20VC: Why Portfolio Construction Is Inefficient, Why The Only Thing That Matters In Venture Is Pricing & The Future of Venture; Bundled or Unbundled with Zach Coelius
Zach Coelius is Managing Partner @ Coelius Capital and in his own words, “a pretty eclectic investor who loves to see just about any deal”. To date, Zach has made investments in the likes of mParticle, Cruise Automation, Branch Metrics, SkySafe, ProsperWorks and more. In addition, Zach is or has been an advisor to LiveRamp, Hellosign, Art19, Loom.ai, Survata and StartGrid just to name a few. Prior to his investing career, Zach was CEO @ Triggit, an online adtech company which he raised over $18m for and was ultimately acquired in 2015. If that was not enough, Zach is also a Senior Advisor to McKinsey & Co.
In Today’s Episode You Will Learn:
1.) How Zach made his way from the world of operating and adtech to investing and advising startups today? When does Zach feel the ecosystem really started to take him seriously as an investor? What did Zach learn from being in the adtech space that he has applied to his investing today?
2.) The Future of Venture: Naval has previously said we will see “the unbundling of VC”, does Zach agree with this view? Why does Zach feel we are seeing both the bundling and the unbundling of venture platforms? What unique challenges does this pose for both sides of the equation? How should entrepreneurs evaluate the different options, bundled vs unbundled?
3.) Portfolio Construction: Why does Zach believe that portfolio construction is fundamentally inefficient? What 2 core areas of venture does portfolio construction cause issues for? When does Zach view to be the ideal insertion point if optimising for absolute returns and not following portfolio construction?
4.) Reserve Allocation and Pricing: Why does Zach think that the current mechanism for reserve allocation is broken? Why is it a fundamentally bias process? What does the optimal investment decision-making process look like to Zach? How does Zach think about the asymmetric information that is gained from being early into a company? How can investors really use it to their advantage? Why do they not?
5.) Why does Zach compare being an entrepreneur to being a gladiator and a rocketship? Why does Alex believe the transition from space articulation to product articulation is the most important thing an entrepreneur can do? What is the true sign of this transition in customer interactions? Where do many entrepreneurs make mistakes here?
Items Mentioned In Today’s Show:
Zach’s Fave Book: The Snowball: Warren Buffett and the Business of Life
Zach’s Most Recent Investment: Mud\Wtr