Vertices Capital

Vertices Capital
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Vertices Capital specializes as an "Outsourced Chief Investment Officer" (a.ka. OCIO) 100% dedicated to Venture Capital, partnering with boutique family offices, independent asset managers, and regulated banks. We help them understand the Venture Capital landscape, build bespoke investment strategies, and execute them with precision. verticescapital.substack.com

  1. 31. "The Price of Agreement" (ep. 6 of the series "101 VC Core Principles")

    MAR 29

    31. "The Price of Agreement" (ep. 6 of the series "101 VC Core Principles")

    Welcome to episode number six of our series called “One O One VENTURE CAPITAL CORE PRINCIPLES FOR NEW LPs, WILLING TO UNDERSTAND HOW VC REALLY WORKS”…Today we’re going to explore four new core principles:Number 21. Consensus investments often look that way because they are measurable and comparable to the past, leading to being priced to consensus as well.Number 22. The most important investment decision is the mid-funnel choice that determines which opportunities reach the final partner meeting ("Monday").Number 23. The biggest investment misses are often the opportunities that were never seriously considered enough to make it to the partner meeting.Number 24. To succeed in venture capital, an investor fundamentally needs courage.Let’s dig in…First, consensus investments often look that way because they are measurable and comparable to the past, leading to being priced to consensus as well.Consensus investments carry an inherent valuation handicap: the moment everyone agrees a company is great, that agreement is already embedded in the price, eliminating the asymmetric upside VCs need. The flood of "obvious" late-stage capital into Uber between 2014 and 2019, from SoftBank's $9 billion to Saudi Arabia's $3.5 billion, exemplified this dynamic, all consensus-driven cheques written at ballooning valuations that left almost no room for meaningful return multiples by the time of the 2019 IPO.Second, the most important investment decision is the mid-funnel choice that determines which opportunities reach the final partner meeting (”Monday”).The partner meeting only surfaces what survives the screening process upstream, which means the single partner deciding which opportunities deserve serious diligence shapes the fund's entire return profile before a single vote is cast. Sequoia's early investment in Dropbox in 2007 happened because someone inside the firm treated a Y Combinator demo-day demo as worth chasing despite the crowded "B2C file sharing" category, a mid-funnel judgment call that most other VCs on the same demo day dismissed and never escalated.Third, the biggest investment misses are often the opportunities that were never seriously considered enough to make it to the partner meeting.Firms rarely lose money on deals they debated and passed; they lose alpha on deals that never made it through the door at all. Bessemer Venture Partners publicly catalogs this in its celebrated "anti-portfolio": a pre-IPO secondary in Apple dismissed as "outrageously expensive," a pitch from the Google founders that never generated serious follow-up, and early access to Tesla that never converted into conviction, all crimes of omission, not commission.Finally, fourth, to succeed in venture capital, an investor fundamentally needs courage.Every structural insight in venture is worthless without the courage to act on it alone, at a price others consider absurd, and in full view of partners who disagree. Ben Horowitz has described a16z's founding thesis itself as an act of courage, launching a new VC firm in 2009 at the depths of the financial crisis, betting on founder-CEOs when the consensus was to replace them with "professional management," a contrarian posture that set the cultural DNA enabling future bold investments in Coinbase, GitHub, and Lyft. Stay tuned for our next episode, and meanwhile, you can reach out to us, Vertices Capital, on our website: vertices.vc. Thank you for listening. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit verticescapital.substack.com

    3 min
  2. 30. What pension funds could learn from Yale?

    MAR 19

    30. What pension funds could learn from Yale?

    What pension funds could learn from Yale? The core argument is structural, and not aspirational. Pension funds are not built like endowments: they carry liability schedules, coverage ratio obligations, and fiduciary constraints that make a copy-paste of the Yale model unrealistic. The adaptation requires fitting VC into existing architecture, such as aligning capital calls with payout timelines, ring-fencing illiquid sub-portfolios with their own governance logic, and using fixed income as a liquidity buffer rather than dead weight.The mechanics matter as much as the allocation decision itself. Managing illiquidity is less about avoiding it and more about sequencing it. Vintage diversification, funding-ratio-linked pacing, and secondary market access are not exotic tools, they are how pension funds can stay committed through full cycles without being forced to exit at the wrong moment. Deploying during downturns, when valuations reset and competition thins, is historically where the returns are made. The discipline to act counter-cyclically is what separates strategic VC allocators from reactive ones.Governance is where most pension funds will either succeed or stall. Dedicated internal teams, sector alignment with beneficiary demographics, and systematic performance reviews are not overhead, they are what makes a VC program durable across economic and innovation cycles. Without that infrastructure, even well-timed allocations tend to drift or get cut at the first sign of volatility.Read more in one of our last piece for IMD Business School as an academic VC researcher, https://www.imd.org/ibyimd/finance/what-pension-funds-could-learn-from-yale/. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit verticescapital.substack.com

    1 min
  3. 29. The "Architect’s Guide to First-Time VC Fund Raising"

    MAR 9

    29. The "Architect’s Guide to First-Time VC Fund Raising"

    We usually talk to new and emerging LPs in venture capital, but for this particular piece of research, we want to talk to new General Partners (GPs) raising their first venture capital fund, and suggest how they can implement several best practices to increase fundraising success, particularly through cold outreach. Raising a first-time venture capital fund is a monumental task, but implementing the right systems can shift your conversion rates from 1% to nearly 15%. Here is The Architect’s Guide to First-Time Fund Raising, and how new General Partners (GPs) in VC can improve their fundraising process. 1. Own your digital narrative Before you ever send an email, your online presence is already speaking for you. * Curate your footprint: Google yourself to see what a prospective Limited Partner (LP) sees; ensure it reflects authority and professionalism. * Plant “curiosity seeds”: Move beyond sharing event photos. Instead, share deep insights that establish you as a thought leader, building trust before the first Zoom call even begins. 2. Adopt a strategic mindset Fundraising is not a sales pitch; it is a series of “thoughtful conversations”. * Prioritize LP value: Shift the focus from what you need to what the investor finds interesting and valuable. * Depersonalize the “No”: Rejection is often just a matter of timing or asset fit, it is rarely a reflection of your personal capability. 3. Operationalize your pipeline Efficiency is the difference between a stalled fund and a closed one. * Leverage a CRM: Use dedicated tools to track every stage of the funnel, from “edit hold” to “scheduled”. * Measure your output: Track your metrics religiously. Knowing exactly how long it takes to generate 50 leads allows you to program your week with precision. * A/B Test your outreach: Use multi-channel testing across LinkedIn and email to find the subject lines that actually get opened. 4. Prioritize high-quality research Never “blaze through” a list of names. Treat every prospect as a unique individual. * Look for qualitative signals: Target former founders or tech executives active in the ecosystem. * The 60:30 rule: Spend at least 60 minutes researching a prospect (posts, podcasts, history) for every 30-minute meeting you book. * Lead with social proof: Mention mutual connections or existing LPs, with permission, to establish immediate credibility. 5. Refine your communication Experienced investors can spot a generic template from a mile away. * Skip the clichés: Avoid false flattery like “I loved your post” unless it’s authentic and saved for the actual conversation. * Be “direct and elegant”: Provide clear, concise data about your firm and portfolio so the prospect can make an easy, informed decision. * Don’t “pick brains”: Avoid asking for free labor or immediate deck reviews before a real relationship exists. 6. Master the 30-minute meeting The goal of the first meeting is rarely a check; it’s to “close for the next meeting”. * The 25-minute rule: Stop talking by the 25th minute to ensure there is ample time for Q&A. * Listen to understand: Instead of over-explaining your vision, ask questions to learn how they approach the VC asset class. * Offer a “buffet” of options: Position yourself as a potential investment, advisor, or client. This gives the LP “social permission” to find a fit that works for them. 7. Sequence for momentum * Build “fundraising muscle”: Start with your warm network to refine your pitch and gain initial traction. * Share the wins: Use valuation increases or portfolio growth metrics to build momentum with cold prospects. * Play the long game: A “not yet” is an invitation to nurture a relationship for Fund 2 or future referrals. Ultimately, raising Fund 1 is less about “selling” and more about building a system of trust. By professionalizing your digital footprint, operationalizing your outreach, and treating every LP interaction as a thoughtful conversation rather than a pitch, you can move beyond the standard 1% conversion rate and build the foundation for a multi-fund legacy. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit verticescapital.substack.com

    4 min
  4. 28. "The Partner Vote" (ep. 5 of the series "101 VC Core Principles")

    MAR 5

    28. "The Partner Vote" (ep. 5 of the series "101 VC Core Principles")

    Welcome to episode number five of our series called: “One O One VENTURE CAPITAL CORE PRINCIPLES FOR NEW LPs WILLING TO UNDERSTAND HOW VENTURE CAPITAL REALLY WORKS”. Today we’re going to explore four new core principles: Number 17. Strong “yes” or strong “no” positions are much better indicators than lukewarm consensus. Number 18. If a deal sees partners split, for example, three partners rate it a “nine” (high conviction) and three rate it a “one” (low conviction), the investment should probably be made. Number 19. The presence of conviction (the “nines”) is a far more powerful signal than the presence of dissent (the “ones”). Number 20. VCs must embrace volatility in their decision-making because the optimal outcome is rarely found in the middle ground where everyone agrees. Let’s dig in… First: Strong “yes” or strong “no” positions are much better indicators than lukewarm consensus. Andreessen Horowitz (a16z) explicitly avoids lukewarm consensus by passing on deals where every partner agrees, operating on the premise that universally accepted ideas have already lost their alpha. For example, a16z’s highly polarizing early investment in Coinbase in 2013 was driven by a strong “yes” from Chris Dixon, despite widespread market skepticism that associated cryptocurrency purely with illicit activities. Second: If a deal sees partners split, for example, three partners rate it a “nine” (high conviction) and three rate it a “one” (low conviction), the investment should probably be made. Top-tier partnerships like Benchmark operate on a “champion model” where a split room is viewed as a prerequisite for a breakout company rather than a reason to pass. When Bill Gurley sponsored Uber’s Series A at Benchmark, the partnership was not in unanimous agreement since many viewed the startup as merely a niche black-car service, but his “nine” rating pushed the deal through to a historic return. Third: The presence of conviction (the “nines”) is a far more powerful signal than the presence of dissent (the “ones”). Dissent usually identifies obvious downside risks, but venture returns are generated entirely by a single partner’s unwavering conviction in the non-obvious upside. When Jeremy Liew of Lightspeed Venture Partners invested $485,000 into Snapchat’s seed round, his deep conviction overrode significant dissent from critics who dismissed the product as a trivial disappearing photo app, ultimately generating a $2 billion return for the firm. Fourth: VCs must embrace volatility in their decision-making because the optimal outcome is rarely found in the middle ground where everyone agrees. The middle ground optimizes for safety and incremental growth, which mathematically guarantees mediocre fund performance in an asset class defined by power laws. Founders Fund embraced extreme volatility in 2008 by investing $20 million into SpaceX when the company was nearly bankrupt after three failed launches, a highly non-consensus bet that middle-ground investors entirely avoided, but which yielded one of the most valuable private companies in history.Stay tuned for our next episode, and meanwhile, you can reach out to us, Vertices Capital, on our website: vertices.vc. Thank you for listening. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit verticescapital.substack.com

    3 min
  5. 27. The architecture of micro VC entry sizes

    FEB 25

    27. The architecture of micro VC entry sizes

    GPs often talk to prospective LPs who have strong misconceptions about minimum ticket sizes to become an LP in VC funds. In venture capital, the assumption that LP commitments must start at €250k or higher often comes from how larger funds are structured. In micro pre‑seed funds, this logic shifts. A €10M vehicle typically runs on lean management fees, and low overhead. Within that structure, a €50k ticket can represent 0.5 to 1% of the fund, a meaningful share that integrates cleanly into the economics. Smaller minimums don’t imply less professionalism. They reflect the capital intensity of the strategy and the fund’s design choices. There is no operational reason a €50k LP can’t sit alongside larger investors if reporting, capital calls, and governance are standardized. For GPs, the trade‑off is administrative: more LP accounts to manage, but often stronger alignment and access to relevant networks. In short, the size of the ticket is a function of fund architecture, not of investor profile or sophistication. If you want to learn more about VC funds economics, contact us at Vertices Capital (vertices.vc). This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit verticescapital.substack.com

    1 min
  6. 26. "Ownership and Conviction" (ep. 4 of the series "101 VC Core Principles")

    FEB 15

    26. "Ownership and Conviction" (ep. 4 of the series "101 VC Core Principles")

    Welcome to episode number four of our series called “One O One VENTURE CAPITAL CORE PRINCIPLES FOR NEW LPs, WILLING TO UNDERSTAND HOW VC REALLY WORKS”… Today we’re going to explore four new core principles: Number 13: If a company runs, VCs must have strong ownership, a small investment of $1 million in a large fund is insufficient… Number 14: Internal data at VC firms shows that consensus versus non-consensus decisions does not matter at all… Number 15: The presence of conviction is the only factor that matters… Number 16: If every partner rates an investment a “six” (on a 0 to 10 scale), the investment should probably not be made because it is consensus without conviction. Let’s dig in… First: Ownership Must Be Meaningful.. When a company becomes a 100x outlier, a token-sized investment returns almost nothing to the fund as a whole, making meaningful ownership a prerequisite for LP impact. Founders Fund exemplified this by placing 33% of its third fund into Palantir and 20% of a $500 million fund into Airbnb, ultimately holding 12.7% of Palantir at IPO worth ~$1.4 billion and 5.5% of Airbnb worth ~$5.5 billion, stakes only possible because of concentrated, conviction-sized positions, not safe $1 million diversification checks.​.. Consensus vs. Non-Consensus Is Irrelevant.. Internal data from top VC firms consistently shows that whether a deal is consensus or non-consensus within a partnership has no predictive power over returns; the deciding variable lies elsewhere. Cambridge Associates research confirms this: the investments that generated the most exceptional returns were often those that initially struggled to attract investor interest, while Correlation Ventures found that non-consensus bets produce 3–5x higher returns than consensus deals, not because being contrarian is inherently virtuous, but because consensus deals are already priced to consensus.​.. Conviction Is the Only Factor.. What actually separates winning investments from mediocre ones is the depth of a single partner’s conviction, even when peers disagree. Peter Thiel’s $500,000 Facebook investment in 2004 as the company’s first outside backer, made when the product was dismissed as a college social network with no clear business model, turned into over $1 billion, not because the deal was consensus, but because Thiel had absolute conviction in Zuckerberg’s capacity to build an enduring platform.​. The “Six” Is a Trap.. A deal where every partner rates it a six is the most dangerous kind: it clears every internal threshold while belonging to no one, generating no single champion willing to fight for it under adversity. SoftBank’s Vision Fund demonstrated this at scale, dozens of investments made on broad market consensus and trend-chasing rather than deep partner conviction, producing catastrophic losses in WeWork ($47 billion valuation to bankruptcy), Oyo, and Katerra, precisely because the conviction required to stress-test assumptions had been replaced by collective comfort…Stay tuned for our next episode, and meanwhile, you can reach out to us, Vertices Capital, on our website: vertices.vc. Thank you for listening. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit verticescapital.substack.com

    3 min
  7. 25. "The Power Law Math" (ep. 3 of the series "101 VC Core Principles")

    FEB 3

    25. "The Power Law Math" (ep. 3 of the series "101 VC Core Principles")

    Welcome to episode three of our series called "One O One VC CORE PRINCIPLES FOR NEW LPs WILLING TO UNDERSTAND HOW VENTURE CAPITAL REALLY WORKS".Today we're going to explore four new core principles:Number 9. VCs aim explicitly for net multiple money returns…Number 10. In a typical fund of 25 to 40 investments, four to five investments should return 10x or more…Number 11. Historically, two to three of those 10x investments must result in a $100 million or a billion-dollar gain to yield a good fund…Number 12. Even the best-performing funds often have a high write-off rate (for example, 50%), meaning VCs must be comfortable with being wrong half the time.Let's dig in…First, Net Multiple Focus…VCs target net multiples, actual cash returned to LPs after fees and expenses, as the primary success metric, not IRR or TVPI, to ensure real economic value creation. Union Square Ventures' $20 million investment in Twitter in 2008 delivered a net multiple exceeding 100x through its 2013 IPO, generating hundreds of millions in distributions that more than repaid the fund despite high fees and a volatile timeline.​..Four to Five 10x Returns.In a standard 25 to 40 company fund, four to five investments must achieve 10x or higher returns to drive top-quartile performance amid inevitable losses. Lightspeed Venture Partners' early fund exemplified this with 10x+ exits from Snap, MuleSoft, and Nutanix among 30+ bets, where these few winners generated the bulk of value while the majority returned less or zero.​​..$100M+ Blockbuster Wins…To deliver a strong fund overall, historically two to three of those 10x investments need to produce $100 million or billion-dollar gains for the fund, creating outsized distributions. Accel's investment in Facebook delivered over $9 billion in gains from a $12.7 million stake, while Slack and Atlassian added another $100 million+ each, turning the fund into a multi-billion-dollar success story.​​..Embracing 50% Write-Offs…Top funds routinely write off 50% or more of investments, requiring VCs to normalize being wrong half the time without losing conviction on winners. Sequoia's legendary 2008 fund wrote off 50% of its portfolio to zero, yet Airbnb, Unity, and Dropbox generated returns exceeding 100x each, repaying the fund multiple times over.​​..Stay tuned for our next episode, and meanwhile, you can reach out to us, Vertices Capital, on our website: https://vertices.vc. Thank you for listening. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit verticescapital.substack.com

    3 min
  8. 24. "The Anatomy of a Venture Bet" (ep. 2 of the series "101 VC Core Principles")

    JAN 20

    24. "The Anatomy of a Venture Bet" (ep. 2 of the series "101 VC Core Principles")

    Welcome to episode two of our series called "One O One VENTURE CAPITAL CORE PRINCIPLES FOR NEW LPS WILLING TO UNDERSTAND HOW VC REALL Y WORKS".Today we're going to explore four new core principles:Number 5: Success as a VC requires active participation in the business of risk-taking..Number 6: The market size dictates how big a company can get.Number 7: The founder determines how big the company will get.And Number 8: When evaluating a market, VCs focus on its projected size in 10 or 20 years, asking the "why now" question rather than assessing what exists today.Let's dig in.Success in venture capital requires embracing risk as a core operational discipline, not merely accepting it as a byproduct of investing. Benchmark Capital epitomized this in 1997 by investing $6.7 million in eBay when the company had just $400,000 in monthly revenue and critics dismissed online auctions for "broken laser pointers" as too niche to scale, yet the bet returned over 600x and defined the firm's reputation.​​The total addressable market sets an absolute ceiling on company value, regardless of execution quality. When Uber launched in 2009, initial investors saw a $4 billion black-car market, but Benchmark partner Bill Gurley recognized that superior service could expand TAM to include car ownership replacement, a $150-750 billion opportunity, fundamentally reshaping the investment thesis and Uber's eventual valuation trajectory.​​Founders determine whether a company reaches its market ceiling or stalls far below it, making founder quality the decisive variable within any TAM. Brian Chesky transformed Airbnb from a home-rental platform into a $98 billion company by relentlessly expanding the vision to include experiences, services, and hotels across 220 countries, demonstrating how founder ambition unlocks successive phases of growth that less determined operators would never attempt.VCs evaluate a market's size 10 to 20 years ahead and ask "why now" to identify inflection points, ignoring current scale. Sequoia's 2011 investment in WhatsApp exemplifies this: while a dozen ad-supported messaging apps competed in tiny markets, Sequoia saw mobile internet penetration in emerging economies creating a multi-billion-user global communications platform, leading to a 50x return when Facebook acquired WhatsApp for $19 billion in 2014.Stay tuned for our next episode, and meanwhile, you can reach out to us, Vertices Capital, on our website: vertices.vc. Thank you for listening. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit verticescapital.substack.com

    3 min
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Vertices Capital specializes as an "Outsourced Chief Investment Officer" (a.ka. OCIO) 100% dedicated to Venture Capital, partnering with boutique family offices, independent asset managers, and regulated banks. We help them understand the Venture Capital landscape, build bespoke investment strategies, and execute them with precision. verticescapital.substack.com

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  • Creator
    Vertices Capital
  • Years Active
    2025 - 2026
  • Episodes
    31
  • Rating
    Clean
  • Copyright
    © Vertices Capital
  • Show Website
    Vertices Capital