Michael Ströck (Allocator One): Best Practices from 32 VC Fund Investments
Michael Ströck has built and exited startups, co-founded multiple VC firms, and now runs Allocator One (“A1”), one of the few global platforms dedicated to backing first- and second-time GPs. Since 2024, A1 has committed tens of millions of dollars across 32 VC funds across the US, Europe, and Asia, and is an anchor LP in 20 of them.
A1 sits in a privileged observation post: the team screens hundreds of applications every year, covering 80% of the sub-$50 million Fund I & Fund II vehicles worldwide. With a 3% investment rate, A1 has developed an unparalleled “selection machine.”
I asked Michael to make that selection logic explicit. We walked through how Allocator One chooses which GPs to back, his practical advice to LPs who want exposure to new managers without getting burned, and his unfiltered guidance to GPs raising a Fund I or a Fund II. What follows are distilled field notes from over 30 investments in first and second funds — and a rare look at how a specialist anchor LP really thinks about mindset, risk, and edge in the earliest vintages.
In This Article
Inside Allocator One’s “Selection Machine”
Before talking about advice to LPs or GPs, we started with the process itself: how Allocator One defines its universe and which funds it backs. This section looks at their thesis on Super-Emerging Managers and the selection logic that underpins everything else.
Michael Ströck is Co-Founder & CEO at Allocator One. You can find their detailed market reports on their website.
My thanks to Swagat Mohanty for the intro to Michael.
Allocator One’s Thesis on Super-Emerging Funds
The first thing Michael told me was that Allocator One doesn’t use the expression “Emerging Manager.” In his view, the industry’s label is too broad, covering GPs that manage Funds I through IV.
That means you’re putting in the same bucket “a manager raising a $10 million first-time fund out of their bedroom” and another one with eight years of track record deploying a third fund with hundreds of millions under management.
For this conversation, I’ll use Super-Emerging to mean the narrower segment Michael actually cares about: Fund I and Fund II managers, typically sub-$50 million in size, who are still building their firms from scratch.
The funding market for first- and second-time fund managers is kind of broken.
Michael Ströck – Allocator One
Allocator One’s thesis is built on a simple structural observation: there is no genuine institutional interest for first- and second-time fund managers. Access to capital depends on “whether the European Investment Fund or a large sovereign wealth fund happens to have a fund-of-funds program that year,” and when they do, they are generally not great at allocating to this corner of the market.
Michael’s conviction comes from running into the same wall himself after starting several small venture funds in a row. The fund managers A1 backs are often operators or angels coming from non-traditional finance backgrounds, trying to raise a first or second fund in an environment where the rules and gatekeepers were not designed for them. The reliance on track record, in particular, is a non-starter.
Yet Super-Emerging Managers offer a compelling market opportunity to LPs. “Those who pick their strategy well, move quickly and manufacture momentum can get onto the right startup cap tables even if nobody knew their name two years earlier,” he said.
Andreessen Horowitz is not doing VC, not in the classical sense.
Michael Ströck – Allocator One
Michael and his co-Founder Felix Staeritz recognized the venture capital dichotomy: the industry is “bifurcating between very small, nimble funds and very large platforms” that almost form a different asset class.
Allocator One has firmly carved out its place on the small-fund side of that fork and exists to back the Super-Emerging Managers who can use that dynamic to their advantage.
A1 navigates the Emerging VC Conundrum I mentioned in my report: taking advantage of alpha created by first- and second-time funds is a selection issue. I proposed a new approach focused on mindset after showing that the criteria used by top LPs in the field implicitly measure it.
I was curious to better understand how A1 picks its Super-Emerging Managers, which is what I asked Michael next.
The GP Profile That Fits Allocator One’s Model
A1’s first filter is natural authenticity between life story and strategy. Michael’s not looking for people who woke up one morning and decided to “do a fund.” The first question the A1 team asks itself on every application is: “Does the fund’s investment thesis fall out of the last 10–15 years of this person’s life?” If the deck tells one story and the CV tells another, it’s tough for them to get excited.
Within that life story, Michael looks for commercial DNA and personal risk. He is repeatedly surprised by how many would-be fund managers have no real history of “finding ways to make money for themselves and for other people.” Venture, in his words, “is about brand and money and not much else.” The people who survive this first screen are usually operators who have taken genuine commercial bets: they have built products, run P&Ls, written angel cheques, sometimes founded companies and failed.
We look for people with a long track record of escalating expertise in one specific field, with an eye towards returning capital to themselves or to their investors.
Michael Ströck – Allocator One
Michael also expects a standard of excellence from Super-Emerging GPs. Many of the people Allocator One backs have held operating roles in their own companies or at large, recognizable firms. When you ask them who they aspire to be, they point to “household names like Tim Cook, Vinod Khosla, or Bill Gates.” They’ve often worked with people of that calibre or with Founders who have built billion-dollar companies. They’ve looked behind the curtain and actually seen “what really needs to happen to get to very high levels of success.”
Running through all of this is a bias toward first-principle thinking and agency. Michael wants GPs who are used to going back to the source. “In science, you try to understand how the world actually works; in business, you go to the people who run the world.” The managers Michael personally prefers have the mindset to create the right circumstances for success.
For this reason, any form of complaining is a quick red flag. If a GP spends the first five minutes of the call complaining about their country, they’re out. Do something about it, “move away or shut up.” But don’t complain about your environment in what is effectively a sales conversation.
Another conversation ender is basic sloppiness with the numbers. People who “don’t know their way around their deck” send a strong signal that they are not yet ready to run other people’s money.
Allocator One’s Investment Process
Once the thesis and the GP profile are clear, the rest is process design.
A1’s team speaks with around 300 GPs out of 800 applications each year, almost all of whom raise a Fund I or Fund II. They don’t spread those conversations evenly across the calendar: applications are batched around two deadlines a year, which creates big spikes of dealflow.
That timing is deliberate. Looking at dozens of super-emerging funds in the same six-week window before the deadline, when most applications come in, makes it easier to see who really stands out than meeting a random GP every other Tuesday.
Each candidate starts with a heavy application: A1 requires a substantial amount of information about the fund, the GP’s background, and their deals. Only when that picture is coherent enough do they invite the GP to a first conversation.
Our style can be confrontational sometimes, because we want to figure out what’s really going on here.
Michael Ströck – Allocator One
The first meeting is where A1 decides whether it is worth spending more time. Michael estimates that within the first 10 minutes, he forms an initial view of whether he wants to work with a GP. That impression is built on how clearly the story matches what he saw in the application.
However, on that first call, the Allocator One team is not just checking boxes; they are trying to understand who is actually sitting in front of them. Michael pays close attention to the GP’s quality and integrity, whether “they say what they believe is true and not what we want to hear.”
I asked Michael how they make sure they get the truth from fundraising managers. “Pressure brings out people’s personality a bit more.” Because a call with A1 can quickly turn into a €3 million commitment, Super Emerging Managers share more information than they would with other LPs.
But A1 doesn’t just rely on first-party information. If that first pass is positive, the work shifts to due diligence. Allocator One will run a series of reference calls, including with people who are not financially tied to the current fundraising, and, where there is a track record, go deal by deal to understand the GP’s real contribution.
Allocator One has built an unparalleled global brand attracting most Super-Emerging Managers.
Allocator One’s “selection machine” rests on a few hard convictions, forged by running small funds themselves and operating as entrepreneurs. They’ve refined it into a process that lets them see a large share of the Super-Emerging Managers raising a first or second-time fund each year.
That vantage point offers concrete lessons for LPs seeking exposure to this highly-performing but volatile segment, and for GPs hoping to be on the right side of their filter.
Advice to LPs Investing in Super-Emerging Managers
If you’re an LP thinking seriously about Super-Emerging Managers, there are a few elements in Allocator One’s model worth considering.
Michael’s starting point is that you can’t time venture. “Vintage effects are strong. If you think you can time the market, there’s a high chance you won’t make money.” That’s why Allocator One’s motto is “Allocate or stagnate.” They solved that problem by investing in every vintage and focusing not on whether to deploy, but on who they would rather deploy with.
A second lesson for LPs is to pick your lane and stay in it. Michael’s view is that it’s “very hard to come to any kind of conclusion about who is really good” if you bounce between “a fourth-time fund in Turkey and a first-time fund in the US.” By contrast, if you talk to 300 first-time fund managers a year in the same segment, “it turns out that it’s quite clear who the standouts are.”
Third, build pattern recognition over time. A1 can underwrite Fund I & Fund II risk early by talking to a large number of managers and by following them across multiple cycles, which makes it easier to understand how the best stand out and learn what “great” looks like.
Venture is about brand and money, and not much else.
Michael Ströck – Allocator one
Fourth, LPs must create a brand. Michael is very explicit that most LPs never even see the best first-time managers because “they don’t really have a brand,” so those GPs don’t think to send them a deck. Michael learned the importance of awareness at Y Combinator, of which he’s an alumnus. “Every founder knows about YC,” he told me, and he wants Allocator One to be just as obvious for anyone starting a new VC firm.
A final point for LPs is to be honest about what you really bring to the table. Michael learned over time that he prefers investing in managers who “need to be left alone.” They want capital, the signal an institutional anchor like Allocator One can send, and a peer group of first-time fund managers they can tap into. “They don’t want our opinion on how to run their firm.”
The Winning Characteristics of High-Performing Super-Emerging Managers
One of the core insights in my report on Emerging VCs is that if you want to get good at selecting them, you have to evaluate them as entrepreneurs building a firm, not as Investors picking deals.
Given Michael’s path — from Founder to Emerging GP and now fund-of-funds manager — I wanted to see whether his experience would point to the same conclusion.
The first pattern Michael sees among his top performers is that they see themselves as entrepreneurs building a 10–20-year franchise. Many of them could “stay at Google, stay at Apple, go to McKinsey, or raise $5m pre-seed for a startup,” but they consciously choose to build a fund and can explain why this is the project they want to commit to. “If I don’t get the sense that they’re building their legacy, that’s a huge red flag.”
That long-term identity also shapes how they relate to LPs: they show up as if they were entering a multi-fund partnership, not just trying to close a single cheque, and they do the work upfront — talking to existing A1 GPs, understanding the terms, and coming in with a clear sense of what they want from the relationship.
A lot of GPs come into a conversation with an LP with a set idea in their head about how we should operate, which to me is insane.
Finally, like most high-performing entrepreneurs, the best Super-Emerging GPs show “persistence and sensitivity“: they are relentlessly present without becoming intrusive. They read small signals, adjust how they show up, and can “write you five WhatsApp follow-ups a week and still not get on your nerves,” because each touchpoint is interesting, engaging, and personal.
In practice, they “figure out how to talk to you personally” and show LPs the same mix of hunger and discernment they expect from the Founders they back.
Go Further: Read my report “Emerging VCs: Selection Through Mindset” to learn how the best LPs select Emerging GPs today, and a new approach to improve allocation.
Conclusion
You don’t often get to talk to someone who has been a Founder, an Emerging GP, and is now running a focused fund-of-funds in exactly the segment my Emerging VCs report is about.
Michael Ströck has a rare vantage point. Hearing him describe Allocator One’s thesis, target GP profile, and investment process from the inside confirmed a core intuition behind Mindset-Based Investing: once you’re in super-emerging territory, you can’t rely on track record or brand shortcuts. You are really underwriting how someone thinks, behaves, and builds.
The managers Michael invests in look a lot like the Founders they want to back themselves: long-term, curious about who they work with, serious about preparation, and strangely good at staying present without becoming annoying. Evaluating them through that lens is an efficient way to navigate the Emerging VC Conundrum.
For LPs, Michael’s experience is a reminder that you don’t get super-emerging alpha “for free”: you need a selection machine built on a strong thesis, a clear lane, and a brand that the right GPs care about.
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