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The Art & Science of Portfolio Construction Plus Valuation Realism with Morgan Flager

  • Joe Magyer
  • Oct 15
  • 2 min read

Morgan Flager is the Managing Partner of Silverton Partners, an early-stage firm based in Austin that has had more than 30 companies IPO or get acquired over the years. We talked about the art and science of portfolio construction, when to bend on price, and which of team, product, or market is most important. Please enjoy.


The episode is now available on Apple Podcasts, Spotify, Amazon, and YouTube Music.


Chapters from The Art & Science of Portfolio Construction Plus Valuation Realism with Morgan Flager


00:00 Introduction to Silverton's Investment Strategy

11:37 Portfolio Construction and Investment Philosophy

19:34 Navigating Secondary Investments and Exit Strategies

26:24 Handling Underperforming Investments

30:52 Evaluating Founders, Teams, and Market Dynamics

32:42 Challenging Conventional Views in Venture Capital


Takeaways from The Art & Science of Portfolio Construction Plus Valuation Realism with Morgan Flager


  • Silverton’s lane: early PMF—writing ~$3–7M checks into companies with a few customers and early revenue; ~70–80% of deals fit this profile.

  • Austin-first advantage: ~60% of investments in Central Texas with a tight, reputation-driven network that rewards doing right by founders.

  • Team > market > product (over time): early bets are founder-led; as companies mature, the team becomes the decisive factor.

  • Portfolio construction discipline: ~20–25 companies per fund; despite fund growth, ~40–50% of total dollars still go in on the first check to keep seed as the main return driver.

  • Objective reserves process: partners anonymously rank each other’s companies for follow-ons to reduce politics and fight “fumes.”

  • When to double down: data-driven reads on growth, hiring quality, pipeline, and sales efficiency—but equal emphasis on knowing when something isn’t working.

  • Secondary playbook: if a breakout round offers 5–10x on selling 10–20%, they’ll often take it—bank DPI, let the rest ride; near fund-end, selling a majority is common to honor LP timelines.

  • Owner mindset inside the firm: team members co-invest alongside the fund (via loans) to encourage prudent trims; in 2021, 10–20% sales at strong marks were mandated.

  • Handling “cockroach/lifestyle” cases: aim for alignment and incentives to drive an outcome; redemption rights exist but haven’t been used.

  • Valuation realism: pushing seed prices too high can trap founders and misalign with multi-stage funds that optimize for $10B-or-zero outcomes.

  • What Morgan listens for: authentic origin stories that reveal grit and a deep connection to the problem—fuel for the “dark, lonely days.”



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.

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