E451 | Carmen Alfonso Rico, Cocoa Ventures & Evan Finkel, Integra GA: How LPs Build Conviction When Evaluating Emerging Managers

26:58I don't say to Carmen, well, I would like you to have a male co-GP or more often the case, a female co-GP, or I would like you, the two of you focused on this. And then I want, because this is important to me, this sector, I want one GP fully focused on this. Exactly. That makes zero sense. It's not obvious to me, though, that large institutions outside of government money are not. I mean, maybe it's a little bit different, but I don't know that it's qualitatively different in the sense that I've heard stories of large US fund of funds or large global fund of funds that go to, for instance, emerging managers and say, we'd love to write you a check.

27:40We know you're raising a$30 million fund focused on X. If you would double that to like$75 million and do this, then we could write you a$25 million check and we could be an anchor. So that is different like quantitatively. I don't know that it's a qualitatively different thing when you're changing somebody's fund strategy. This is great. This is spot on. And I've had that with follow on. So Cocoa is very outspoken. We don't follow on. And this is out of scope here, but happy to discuss at any point. But this goes back to my point that as a GP, you need to be very aware of the incentives of the LPs that you take money from.

28:16And again, these people want to, like this fund that tells you that you should follow on or like you should raise 75 million and is because they need they have their own game to play and in this case probably is they need to deploy and it doesn't make sense for them to deploy less doesn't move the needle and and whatever and so you just need to like don't waste your time with funds that are not a fit and for for your strategy and do the work to understand what is actually why of those lps investing and whether there's a fit and if there's not a fit no problem you don't need to fit everybody right like you um stick to the strategy that you believe on stick to your own superpowers and there will be eventually people who um match that one thing that i have seen to be different in as so the more sophisticated you go with lps the more they understand that it's a commitment for the long term, right?

29:12Like I have metal piece who like literally like just commit to one fund. And that means that unless you end up in prison or like, you know, a runaway with the money or something, like they are committing for quite a few funds because they understand that A, this is a very long-term game and it takes like long-term to show actual results for real value. And two, that also because of the risks that we take, it might be that you have one extraordinary fund and the next fund is like horrible or it takes longer or is long. And I am sure you've all seen all the newcomer, like he's publishing all the returns from your team call.

29:52And you can see, right? Like that sometimes if you want to like do a 10X of a fund, it might be that the next fund is like, you know, 1X or 2X. Like, how do you think about that commitment of like, do you invest in one fund or do you invest in multiple funds? And then, yeah. So I think it's actually dovetails nicely with the matrix, actually, I understand you were talking about, because how you sort of evaluate those funds in sequence, but I think, Carmen, to answer your question, right, I think the way that we think about it when we invest in a manager is we expect that to be a long-term multifun relationship, provided that, you know, nothing material changes, right?

30:29And so I think the goal here is to say, you know, venture is a long-term game, you know, it's a long-term asset class, results sometimes happen very slowly and then all at once. And so I think there needs to be a little bit of patience, right? And there needs to be an understanding that if you like the manager, you know, that should be thought of when you invest in the first check as the first of sort of a set of checks. However, I think that is only true if you have a strategy that's oriented around finding managers with strategies that should work across multiple market cycles and that are resilient to changes in sort of like the overall market, right?

31:08So if you're trying to sort of dance to the raindrops and pick one vintage from this manager and one from this and one from this, what is the likelihood that you're picking correctly? I would sort of put forward that's probably not that high. I think you need to find people that have strategies and that have unique access and that have a unique sort of right to win or unique sort of like GP thesis fit. And then you need to really get conviction that that's a strategy that should work across multiple market cycles. And so I think when we invest in a manager, our expectation is going to be sort of a multi-fund commitment.

31:40That doesn't mean we're putting anything in writing, right? There's nothing guaranteed, right? Because things do change. But in general, our expectation when we invest in a manager is that that should be a multi-fund relationship. I think the flip side of that though, is that if you as a GP materially change your fund over time, you should not be surprised when LPs that invest in earlier funds take a step back and say, hey, is this really the same product? So if you go from 25 to 30 million, I think you should expect that most LPs will know that's sort of a normal inflation-based change, and it's not a big deal.

32:16If you go from 25 to 30 to 100 to 250, I don't think you should be surprised when some LPs say, hey, this is not exactly what we signed up for. Meaning I don't think LPs are making a commitment that they'll follow you through fire and brimstones. I think that as long as everybody knows what the journey entails and that stays the same, then you should have a reasonable expectation that your LPs are going to be interested in multiple funds. But if you change something materially, it shouldn't be a surprise if some LPs decide that's not the right product for them. And then one more very small point, and then I'll let you make your point, which is I think as a GP, I feel that you have to have the same loyalty to your LPs that you expect from them.

32:55So if you accept friends and family who decide to roll with you in fund one when you're raising your$10 million micro fund, my personal belief is that if they want to write you a$10 ,000 check when you're on fund three and you're raising$50 million, you have made the agreement with them implicitly that you are going to take their checks until they are no longer interested because they supported you when you were in the very beginning and there was nothing to nothing to rely on so i think there's also that agreement right that that gps should personally have with lps which is if you back me in fund one no matter what like even like whatever the case is like i will take your check and i'll figure out a way to make it work can i ask you just because we've had this conversation many times with uh with the gps uh because we do we do feeder structures right yeah and almost everyone in fund two or fund three, they get to a point where they have this group that they want to continue accommodating, but they're also getting to a point where it probably makes sense to roll them into a feeder.

33:54Oh, that's fine. Yeah. Do you have any perspectives? You're saying that's fine, Evan. Have you had any thoughts around that, Carmen? It's a very interesting question. The point with me and Cocoa is we're built on AngelList. So that means that administratively, like it doesn't really like having 10K checks. My only point is I do the capital call up front for anything that's below the minimum check size. And then they don't take any additional work. So from an administratively perspective, it doesn't really make any sense. It's actually more complex to probably have like a feeder structure than like what that takes.

34:30My only restriction is I cannot have more than 99 LPs because of the SEC. And I am so luckily like far away from that. That would be like intense. But I don't because I have it sort of solved. But I think that you need to manage that loyalty, which is like absolutely core to the gratitude that you feel when somebody trusts you before you've actually sort of made them any money. And that trusts you with that commitment, I think you should never forget. Like there are certain cases, like I do feel overwhelmed with gratitude in like people actually believing and wanting to lock in, be institutional, be their personal money into Cocoa for 14 years, trusting that I'm gonna like return it.

35:21And that's something that you should never forget. At the same time, you run a business, right? And so like, it's how do you combine those? I'm very lucky that on angel list, that is pretty easy to manage. We see just a note on it. What we see is everything from they will roll people into a feeder and they will put the cost of that feeder on the LPs. Others take it themselves and say, we took their money in the beginning. Now we need to do this. So we'll put them and we've seen anything in between that spectrum. So I think really everything is fair to do, so to say. It's just a matter of how to do it.

36:01There's also a lot that say that they view this group also as typically strategically relevant. For that reason, they put the cost of the feeder on the rest of the LPs because actually the big pension funds should be super happy that this group is still there and supporting with all the operational stuff. So for that reason, you know, there's an argument to be made there. I think one thing that Evan said, and he used the word a few times, is probably very important for emerging managers. And it's this notion that you are selling a product. And just like the word product, like just understand that.

36:41Like you're selling a product to LPs, you're selling a product to founders, and you're selling a product to the market. and you knowing what that product is is very important and so and that also explains like whether you know that also makes it easier to understand like whether that product like fits with other strategies of all peace it also makes it more easy to understand that if you completely change a product like well the buyer of the product might reconsider buying it again and but it's very very important that you understand that and also from that's a more a rational like kind of strategy level but also at an emotional level by the way especially if you're like a solo gp i sort of had this was able to verbalize it this summer and which is cocoa sells a product and i am the product right and just knowing that like an understanding that um that also has its trade-offs and like that you are like what the fund is selling and your superpowers, your investment decisions, your network, your relationships, that's what the fund is selling.

37:48It's very, very important to manage everything that comes around building that product. So I think the word product is a key one to incorporate in your understanding of what you're actually building. So maybe just to, I guess, loop this back to how we evaluate this product where everybody has been waiting 39 minutes to get my answer. So I think the framework you put together, Andres, it's pretty solid, I think, in terms of the points it touches on. I think it hits the keynotes. I guess a couple of things that I would overlay on that. So first piece is when we're evaluating this product, because I think that's what it is.

38:25You're bringing a product to the market. We have to decide, do we buy this? Do we not buy this? For us, fund one, but even continuing into fund two or fund three is, are you a credible investor? Do we believe in you as the investor and the GP running this or the team of GPs that are actually running this? And then, you know, does the thesis make sense? Do we like it? Do we believe the thesis? Do we believe it's this is a thesis that is going to be resilient again to market cycles, right, and work over the long term? But then it's also that interaction term, right? It's are you the right GP or GPs to be executing on this thesis, right?

39:02Because a lot of times we will see people who identify that there's a certain zeitgeist and that's great, but they're not actually the right people to be executing on that. Right. And so you need to actually have that, like it's analogous, right? The founder market fit, right? You need to have like GP thesis alignment or GP thesis fit. And so I think that's super important. One other thing, which, you know, I know you have sort of like a little bit later on in your, in the matrix, right. But something we look at for fun one, which I don't think a lot of LPs do. And I'm frankly not sure why. is historical track record from the GPs, right?

39:35So I want to see your angel investments. I want to see the stuff you did at prior funds. I want to see like all that stuff because while past performance is not indicative of future results, those are helpful data points, right? And I think you could start to see patterns. You can start to see directionally things are helpful. Like if you think in fund three that the fund one performance is going to be really important in making your fund three decision, then why in fund one or fund two or fund three are investments that are even more seasoned than the fund one investments, not relevant for your investment decision-making process.

40:06Yeah. So we have it in the fund one, but we call it a bit deliberately a different word than track record and performance continuity. Instead, we call it proof of concept through track records or analogous achievements. And that's because a bit of this recognition that when you're coming to market with a fund one, And it's not always viewed as just the pure track record. Sometimes you need to be a little more creative in putting that together. And I do think that you're absolutely right that, of course, it needs to be looked at. I also try and not put it in as the first line because probably also a bit of a pedagogical aim here to say, fun one, this is not where you spend all your time.

40:48When you look at track record, do you look at the output? And it's probably a combo, but like, do you look at sort of the output or do you look at the decision that was made with the information that was available at the time? And then I'll tell you why I sort of battle with that. Ideally, at one point, those converge like a good decision leads to a good output. But as you're assessing it in the midst of development, like how do you think about that? So I think input and process are always super important, right? Like, how did you source this investment? Why did you think this was a good decision?

41:24You know, how does it compare to other decisions you made or other opportunities that were there, right? Like all the sort of input questions you'd assume, right? How'd you diligence it? How'd you underwrite it, right? Like, I want to know that you have a really solid process that you've sort of refined a little bit. And that should, over time, lead to better outcomes, right? But the outcome is still relatively uncertain generally. If you just left the previous fund where you were for three years, now you're launching your own fund, those investments are only three years old. And so I don't expect there to necessarily be outcome yet.

41:57And so I don't want to over-index on that. But I think process is super important. But the other thing that's actually very, very helpful is figuring out of your track record, how many of these investments or what percentage of the investments, broadly speaking, sort of map to the thesis you're trying to execute on now, right? Like, did you work the muscle before? And now you just realize that this is maybe a better product or a better vehicle to like, continue to do that? Or are you being opportunistic? And I'm not even saying that as a value judgment, right? But I just want to understand, like, have you done this?

42:30What is your ability to source deals at this stage or in this sector, this vertical, in this geography, right? And I think looking at prior track record is helpful because it gives you a sense of what ponds was that person fishing in before, and then how relevant is that for what they're trying to do now. So I think it's really about process and about understanding how relevant their past experience is to what they're doing now, and less about, you know, what's the markup on that company, because again, I don't think that that is necessarily something you're going to have a lot of clarity on at that point.

43:02I think it's funny, Carmen, that you ask, because I spoke earlier today with a GP that has gone from crypto to European resilience. And I, of course, asked him a bit provocatively. So you flipped from crypto to defense. Tell me about that. And then we had a super meaningful conversation about, well, what was the thesis behind them doing crypto to begin with? And how did crypto then play out? and how does the skill set and the things that they saw for crypto then kind of develop? And where are we today? And why does it then feed actually quite well into European resilience strategy? Because obviously European resilience, I was also making it provocatively because the subsector of European resilience is quite closely tied to cryptography and cybersecurity and computation and so on.

44:02So that really makes a ton of sense, right? But from the outside, you can definitely frame it as the other. And for that reason, the nuances are here super important because we're all watching the market and we're all hearing the critiques of the funds that flip or the teams that flip from crypto to resilience because that's the side. I haven't heard the European resilience expression. As soon as you get into it, because people don't like to say defense or weapons and so on. They try to receive it. Okay, interesting. The reason I asked and I've discussed this actually, this framework with Evan, but so being very clear that we're here to make returns, like that, like, let's not forget that that is the ultimate goal.

44:50it's also interesting to me or it helps me to acknowledge that there's so much randomness right that we don't control and I'm talking as a pre-seed investor and on that output and so how I try to like kind of hold myself accountable and this is why I'm interested in how an LB thinks about it is that my formula and it's a COCOA's formula is best access rigorous decisions with the information that you have available, and then obviously hard work, right? And I call it like it's network muscle and hustle. And I also say like it's EQ, IQ, and EQ, JQ, so judgment, AQ and IQ. But there's this concept that if you have the best access and you consistently make good decisions with the information that you have available at the time, which is obviously not all the information that will determine the outcome, with rigorous processes and work really really hard you will end up hitting the right thing and it's also how I try to learn from things in the sense that whereas a company ends up being like a mega success or not like the decision was it the correct one with the information that was available because that's what I could sort of control and can learn from because I might make a really bad decision like and then the company ends up being the bomb like does that like what do I learn from it is and and so I always think of this idea of like network muscle and hustle or like best access, good decisions and hard work, right?

46:21And it's interesting to see how LPs think about it when you fundraise every two to three years versus your day-to-day and how you keep sane basically on your day-to-day when you invest in basically the unknown. I was just going to say, this is something we spend a lot of time on. If we're looking at a fund two or a fund three, right, is what were your lessons learned you know, and how did you learn them, right? Like if you made decisions with the best possible decisions with the information you had, great, right? The outcome won't always be what you want, but like, you know, the goal is to sort of shift the curve right in the direction you'd like or increase the probability.

46:55But the extent you made decisions that were, you know, suboptimal, even at the time, what did you learn from them, right? And like, how did we, how do you incorporate those learnings going forward? I think that's super important, right? Because you, of course, want to make the right decisions with the information you have all the time. But the reality is in venture that just doesn't always happen, right? And so what were lessons learned? Are you making the same process mistakes over and over again? Or, you know, have you learned from them and refine what you're doing? I think that's super important, you know, to make sure that the manager has like that self awareness to improve their processes over time and to really identify like when they did, they made a process error, let's say, right, and how they can avoid that in the future, improve that in the future.

47:37Carmen, you did Hopin and Carmen is smiling, Evan is smiling and Darius was thinking, can I bring this up? But I do think it's an incredible company and investment to pull up as an example of thinking through, because I'm sure you've spoken to so many about it because back a couple of years ago, everyone looked at it and said, this is the best investment ever. And then COVID ended and everything that we thought about how the world would change after COVID also changed. So I'd be super curious to hear kind of how do you think about hopping? Spot on. So this framework that I just described also derives from thinking a lot about hopping and thinking a lot about my decisions in hopping and also how the market sees like that.

48:27Right. So here's the ruthless, like fully honest, no filter view. It's like I invested in hopping. So I put together 100 % of hopping spree seed. Summer 2019, COVID was an award. Introducing to the lead at the seed, October, November 2019, COVID was an award. I could have sat the whole summer. Did you know Fauci? Did you know Fauci? Did you know something inside? So that's exactly what I was going to say. It's like I could have sat the whole summer trying to size the market and I would have never thought about COVID, right? Now, while Hopin was increasing, you know, and like Accel joining and Norsen and IVP and General Catalyst and A16Z and Altimer and basically the who's who of like venture, packed in and got it to 7 billion plus, my pre-seek decision was the best, you know, decision in the whole wide world.

49:18And then obviously, to your point, COVID ended. There were many things that went down and Hopin ended up being not a good outcome. Now, does that change the pre-seed decision? Because the information I made that decision with was what I did, right? And I also actually, and I think a lot about this is, and I'm very open about it, Hopin's pre-seed was a great investment decision because it was an exceptional founder who proved to like, you know, regardless of what like has come down, to take a company from zero to 7.75 billion in valuation and not get like just sacked by that tsunami, me, that company was six months old.

49:57So yes, COVID was a wave, but like you had to ride the wave, right? And you had to build product and sell product and raise money to do that. So there's no question at Preseed, it was an exceptional investment. Now it was a really bad Series C, Series D investment. And so what I say is, what did I get right? I got right that there was like, this founder was like exceptional, right? And what did I got wrong that I didn't sell at seriously, at seriously, right? And so this is the key idea because if I only look at the output and make hopping a bad pre-seed investment, I also don't learn because it was a good pre-seed investment.

50:33It was a bad seriously investment. And so I think that that is how I actually sort of thought a lot about this framework that I explained theoretically. Hopping is the best example of that. How do you judge, like when you make a bad decision, even in the moment, right, or the information you have, it's sometimes easier to be like, well, I just didn't do this research correctly, or I missed this data point, or I fell in love with the founder or whatever. How do you adopt that same self-criticism when it's inaction? You didn't sell. Okay. What do I point to that caused me to not sell or to not exit or to not do something rather than to do something?

51:12I didn't even think about it, which is the problem of the European mindset, back in my mindset as well, that we were, and I think Europe got very sophisticated in understanding that venture is a business of access and that you need to be in the best companies in order to stand a chance. And therefore, we got very good at competing for investing into companies. But this mindset of DPI is a new thing. Like, we sort of didn't think that this business was about making money. We thought it was about being in the best companies, but not about making money, right? So the reality and why it was a sort of bad decision is I didn't even think about it.

51:49Like, we obviously were in the middle of collective delusion in 2021. And like, you know, everything was going to IPO and stuff. But realistically, I didn't have the mental mindset and framework to actually think about even selling. And so that has been a huge learning. And it has informed a lot of Cocoa's strategy, like, going forward. But the reality is it was a bad decision. And this is I didn't even think about it. This was not a Cocoa investment, am I right? It was an angel investment. It was years before Cocoa. It was 2019. So because I was just about to ask you, this is where I think where I like love Team Isomer so much, Joe and Chris, like because they've been around, they've seen it all.

52:31And my feeling, and that's also what I hear from their managers, they do flag and they did in the 21s flag. Like, guys, it's a good idea to take chips off the table. Like the LP perspective on this. I do think it's one of those roles where, because especially as a solo GP, you're, again, back to the killer framework. You're a killer, Carmen. You're going out there. You're playing the game in the arena. You're doing it incredibly well. You have so many great properties that I would, and you and Anthony, I have 100%. I would have backed both of you back then. We were a bit late to the show and all that.

53:10But you're incredible. And I could see that, right? And LPs should continue backing new managers coming to market that come with all their power and might. And we know as LPs, they're also not 45 and have been here for three cycles. And that's where I think the LPs should step in with their knowledge in the LPAC and just in the WhatsApp groups and so on. and say, remember to, and so on. Have you seen that, Carmen and Evan? Yeah. Do you do that? Do you see others do that? And Carmen, I'll let you go first, of course. So Cocoa is an engine investment. Was an engine investment. Sorry, Cocoa was an engine investment.

53:53And so like that, that didn't play. But this is something that I tell to LPs and why, by the way, in Cocoa too, I've spent a lot of work in trying to get the right LPs is that I know the power of Cocoa. Like I see it. What I do not know, because I don't have the perspective of time and I don't have the perspective of having seen many top fans perform across vintages, is what can come back and bite me. And I actually asked this question, first time I met Evan, I think Evan at Pimlico Fresh, I did ask you, it's like, what can go wrong that I'm not seeing? Like I, and I think LP is like, And this is why you want a good LP base.

54:34Why they say like money is not the same money, right? I actually, I know now why your LPs didn't say anything. Because they were afraid you're just going to go right off to Bahamas and never come back. Have you thought about selling Hopin at$5 billion? Oh, wait. You're making a point. You're making a point. My husband sometimes like laughs about the fact that, you know, we never sold and the whole thing. And he's also pissed that I didn't give him an allocation. At least he could be in Bahamas. But I actually tell him always this. I was like, I don't think, and this goes back more to human nature.

55:13And if I would have made that money, I'm not sure. Like, cocoa would be a reality. And I'm not sure that I would be fighting the same way. And not because I wouldn't have the same passion, but because, you know, like you make these amounts of money. And by the way, this is another problem with venture and age in venture. And the thing is, and you're not in Luton at 4 a.m. sending emails and speaking to everyone who's still awake in Philadelphia. And, you know, if you have huge amounts of money in your bank account, like the hassle, human nature gets comfortable, like by definition. And so I'm actually grateful to have this chip in the shoulder because you bet it drives me.

55:49That's a very positive spin on that situation. I'm an optimist. I have to be. Yeah, this looks at me, my husband. I mean, I'm not sure I buy into this. But I'm an investor. I need to keep optimist. Sometimes we tell the stories even to ourselves that we have to hear. Totally. Yeah, no, no. It's a good spin. I'm glad that you're able to put a positive spin on it. Because I don't know that I would be so positive about this situation. No, Cocoa is literally the best thing that has happened. And like, and I, anything that like sort of took me to cocoa, I'm grateful for. And I, I, I, yeah, it's just, hopping is a big part in me having cocoa.

56:31And honestly, Carmen, I think that even if you had sold at the best time and you got super rich, you would have spent two months or whatever on the, in the Bahamas and then you'd be back out of the building. I like the Bahamas so much, but that's okay. I think we're all driven enough to, to not stop just because. Don't kill my argument. Don't kill my argument. Sorry about that. Evan, the LPAC's role, the LP's role in helping managers that haven't been around forever, or just in general, helping managers in the places where they're maybe not the most sophisticated. What's your view? Also, when do you underwrite a manager where you know that they're blind sides?

57:18The LP's role is complicated, right? Because I think some of it is dependent on how sophisticated the LPs actually are. Some of it is dependent on how much they actually want to be involved, right? You can have very sophisticated LPs that run very sophisticated diligence processes, but then they don't necessarily have a team that wants to support those funds post-investment. And then it also depends on the GP in that some GPs, a lot of GPs in fairness, sort of view LPACs as like the reward you get for writing the largest tickets. Other GPs, I think, view it as an actual source of advice where they can get advice from LPs without having to go to all 50 LPs.

57:57You know, I do think it's a little bit idiosyncratic, right? It does depend on your particular LP base. And it depends on, you know, the manager and sort of how they that dynamic. But in general, right, I think that I think that GPs, they do, I think, given sort of just industry custom needs to reward sort of like their largest couple of investors with LPAC seeds. But I think they should then say, okay, now are there one, two, three other LPs who maybe didn't write the largest checks and are helpful or sophisticated and can actually be valuable here as a sort of a formal voice on the LPAC. And so I think maybe there's some improvements to be had there where you do like a combination of your anchor investors and then maybe, you know, your most helpful LPs to the extent that those are different.

58:42And so I think there's some work there. But even if you're not on the LPAC, right, I think you have a responsibility or you should feel you have a responsibility as an LP to be actively engaged with the GP. Now, that doesn't mean that they need to hear your opinion on everything, right? I mean, you need to save your bullets for when it's important. But I do think that when you feel like this is a real existential moment for the fund, or this is something that, you know, the GP has just not had the reps, you know, it's actually, you know, have seen before, I think it is prudent, and it is worthwhile to step up and say, hey, you know, I just want to point this out, you're the GP, you're you make the decision, right?

59:22I have no ability to force you to do anything. But I would be remiss if I didn't bring this up to you and say, hey, have you considered this? Or we thought about this. And so I think, again, you need to save your bullets. You need to be smart about it. But I think as an LP, you have an obligation or you should feel like you have an obligation to speak up when there's something that's a serious potential issue for the fund. It's super welcome. I think being a GP is a pretty lonely place. And if you have people who understand the market, who understand the model, who believe in you and can actually be that you know a trusted confidant who has skin in the game and context and and can help you i mean that like a good l pack whatever format by the way like where it is like that is gotten because it is a very lonely place and to your point early and just like we're doing many things for the first time and this is actually a key point i think that we all have been trained as investors right but we haven't been trained as fund managers and it's a different thing and it's different skills different challenges and and so like um having lps that you can go to and you can like confide in learn from um is is like a gift and actually i was thinking as we were speaking right now and all these points around lp assessment and and fundraising i do a lot of work and for like trying to lower the bar for emerging managers.

1:00:57And I think that some companies like Angelis, Carda, like they've done an amazing job in simplifying, bringing down the cost and simplifying the setup of a fund. But you still have all these things like raising a fund and like managing a fund. And so I was thinking, and maybe Evan can share something, it's like all this discussion that we have, like what does it actually mean? Not only for GPs who are in the arena right now, But for any investor that knows they're good investors and they're maybe in somebody else's fund or in big structures and are potentially considering building their own vehicle to invest themselves, what does this all mean to them?

1:01:36Yeah, I think it's a great point, Norman. I mean, we spend a lot of time, obviously, with emerging managers and smaller funds. And something you realize is that the job of being an investor is very different than the job of being a fund manager. One of them is a lot more fun and it's the one you want to be doing. and the other one can kill your fund. I can certify that. Yeah, and it takes up a tremendous amount of time, right? It's really, it's its own job. And it frankly takes up more time in a lot of cases than the investing job. And so I think to Carmen's point, how do we improve that? How do we make that experience better for people?

1:02:08To improve the ecosystem generally, whether it's in Europe or in the US, how do we find ways for people who want to raise a fund or are thinking about leaving their current fund to be able to, you know, go out and focus on investing, which is what most of them want to be doing, not on management, you know, how do we make that happen? And so, you know, I think the Carmen's point, you know, some of it is people like us being involved in the emerging ecosystem, you know, broadly, but, you know, my door is always open to, you know, people who are thinking about launching or thinking about leaving or think that maybe they'd be a better investor in some other structure.

1:02:40You know, I've had lots of confidential conversations with people, you know, I would love to do that in the future. And I think that's also helpful, right? It's helping people understand what is it actually like from the LP perspective, you know, for you as a GP who wants to go out and raise a fund, what does that look like? What are the hard parts? How can we make that easier? Or what are the ways that, you know, that becomes more viable? But I think it's really, really challenging for a lot of people. And that is one of the things in the European ecosystem that's tough is that right now it's really hard to raise a fund because the fundraising environment is tough, but it's also really hard to raise a fund because, you know, the fund management piece is something that people or trained as investors are not necessarily prepared to deal with.

1:03:16And that is a barrier for sure. And so it's something that's also, I think, a broader issue. And there are LPs that are able to be helpful in those situations if you as a GP or a prospective future GP are willing to use those as resources and actually tap them for information. I am always a bit, I find it a bit difficult, this whole democratization of access to venture or making it easier, quote unquote, to become a fund manager because it is a super elite industry. The best performing people in venture are super elite. And then we're all talking about democratizing access to it. And I'm like, I almost...

1:03:57Oh, to be clear, I'm not talking about democratizing access in the way that phrase is commonly used. I just think there is a, the ratio of like managers that European could, that Europe could handle as a continent or as a venture environment versus the number that exists, I think is off right now. I don't think that means that everybody who thinks that they are like unhappy being an analyst somewhere should go out and raise a fund, right? To be clear, right? I'm not saying like we should just make it extremely like easy to do that, right? It should still be hard. But the question is, is it hard because convincing people that your thesis makes sense and that you're the right person to execute on that thesis is hard?

1:04:39Or is it hard because we put up a lot of unnecessary fund management roadblocks, which are a problem, right? So I think you still need to be able to go out and sell your thesis and sell yourself as a person and sell yourself as an investor. I am not saying we should eliminate that. But if you have unnecessary barriers that are taking people who otherwise could be improving the European ecosystem and do have good insight and good access, and you're instead precluding them from starting a fund because being a fund manager is just not really fun, that's a different thing. I think that's two things.

1:05:14And I actually, Andrea, thinks you're like, we're all saying the same because probably democratizing is not the right word. It's also, I think it's two things. It's one understanding. I am ruthless with people who want to start funds and come to me and like, and say, oh yeah, 5 million. I'm like, never going to work. Like, just run the numbers. Like you can't run a$5 million fund. It just doesn't work. So like in that for sure. And, and, and also what's your product? Like some, you know, they have this very brutal phase. Why do you need to exist? kind of concept so i but i think there's a difference between that and understanding and i think one of the biggest challenges of today is we don't know like we just spent like two episodes trying to decode how lps think and you're talking to like um we've been doing it for almost four years and i still there's so many things that are mind-boggling to me like and and so like i think lowering the barrier in terms of understanding in terms of knowing like how many structures do you when you set up a fund, you know, and like how is actually the fee schedule and like what are the costs and like, and then decide with like knowledge, of course, I think that's one.

1:06:19And then also the execution bit is interesting. Thinking about a better ecosystem, I think a lot of people get into the rhythm that this is an operational business and you get into that because there's so many ops because we obviously are managing third party money and that comes with like regulatory constraints because you're managing multiple structures. Like a fund is not just like, you know, you managing the money. It's like multiple structures. And there's so much complexity with it. And there's so many legal documents and there's so many management accounts of all these entities. And so we get sucked into these ops that actually are necessary to run the fund and stay out of prison, but whether or not what's going to make the best fund, right?

1:07:05And that's not why any of us does it. But this is a business of, we're saying, JQ of judgment as well. But judgment requires space. And you need space to think and process. And so I think that there's that part on execution that also can be solved or helped to raise the bar. And that will raise the bar because we'll have better investors if people spend more time thinking, right, than if people, like, churn through, like, ops. And so I think there's these two things to consider. It's, like, the understanding, the visibility, which, like, we have very, it's a lot of how does this? actually work and that's your mission and why you started EUBC.

1:07:41And then there's the actual execution. Look, this is not an operational business, but it requires operations. How do we solve the common truth? And that's why Carmen works from the tarmac at Luton at 4 a.m. because nobody else is there and she has the space to think with nobody else around her. I know. Anybody go to Luton. It's the best, you know, like space to think from the terminal. Best advice ever given on the European Easy podcast. So we are now up on more than an hour of recording and the time slot at which we have to end. Guys, I want to spring a question on you before we close. We've now done two episodes of this, just riffing almost on the back of a script that no one can follow.

1:08:23And we have definitely not followed. I know, I feel like we didn't even cover anything. We have like so many things to cover. I feel like I want to ask you, are you up for doing another one in a month's time? So we kind of keep the cadence. We are and we will be better. Yes, we have tons. I have so many questions forever and on things that I still want to learn about LPs. I think we have come to an agreement that we'll do another one. Wait, but before you hit the gong and end this, I do just want to say I got a really good feedback from the first episode and a lot of people have asked really good questions.

1:08:52So for people who are interested in what we have to say, if there are specific things you want us to touch on, you know how to reach at least one or probably all the three of us. And we would definitely appreciate questions. and we'll take them and we'll bring them to the next one. Yeah, I think it's super helpful. We'll eventually get to them. There were some today. Everybody with questions we'll send them here. Some got answers, some will get answers. Yeah, that's the deal. I love this. This was like, it maybe sounded like we got very quickly to an agreement that we're going to do it. But it was really impromptu and I just asked.

1:09:28Thank you for joining me today and for committing to joining me another day. Thanks for having us back. This would have been a job. Tear down this wall. It's more than just an ally. This is a union of values. Let's start acting.