E6: Steve Chasan | Head of Investments - Rothschild Foundation on how GPs Can Navigate the VC Reset

The 10X Capital Podcast

The 10X Capital Podcast is a podcast that interviews the world's leading institutional investors. Previous guests include The Ford Foundation, Northwestern University Endowment, CalPERS, Stepstone, and other top limited partners.

E6: Steve Chasan | Head of Investments - Rothschild Foundation on how GPs Can Navigate the VC Reset

E6 • Aug 21, 2023 • 29 mins

David Weisburd sits down with Steve Chasan, the Head of Investment at the Rothschild Foundation and for other philanthropic endowments led by Lord Jacob Rothschild. In this episode, they go deep into the LP mindset, covering the best practices he looks for in GPs and emerging managers, whether pricing discipline exists in VC, and describing the conversations LPs are having internally that GPs never get to hear. If you’re ready to level-up your startup or fund with AngelList, visit www.angellist.com/tlp to get started.

Key Points

VCs should maintain pricing discipline and not disregard historical prices just because they are aiming for high returns, as entry price significantly impacts fund performance.
LPs need to be wary of style drift and size increase in GPs, ensuring that the investment strategy aligns with the GP's expertise and track record to avoid principal-agent problems.
Emerging managers should be tenacious in fundraising, particularly targeting family offices which may have more flexibility and alignment with principal-agent interests than institutional LPs.

Speakers

Steve Chasan

Guest • 65%

David Weisburd

Host • 31%

Chapters

0:00	Episode preview
1:51	Steve’s evolution from philosophy to finance to the endowment side
2:51	Steve describes his approach and the challenges of being an LP at an endowment
4:13	Why is it that now is a good time to invest while people are having trouble fundraising?
5:41	Diversification and the Swensen approach, which many institutional investors follow
6:51	The principal-agent problem for LPs and GPs
9:22	What are some best practices that LPs look for in GPs, outside of returning 10x? And what should GPs avoid?
10:12	Style drift
12:56	What are some ways LPs can differentiate themselves in the market?
13:58	Steve’s LP perspective on co-investing
15:28	Does studying philosophy offer an investing advantage?
16:47	Sponsor: AngelList
17:52	Which things do VCs systematically get wrong?
20:50	Steve’s predictions for venture over the next 5-10 years
22:00	How can VCs prepare themselves for this reset
23:20	What technologies and sectors is Steve really interested in right now, with great upside.
25:51	Investing in AI
27:25	Advice and best practices for emerging managers

Transcript

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