Joshua Berkowitz of Berkocorp on Why LP’s Should Care about IRR% not TVPI | E24
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Due Diligence
Evaluating emerging managers is a complex task that requires a keen understanding of both qualitative and quantitative factors. emphasizes the difficulty in assessing fund managers' success, especially when data from early funds is limited. He notes, "It's actually kind of hard...to understand what good looks like" 1. For emerging managers, the process resembles a hiring decision, where confidence in their strategy and track record is crucial 2. adds that maintaining relationships with both established and new GPs is essential for gathering diverse insights.
Strategy Fit
The concept of GP strategy fit is pivotal in venture capital, as it aligns a GP's unique strengths with their investment approach. Joshua highlights Kevin Carter's distinct strategy, which is deeply rooted in his extensive experience and network in Silicon Valley 3. "Most funds are like that," he explains, emphasizing the importance of leveraging unique skills to dominate a niche. concurs, noting that successful funds often win through differentiated approaches, avoiding direct competition with giants like Sequoia and Andreessen 4.