing in a market they were not naturally suited for

In hindsight the block-trade divestment felt like operating outside their competence

Scope: stated in hindsight

49:23 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

Miles Clements · Mar 9, 2026

Public markets are not good or bad, just a different asset class; venture firms should stick to what they're good at rather than pretending to be stock pickers

He accepts he will never be best in the world at understanding public stocks, whereas they are good at early-stage technology investing

48:06 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

Jason Lemkin · Jan 4, 2024

Staying in your lane is hard for investors because of ego and the need for a larger sense of purpose

Ego and id push firms to expand beyond what maximises returns

23:24 Ego and need for purpose drive firms to expand beyond their lane

Mitchell Green · Mar 28, 2025

The best advice for an emerging fund manager is to do exactly what you told your LPs you would do and never stray from it

70:20 Never stray from what you told lps you would do

Lucas Swisher · Feb 23, 2026

A flexible, stage-agnostic mandate is an advantage because it lets you invest whenever you see the best risk-adjusted opportunity rather than being confined to one round type

Being able to move up and down the stage spectrum like a rowboat means you can act opportunistically instead of forcing capital into a fixed stage

15:38 Stage agnostic flexibility beats a fixed stage lane

Miles Clements · Mar 9, 2026

Breaking your investment rules is something you should do very rarely; 'Series A' now spans multiple subcategories and it's fine to opt out of the ones you don't want

The vocabulary around what a Series A is has changed so much that you must choose which subcategory to participate in, and you don't have to be in every round

23:34 Break rules only rarely and opt out of the subcategories you dont want

Harry Stebbings · Aug 26, 2024

Firms should stay focused on their core activity rather than expanding into adjacent strategies

Agrees with Imran's competence argument; cites it as the reason his own firm deliberately avoids doing many things

59:39 Stick to core competency rather than expand into adjacent strategies

Nico Wittenborn · May 22, 2023

Investment frameworks should be held rigidly precisely so that breaking them is a meaningful litmus test of genuine conviction.

His Revolut reinvestment at Point Nine broke his focus area, his highest valuation and his lowest ownership norms, and it was a great decision; rigidity is what makes the exception informative.

32:01 Hold frameworks rigidly so breaking them signals genuine conviction

Harry Stebbings · May 22, 2023

The hard part of investing frameworks is retaining enough elasticity to break them without the exception becoming the norm.

32:41 Retaining elasticity to break frameworks without exceptions becoming the norm is the hard part

Mitchell Green · Mar 7, 2026

More growth and private equity funds should have mandates allowing them to buy public stocks, especially in companies they know well whose shares have sold off

If you were an early investor in a company you love and the stock is down 60%, buying it back is an obvious trade

49:40 Mandate should allow buying public stocks you know well

Marc Andreessen · Mar 30, 2026

Public equity and credit are the two products a16z would most like to add, but there are real problems with running either inside a venture firm

There are good reasons to do both, but structural issues specific to housing them in a venture firm have meant no catalyst moment to pull the trigger

39:25 Want public equity and credit but vc housing is the blocker