In this episode of Deeply Intents, I chat with Dan Gray from Credistick. We cover a ton of ground on what venture capital actually is, how it works, and where the space is headed. We kick off by breaking down the basics of VC and the ripple effects of the low interest rate environment after the financial crisis, then move into megafund strategies (sometimes called smart beta). From there, we dig into VC compensation, fund performance metrics and incentives, and how exits actually work. We also explore how secondary transactions are changing exit liquidity for investors and employees, plus equity crowdfunding as a way to let everyday people get in on seed-stage deals. Things get really interesting when Dan explains how memes influence capital flows and why megafund strategies work so well. We wrap up by talking about the challenges facing new emerging managers and some compelling AI-related investment theses.

Timestamps

(00:00) – Finding the missing puzzle piece
(02:29) – VC is not competitive
(05:09) – What is venture capital?
(08:14) – Consequences of low interest rates
(11:49) – Concentrated bets
(16:29) – Megafund strategy – smart beta
(19:04) – VC compensation
(22:34) – Fund performance metrics and incentives
(26:49) – Fragile proposition for founders
(29:50) – One pivot is better than none
(33:17) – VC exits
(36:09) – Secondary transactions
(42:00) – Retail exit liquidity
(45:45) – Equity crowd funding
(51:14) – Memes influence the flow of capital
(55:16) – Megafund strategy is so good
(1:00:11) – Government LPs can help smaller funds
(1:02:05) – Emerging fund manager tactics
(1:05:22) – Interesting theses connected to AI

Disclaimer
Nothing in this episode should be interpreted as financial, technical, or legal advice. The host does contract work for Heliax, a public goods laboratory, focusing on Anoma.