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. 34. "The Discipline of Conviction" (ep. 8 of the series "101 VC Core Principles")

    APR 30

    34. "The Discipline of Conviction" (ep. 8 of the series "101 VC Core Principles")

    Welcome to episode number seven of our series called “One O One VENTURE CAPITAL CORE PRINCIPLES FOR NEW LPs, WILLING TO UNDERSTAND HOW VENTURE CAPITAL REALLY WORKS”… Let’s dig in. First, number 29 VC firms use a shared vocabulary to discuss common emotional traps to prevent them, such as “separation of church and state”. VC firms need a common vocabulary because emotional mistakes are easier to see, name, and correct once the firm has a shared code for them. “Separation of church and state” is one such code: it tells the team to separate admiration for a founder from the cold investment case, just as top firms use scout programs and written memos to keep judgment anchored in process rather than chemistry.Second, number 30 “Separation of church and state” is the discipline of preventing the emotional “thrill of the chase” (falling for a founder) from clouding clinical decision-making. The “thrill of the chase” is dangerous because charisma can masquerade as signal, especially when a founder is unusually polished or the company feels culturally magnetic. A useful counterexample is Revolut, where George Robson has described being drawn to the founder and product while at Morgan Stanley, but only later joining Sequoia once the business case and timing were clearer, showing that attraction is not the same thing as conviction.Third, number 31 The earliest indicator of good investment judgment for a new investor is how they choose to invest their time. The earliest tell of good investment judgment is not the pitch they like, but how they allocate their time before a pitch turns into a decision. Bessemer’s public anti-portfolio shows why this matters: they preserved institutional memory by writing down what they missed, which is only possible if investors spend time on pattern recognition rather than merely on meetings that are already obviously hot.Finally, fourth, number 32 Investors who tend to achieve “base hits” instead of “grand slams” are coached to take more risk to achieve the necessary asymmetric upside. If an investor keeps producing base hits, the remedy is usually not more caution; it is a higher tolerance for asymmetric risk, because venture rewards outsized winners, not safe singles. Accel’s early commitment to Facebook is the right mental model here: the firm backed a company with enormous upside while many investors would have preferred a more familiar, smaller idea, and that willingness to lean into scale, not incrementality, helped create a generational fund outcome. 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

    2 min
  2. 33. "The Psychology of the Bet" (ep. 7 of the series "101 VC Core Principles")

    APR 22

    33. "The Psychology of the Bet" (ep. 7 of the series "101 VC Core Principles")

    Welcome to episode number seven 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 25. Courage is necessary to swallow one’s pride and invest in a deal at a high valuation after having passed on it previously.Number 26. Courage is also required to make an investment that nobody else supports, enduring the feeling of looking "stupid" to peers and partners.Number 27. The two primary psychological barriers preventing good decisions are the fear of missing out (FOMO) and the fear of looking stupid.Number 28. An investor’s largest decision errors typically stem from a psychological bias or emotional trap, not from calculation mistakes.Let’s dig in…First, courage is necessary to swallow one’s pride and invest in a deal at a high valuation after having passed on it previously.The hardest version of courage in VC is returning to a company you once passed on, now at a far higher price, because the renewed conviction must overcome both ego and the internal scrutiny of partners who remember the original pass. Benchmark initially declined Snap's seed round when it seemed like a niche teen messaging fad, but Mitch Lasky then led the firm into Snap's $13.5 million Series A at a $60–70 million valuation in 2013 and continued backing subsequent rounds at higher prices, a willingness to admit the initial hesitation was wrong that ultimately produced a return worth hundreds of millions when Snap went public at a $24 billion valuation in 2017.Second, courage is also required to make an investment that nobody else supports, enduring the feeling of looking “stupid” to peers and partners.Investing when nobody else will… Some of the most important investments in VC history were made by a single investor willing to write a cheque that every peer in the market considered either premature or irrational. When Fred Wilson and Union Square Ventures backed Twitter in July 2007, just four months after launch and with no discernible revenue model, they were essentially alone in their conviction that Twitter's network-effect architecture justified the bet—a position that peers found hard to defend at the time but that ultimately generated one of USV's defining returns.Third, the two primary psychological barriers preventing good decisions are the fear of missing out (FOMO) and the fear of looking stupid.NFX research identifies the two primary psychological forces distorting VC decisions as FOMO (fear of missing out) and FOLS (fear of looking stupid), and both reliably produce opposite but equally damaging errors. FOMO drives investors into crowded, late-stage rounds at consensus prices where upside is gone; FOLS prevents them from backing genuinely contrarian companies, like an Uber competitor after Uber raises billions, because the social risk of being wrong in public outweighs the financial logic of the investment.Finally, fourth, an investor’s largest decision errors typically stem from a psychological bias or emotional trap, not from calculation mistakes.Investment mistakes at the top level of VC are almost never arithmetic failures, they are failures of emotional discipline, where groupthink, overconfidence, or herd behaviour overrides rigorous underwriting. Tiger Global's 2021 venture fund deployed $12.7 billion into 315 startups in a single year, driven by FOMO-fuelled herding rather than independent conviction-based analysis, and the fund was subsequently marked down from $93 million to $65 million per unit with a negative 15% IRR, a bottom-decile outcome caused not by bad models but by the psychological trap of chasing consensus momentum at any price. 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
  3. 32. Three structural mistakes Family Offices make in Venture Capital.

    APR 14

    32. Three structural mistakes Family Offices make in Venture Capital.

    Three structural mistakes Family Offices make in Venture Capital. Most family offices entering venture capital do so with genuine intent and real capital. The underperformance that follows is rarely about access. It is about construction. Three mistakes come up consistently, and they tend to compound one another. Random deal selection. Investments arrive through personal networks, co-investor referrals, or sector momentum. Each deal gets evaluated on its own merits, and the portfolio grows by accumulation rather than design. The problem is structural: venture returns follow a power law. A small number of investments in any vintage drive the vast majority of returns. A portfolio built opportunistically is unlikely to capture those outliers systematically, regardless of deal quality at the individual level. Without a deliberate construction framework, diversification becomes a fiction. Cyclical deployment. Capital goes in when sentiment is strong and gets pulled when conditions soften. This is intuitive behavior, borrowed from asset classes where it sometimes makes sense. In venture it does not. Fund vintage years are not interchangeable, and the data consistently shows that some of the strongest-performing vintages followed periods of low market enthusiasm and reduced competition for deals. Skipping a year means skipping a vintage, and that gap in the compounding sequence is permanent. Consistent deployment, across market cycles and regardless of short-term sentiment, is not a stylistic preference. It is a return driver. Inappropriate concentration. A single manager, sector, or company receives a disproportionate share of the VC allocation. The rationale is usually familiarity: an operator-turned-investor who knows the sector, a GP relationship built over years, a founding team the family knows personally. That familiarity is real, but it is not the same as the information advantage that justifies GP-level concentration. A GP concentrates because they hold board seats, governance rights, and ongoing operational visibility. An LP concentrating without that infrastructure is taking GP-level risk with LP-level information. The positions that look like conviction in good outcomes are often just proximity. These three patterns are well understood individually. What is less discussed is why they persist in otherwise sophisticated organizations. Part of the answer is that family offices are structurally well positioned for venture, and that positioning can mask weak process. The absence of investment committee cycles, minimum ticket constraints, and career risk around non-consensus bets are genuine advantages. They allow a family office to move at the speed of a GP decision and back managers that institutional capital cannot reach. But those advantages only create value inside a disciplined framework. Without one, they simply allow poor decisions to be made faster and with less friction. The family offices building durable venture portfolios tend to look similar in their approach. Allocation spread across managers, stages, and geographies. Capital deployed on a consistent annual schedule. The portfolio designed as a system from the outset, not constructed reactively as deals arrive. None of this is complicated. Most of it is not done. For CIOs willing to treat venture as a portfolio construction problem rather than a deal selection problem, the gap between current practice and institutional-quality results is not large. It mostly requires deciding to close it. 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
  4. 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
  5. 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
  6. 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
  7. 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
  8. 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
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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
    34
  • Rating
    Clean
  • Copyright
    © Vertices Capital
  • Show Website
    Vertices Capital