Good morning 👋
At time of writing, I’m on coffee cup #4, and I’ve typed ~2,500 words today.
Laptop class PEDs. Switching gears.
Pear announced a new emerging manager residency program a few weeks back, and we’re here to give our thoughts on why we love the idea.
Let’s get into it.
P.S. 💰 Are you a full-time investor AND do you want to get paid more?
Today’s highlights
Pear’s EM residency program (why we love it)
Perplexity is looking to cash in
Growth channels that actually work
What real wealth is built on
TOP
Pear’s Playbook: The EM residency 🏠
A few weeks back, Pear announced a new emerging manager residency as part of their latest fundraise.
The Pear Emerging Manager in Residence program will bring pre-seed and seed-stage funds into the firm's orbit, and it will offer a $250,000 investment, access to their accelerator, and LP introductions as an LP to these funds. It’s also worth noting that the capital for this program is part of the flagship fund, and Pear did not decide to raise a separate dedicated fund for their emerging manager practice.
They are not the first traditional fund to have a dedicated strategy to go towards backing the next era of fund managers (Bain is the most notable fund to pioneer this strategy), but the headline still caught our eye.
Here’s why we think it matters and some secondary effects we think this program will bring.
Why it matters: Venture is cyclical, and those who have been around long enough know this.
When rates are down, venture gets hot; when rates go up and bond markets become more attractive, it becomes a LOT harder to bring in new LP dollars for venture funds.
From our experience, however, most of the LPs who back emerging managers could care less about bond markets, and they are only concerned about playing longer games with the right players in the right industry.
Despite the uncertainty in the short-term, that describes the appeal of emerging manager investing, and that’s the bet that Pear is playing with this news.
What happens next: Series A funds have a massive opportunity to launch their own emerging manager practices, and we expect a few savvy funds with larger AUMs to follow Pear and Bain’s lead.
Here’s our thinking:
Many of these larger funds have been forced to invest downstream due to ownership requirements
Their pre-seed / seed pipelines are dry
They still need to see these companies prior to their inflection points if they a relatively good entry price
Instead of hiring a dedicated team to run pre-seed and seed investing, they can LP small checks into a select group of emerging managers, get very curated deal flow and other informational advantages through them, and get first looks at the breakout companies from their portfolios
COMMUNITY
VC-Cheat-Codes-as-a-Service (VCCaaS)
If you’re serious about making a name for yourself in venture, you’re going to need some help.
That’s why we built this business (especially our private investor community).
It’s application-only for full-time investors so it remains high signal, and approved members get access to our full VC playbook we’ve built over the past four years.
That includes:
The full VC resource library (Basic members)
Thousands of investment memos (Premium members)
Member directory (Premium members)
Private Slack group (Premium members)
Member matchmaking (Premium members)
LINKS
🥸 LLMs for Dummies: Digital Native breaks it down for us
🔑 Your Boring Data is Actually Marketing Gold (Here’s How to Mine It): Marketing Ideas shares 7 perfect examples of generating buzz by leveraging internal data
👷 What’s the Second Job of a Startup CEO?: Successful startups go through three broad phases as they scale and a startup CEO’s job changes dramatically in each phase
📗 The Pocket Guide of Essential YC Advice: Ben Lang posts YC’s essential advice for startups
📈 Growth Channels—Which Paid and Organic Channels Should You Pursue?: Julian Shapiro walks through identifying the customer acquisition channels most likely to work for your startup
TWEET
HEADLINES
Perplexity is reportedly looking to fundraise at an $8B valuation (TechCrunch)
As fintech frost bites, an a16z-backed neobank faces a down round (Pitchbook)
Angel Investing Isn’t What It Used to Be (WSJ)
AI Agents Can Do More Than Answer Queries. That Raises a Few Questions. (WSJ)
MEME
RECS
Big Desk Energy: Startup insights, stories, and vibes sent to your inbox every Tuesday
Creator Spotlight: Your guide to building an audience with social media and newsletters with creator deep-dives every Friday.
POLL
Do you expect more funds to create their own in-house emerging manager programs?
Thanks for reading this far and giving us a little bit of your attention this week.
Feel free to unsubscribe whenever this stops becoming valuable to you.
- Clay
RESULTS
Here are the results from our poll question in yesterday’s piece:
Are you currently investing out of an opportunity fund?
🟨🟨🟨🟨⬜️⬜️ Yes - and we have plenty of companies to put capital to work behind (5)
⬜️⬜️⬜️⬜️⬜️⬜️ Yes - but we can't put the money to work (0)
🟩🟩🟩🟩🟩🟩 No (6)
🟨🟨🟨🟨⬜️⬜️ Don't care - show results (5)
16 Votes
