Bion Ludwig

Most of you have been on the receiving end of the insanely antiquated way comp data is used to make hiring and advancement decisions...nearly zero context, inadequate sample sizes, etc., etc. Just crazy how long this industry has existed without real technical threats...the Compa team is here to shake that up and are killing it...extremely thrilled to be a small part of this journey.

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Why some of the most established LPs are increasing their exposure to emerging VC managers It’s interesting what you hear when you talk to some of the world’s largest and most successful endowments and foundations. I’ve recently been meeting with several major allocators, and they had all reached a similar conclusion. After decades of investing, they determined that some of their best venture returns were coming from the smaller, emerging managers. Obviously allocation to established managers with strong track records remains critical. But smaller funds are hungrier and more focused. They have to prove their edge to survive. Their smaller size means they can make high-conviction bets, build deep relationships with founders, and move fast when great opportunities appear. The data supports it. Cambridge Associates has found that emerging managers, typically Funds I to III under $250M, have historically outperformed established firms by around 3–5% net IRR over the past two decades. PitchBook’s 2023 analysis showed that Funds I and II deliver the highest average TVPI of any fund sequence. And research from the Kauffman Fellows program found that smaller funds generated higher DPI compared larger funds. Many of the world’s most established LPs have quietly increased their venture exposure toward emerging managers - in some cases more than half of their venture allocation. They’ve seen first hand that in venture, the smallest funds often deliver the best outcomes. #emergingmanagers #venturecapital

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Access changes everything. Lowering the Jetstream Venture Fund minimum to $5,000 creates a new entry point for people who want exposure to high-growth companies. Excited to see where this goes. Full details in the press release below.

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One takeaway from GoVCLab’s piece on emerging VC deal sourcing: strong dealflow isn’t luck it’s built. In NYC, the best pre-seed opportunities don’t come from cold inbound. They come from being in the rooms, building real relationships, and being clear about your thesis. As I focus on founders in early stage tech , I’m realizing sourcing is really about trust. The more value you add and the more consistent you are, the more the right deals find you. Curious what’s worked for others building early-stage pipelines in NYC. https://lnkd.in/eNCEjXqx

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SF VC Takeaway #2: Pricing expectations, performance bars, and what’s actually getting funded. One theme that came up repeatedly in SF was how far pricing expectations and performance bars have shifted, even compared to just a few years ago. A few things investors kept anchoring to: 1️⃣ Median Series A valuations are higher than their 2021 peaks, but fewer of them are getting done. 2️⃣ Capital is being concentrated into fewer and fewer companies (and lots of capital!) 3️⃣ “Good” progress is no longer enough and the bar for standout performance has moved in an AI-native world So what does “top performance” mean right now? One investor told me that top quartile seed companies in their portfolio are going from $0 to $2M in ARR in <12 months. Outside of pure traction numbers, a few other themes that came up to describe "top performance": 📈 Explosive early revenue ramps (or a very credible path to them) 📊 Strong velocity and momentum for 2 quarters in a row, even if the baseline is small. 🚀 Clear signals of category leadership, not just product-market fit. Sometimes shown by either domain expertise, speed of product optimization, or by lack of competition in the category. This creates a counterintuitive dynamic where it can be easier to fund a company with strong pedigrees in a hot space and no traction yet than a company that went from 0 to $1M ARR at what used to be considered a rapid pace. Pricing today is driven by trajectories, not moments in time. We used to say investors invest in lines not points; I think that's more true than ever now because crossing certain milestones doesn't carry as much influence as it once did. Finally, investors still say that valuation matters, but many of them are acting differently. Pace and belief in category-defining companies really sets the price; while slower growth gets scrutinized rather than discounted. One silver lining in the camp of durable growth: Series A rounds are happening so fast that many companies don’t yet have meaningful history of retention data. Large bets are being made on velocity before the durability is proven. Several investors told me the same thing: we may soon swing back to a market where retention, not growth, becomes the defining metric. Let's hope so. I'll share my third SF VC takeaway tomorrow!

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