Jerry Neumann is a wildly successful early stage investor and one of the best writers and thinkers about the craft. The founder of Neu Venture Capital talks about whether AI is a consensus trade in venture, the theory and reality of portfolio construction, and the origin story of an investment that returned 5000X. We also talked about the reception to a book that Jerry coauthored with Elizabeth Zalman, Founder vs. Investor.
The episode is now available on Apple Podcasts, Spotify, Amazon, and YouTube Music.
Chapters
00:00 Introduction to Startup Investing
01:21 Jerry Newman's Journey in Venture Capital
02:45 Understanding Power Laws in Venture Capital
09:54 The Dichotomy of Investment Strategies
12:17 The Impact of Early Stage Investments
14:39 Insights from the Book: Founder First Investor
18:55 Navigating Founder-Investor Relationships
25:43 The Trade Desk: A Case Study in Success
34:43 Investing in AI: A Contrarian Perspective
38:35 The Art of Cold Emailing Investors
Takeaways
Investing in startups requires a deep understanding of the ecosystem.
Power laws dictate that a few investments will yield the majority of returns.
The average outcome in venture capital can be misleading due to skewed distributions.
A smaller, focused portfolio can sometimes be more effective than a large one.
Founders need to manage their boards effectively to maintain their positions.
The relationship between founders and investors is crucial for success.
The Trade Desk exemplifies a successful investment strategy in a competitive market.
AI technology is powerful but should be viewed with skepticism regarding its potential to replace human intelligence.
Cold emailing investors can be effective, but personal introductions are often more successful.
Understanding the other side's perspective is key in founder-investor negotiations.
The content here is for informational purposes only and should not be construed as investment, legal or tax advice. The opinions expressed by guests are their own and do not reflect the views of Seaplane Ventures. Our host, guests and clients may hold investments discussed in this podcast. Please invest responsibly.