E35: Ben Gallacher of Cannonball on "Value per Dollar Invested" and How it Predicts Fund Performance

10X Capital Podcast

The 10X Capital podcast interviews the world's premier institutional investors to deliver insights on how they manage their capital. Interview topics include investment decision frameworks, capital allocation strategies, GP/LP relationships and many more.

E35: Ben Gallacher of Cannonball on "Value per Dollar Invested" and How it Predicts Fund Performance

E35 • Jan 23, 2024 • 42 mins

Ben Gallacher sits down with David Weisburd to discuss venture capital, his journey as an LP, and the challenges emerging managers face. They discuss check sizes, diligence processes, and the impact of a GP leaving during an investment life cycle. They also cover the role of CFO/COO in GP operations and the importance of supporting emerging managers.

Key Points

Emerging managers should focus on maintaining a clear and consistent strategy that aligns with their stated objectives to build trust with LPs.
Family offices often face adverse selection when investing directly in companies, highlighting the importance of leveraging the networks and expertise of specialized fund managers.
A diversified approach to portfolio construction, with a preference for initial checks over heavy reserves, can help mitigate risks and ensure sustainable returns for emerging managers.

The 10X Capital Podcast is part of the Turpentine podcast network. Learn more: turpentine.co

Speakers

Ben Gallacher

Guest • 65%

David Weisburd

Host • 33%

Chapters

0:00	Introduction and guest welcome
1:06	Ben Gallacher's journey to becoming an LP
2:19	Evolving investment strategy and differences between private equity and venture capital
5:54	Compensation and incentives in private equity vs. venture capital
8:17	Time management and LP expectations for emerging managers
11:32	Key factors and due diligence process LPs consider in emerging managers
14:40	Sponsor: Bidav Insurance Group
17:03	Utilizing other LPs for due diligence and building relationships
20:17	Collaborative check writers and emerging manager strategy
22:12	Portfolio allocation: Concentration versus diversification
25:57	Follow-on investment strategies and signaling risk
30:15	Percentage of portfolio for follow-on investments and balancing alpha and smooth returns
35:44	Building a business versus building a fund and impact of a GP leaving
39:35	Importance of being close to the ground and values driving alpha
40:31	Closing remarks and contact information
41:53	Newsletter announcement powered by Carrier Labs

Transcript

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