Good morning 👋
He’s one of the most well-liked emerging out there, and he’s built up a brand as one of the best early-stage infrastructure investors.
I wanted to learn more about reasons to be bullish on developer tools, advantages and disadvantages of being a solo GP, and the right time to approach institutional capital.
Here’s what he had to say …
P.S. 🏄 I’m thinking about hosting a mastermind / retreat / meetup for a very select few of our readers.
Hosted somewhere cool to sweeten the offer (Costa Rica, Miami, Orange County, Charleston, etc.)
Small groups of 5-10 to make it exclusive
Mix of work conversation + play to build real relationships with others that go
Private chef and food included
Optional activities (tennis, golf, surfing, yoga, etc.)
Would you pay to go to something like this if we hosted it?
Tim Chen
GP @ Essence
Many pre-seed founders don’t look like CEOs (yet). That’s why most other “early-stage” firms pass on founders with technical backgrounds.
Infrastructure is a theme; dev tools is a subtheme. A lot of others make the mistake of labeling infrastructure as a subcategory; it’s actually MUCH larger than that.
Infrastructure is anything that people can build on top of. If you become an economy or system of record, you are building core infrastructure.
Continually evolving the role of developer makes developer tools a more interesting category. Developers are not being replaced, and their role is evolving to solve more specialized problems. A rising tide lifts all boats.
People start funds with different visions of what the fund should be. This is partially the reason that is increasingly rare for partnerships to last over multiple funds. Solo GPs have one person deciding which gives clarity and consensus.
It’s incredibly hard for multi-GP funds to nail their branding and look different than every other fund. The more cooks
AI being able to replace engineers / dev ops is a far-fetched goal. There is so much nuance to create a product capable of replacing a good engineer, and that’s before marketing and sales where you have to get people to trust and believe it.
Institutional capital lives in their own country. Imagine your friends - everything you know, they know as well.
VCs see you as a scout in quality; institutions see none of this. They use other ways to assess whether they have any interest in joining you.
The best way to break into the institutional world is by NOT trying hard. Reputation of the fund creeps into institutional circles.
Most fund managers tend to try to raise too much to start. Tim worked a part-time job while he deployed his $1m fund I.
Reputation compounds. It took Tim three months to raise fund III. He doesn’t even have a deck for fund IV.
First-time founders especially need a less is more approach. Having too many goals / KPIs means that you have none.
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- Clay
