Paul Murphy

Liquidity or exit planning is often taboo leading to many companies being ill prepared. Successful outcomes are years in the making - they start and end with proactive prep (e.g. getting your house in order, developing strong relationships with strategic partners, potential investors and advisors). With Scott Colvin & Paul Perrett we lay out some key actions you should embed now that can set you up for exit success and also make you a better run business today Big thanks to Bree Fedele 🖋

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In addition to building our own VC practice at AAF Management Ltd., we’ve invested in 37 VCs since 2017. Here is what, I believe, it takes to build a multi-vintage, early-stage, venture franchise: 𝟭- 𝗦𝗵𝗼𝘄 𝗙𝗼𝗰𝘂𝘀: hyper-focused GPs build longevity and consistency in their businesses. If you pitch LPs saying you will invest in early stage consumer but end up doing late stage consumer that’s a massive red flag. Stay germane to your mandate and strategy. 𝟮- 𝗔𝗿𝘁𝗶𝗰𝘂𝗹𝗮𝘁𝗲 𝗮 𝗨𝗻𝗶𝗾𝘂𝗲 𝗩𝗮𝗹𝘂𝗲 𝗣𝗿𝗼𝗽𝗼𝘀𝗶𝘁𝗶𝗼𝗻: the market is crowded with venture firms, articulate your differentiated value proposition to LPs and founders. Don’t try to be everything to everyone. Focus on 1-2 value propositions to your stakeholders and execute them with excellence and defensibility. 𝟯- 𝗚𝗲𝘁 𝗕𝗲𝘁𝘁𝗲𝗿 𝗮𝘁 𝗦𝘁𝗼𝗿𝘆-𝗧𝗲𝗹𝗹𝗶𝗻𝗴: we tell stories everyday. Raising capital for a fund and building your venture firm requires that same story-telling skillset. Tell consistent narratives to the market to help build your own brand as well as your firm’s brand. 𝟰- 𝗟𝗲𝘃𝗲𝗿𝗮𝗴𝗲 𝘆𝗼𝘂𝗿 𝗦𝘂𝗯𝗷𝗲𝗰𝘁-𝗠𝗮𝘁𝘁𝗲𝗿 𝗘𝘅𝗽𝗲𝗿𝘁𝗶𝘀𝗲: if you possess subject-matter expertise in a certain vertical, domain or industry, you already own a defensible moat. Accentuate that to your advantage when building your firm, raising capital from LPs and winning deals from founders. 𝟱- 𝗠𝗮𝗶𝗻𝘁𝗮𝗶𝗻 𝗮 𝗖𝗼𝗹𝗹𝗮𝗯𝗼𝗿𝗮𝘁𝗶𝘃𝗲 𝗡𝗮𝘁𝘂𝗿𝗲: early stage venture is a highly collaborate asset class. Keep your ego at the door, you will never be able to do everything it takes to build a firm alone. Leverage LPs, partners and founders for deal flow sourcing, diligence and overall industry best practices. 𝟲- 𝗙𝗶𝗻𝗱 𝘆𝗼𝘂𝗿 𝗣𝗿𝗼𝗱𝘂𝗰𝘁-𝗠𝗮𝗿𝗸𝗲𝘁-𝗙𝗶𝘁: in quintessential startup vernacular, ideally find your product-market-fit by the time you launch your second fund. You need product-market-fit before you scale your AUM, grow your team and carry more fiduciary responsibility. 𝟳- 𝗞𝗲𝗲𝗽 𝘆𝗼𝘂𝗿 𝗣𝗮𝘁𝗶𝗲𝗻𝗰𝗲: early stage VC investing is a marathon. Patience will reward you personally, professionally and financially. Build mental, physical and psychological stamina to endure the inherent ebbs and flows of your entrepreneurial journey. 𝟴- 𝗧𝗵𝗶𝗻𝗸 𝗟𝗼𝗻𝗴-𝗧𝗲𝗿𝗺: early stage VC investing is the archetypal long-term financial asset. Think in 10 year increments for your firm’s grand vision, think in 4 years for a given fund’s investment period and think in quarters when reporting material updates on your portfolio to your LPs. 𝟵- 𝗛𝗮𝘃𝗲 𝗙𝘂𝗻: if instant gratification, short feedback loops and a constant need for reaffirmation is what you are looking for in a career then early stage VC investing will not fulfill you. Have fun building, and as Naval Ravikant once said: "𝙗𝙚 𝙖𝙣 𝙤𝙥𝙩𝙢𝙞𝙨𝙩𝙞𝙘 𝙘𝙤𝙣𝙩𝙧𝙖𝙧𝙞𝙖𝙣." Finally, and most importantly, be authentic and true to yourself. #firmbuilding #entrepreneurs #VC

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What do you do when a radical new technology puts your main product right in the crosshairs of disruption? Listen to David Okuniev — co-founder of Typeform | Ask awesomely — discuss the challenges of innovation within existing structures. David shared a game-changing insight: Radical innovation is really, really difficult to do inside your own product. He emphasized the need to break free from the constraints of familiarity and embrace change from outside the box. Henrik Werdelin and I have both seen our fair share of this in our respective careers. What struck us most was how David leveraged structure to overcome the innovator’s dilemma. By creating a culture of experimentation and providing space for bold ideas, he propelled Typeform beyond incremental improvements. What other hacks have you seen or employed to help your organization overcome the innovator’s dilemma? Share your stories below! 👇 And if you want to dive deeper into our conversation, click the link in the comments to catch the full podcast episode!

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