20VC: Semil Shah on The Biggest Mistakes VCs and LPs Made Over the Last 24 Months, Why LP Churn is Coming, Core Lessons on Scaling from $1M Haystack Fund I to Today and How To Find, Win and Manage LPs as an Emerging Manager

Are talented people also entrepreneurial? And I don't believe that. I believe there's tons of talented people who are not entrepreneurial, and there are a bunch of entrepreneurial people who don't have the requisite talent. Really what we're trying to do is trying to find that overlap of who has the talent plus the entrepreneurial ability.

A lot of people that knock on our door with this amazing product experience or amazing experience, you don't get the sense that... they really want it, that they're really hungry. And I also believe... that most people who have an entrepreneurial gene in their sort of hard-coding have expressed that in some other way before they've knocked on our doors.

I'm sure you've seen this, too. There's probably multiple, multiple companies with, like, over $50M of cash with no product-market fit. This is wild.

I follow a lot of, honestly, what USV does .... I think they're the best pound-for-pound fund in the world, both operationally and in every way.

For you, for me, for a lot of those people, they haven't even lived through a recession. You have to be well over 40/50-years-old to have actually lived through a recession as an adult. All the dips that we've had have been pretty narrow in terms of their duration.

In a professional context, what I'm running from is just the fear of not being able to participate in the way I want in the ecosystem.

Are those hot seed rounds necessarily indicators of entrepreneurial value creation? Probably not. Are they best suited to understand what's at the cutting edge of product development or infrastructure? Probably.

Our job is to teach the founders how to interact with investors and raise capital over successive rounds, and part of that should be to choose the best partners for you.

It's better over the long run to pick the entrepreneurs you want to work with and collaborate with those syndicates over time rather than trying to box out your territory on each one.

I think that if you're not getting name-checked by institutional LPs and other people aren't talking about what you're doing, it's almost impossible to raise institutional capital, whether it's a $3M check, a $30M check, from an LP. So really, that should be the first for an emerging manager is how do I get in the chatter zone of these LPs?