"Turpentine VC" | Venture Capital and Investing

• E86: Inside Mischief VC's Evolution with Zach Perret and Lauren Farleigh

  In this episode of Turpentine VC, Erik Torenberg interviews Lauren Farleigh and Zach Perret from Mischief VC, discussing their experiences as founders and how they leveraged those to build their venture firm. —  📰 Be notified early when Turpentine drops new publication: https://www.turpentine.co/exclusiveaccess   — SPONSORS: ☁️ Oracle Cloud Infrastructure (OCI) is a single platform for your infrastructure, database, application development, and AI needs. OCI has four to eight times the bandwidth of other clouds and offers one consistent price. Oracle is offering to cut your cloud bill in half. See if your company qualifies at https://oracle.com/turpentine  💥 Head to Squad to access global engineering without the headache and at a fraction of the cost: head to https://choosesquad.com/ and mention “Turpentine” to skip the waitlist. — LINKS: Mischief VC: https://www.mischief.vc/ — X / TWITTER: @zachperret @LFarleigh @TurpentineVC — HIGHLIGHTS FROM THE EPISODE: Lauren Farleigh and Zach Perret from Mischief VC leverage their founder experiences (Zach is CEO of Plaid, Lauren founded Dote  Shopping) to build a differentiated VC firm. Mischief started with a $30M fund one and grew to an $80M fund two, focusing on early-stage investments. Both started angel investing in 2017 and saw a market opportunity to institutionalize their approach based on founder-to-founder support. They identified a gap: few VCs have true zero-to-one, finding product-market fit experience. Zach shares how early angel investors who were former founders helped Plaid at critical moments, inspiring Mischief's model. They're a generalist fund investing in software companies, more founder-driven than thesis-driven, with $1-4M checks. Their approach is hyper people-driven: they follow the best people in their network rather than doing outbound sourcing. They host structured dinners with 10-12 people, asking attendees to recommend others, effectively building their network. Send quarterly updates to portfolio companies like a monthly company update, keeping founders engaged. Transitioned from participating to leading rounds after a portfolio founder wished they had led his successful round. They track potential founders before they start companies, building long-term relationships. Play a "ground game" focused on delivering results rather than being loud on social media. Fund two fundraising was harder than fund one due to market conditions and larger size. Zach is part-time at Mischief while running Plaid, focusing on sourcing and unique situations where he has relevant experience. Having four GPs provides the right level of availability while allowing each to focus on their strengths. Fund two has primarily first check focus with aggressive recycling, avoiding follow-ons that dilute returns. Currently feel capital constrained with four GPs on $80M, planning careful growth while maintaining responsible investment practices. Focus on building training modules for common founder challenges like recruiting and sales, not on firm marketing. Most founders struggle with fear/indecision in cold sourcing rather than making mistakes; Zach advocates direct outreach.

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• a16z's Voice AI Investment Strategy

  This week on Turpentine VC, we are releasing an episode from The Cognitive Revolution, hosted by Nathan Labenz. Nathan sits down with Olivia Moore and Anish Acharya from Andreesen Horowitz to discuss the trends, investment strategies, and future potential of AI voice technology in both B2B and consumer sectors, exploring its implications for various industries including call centers, SMBs, and personalized AI companions. —  📰 Be notified early when Turpentine drops new publication: https://www.turpentine.co/exclusiveaccess   — RECOMMENDED PODCAST:  🎙️‪ The Cognitive Revolution The Cognitive Revolution is a podcast about AI where hosts Nathan Labenz and Erik Torenberg interview the builders on the edge of AI and explore the dramatic shift it will unlock over the next decades.  Spotify: https://open.spotify.com/show/6yHyok3M3BjqzR0VB5MSyk?si=7357ec31ac424043&nd=1&dlsi=060a53f1d7be47ad  Apple: https://podcasts.apple.com/us/podcast/the-cognitive-revolution-ai-builders-researchers-and/id1669813431  Youtube: https://www.youtube.com/@CognitiveRevolutionPodcast — SPONSORS: ☁️ Oracle Cloud Infrastructure (OCI) is a single platform for your infrastructure, database, application development, and AI needs. OCI has four to eight times the bandwidth of other clouds and offers one consistent price. Oracle is offering to cut your cloud bill in half. See if your company qualifies at https://oracle.com/turpentine  💥 Head to Squad to access global engineering without the headache and at a fraction of the cost: head to https://choosesquad.com/ and mention “Turpentine” to skip the waitlist. — LINKS: The Cognitive Revolution Website: https://www.cognitiverevolution.ai/  a16z Website: https://a16z.com/  — X / TWITTER: @illscience @omooretweets @labenz @TurpentineVC — HIGHLIGHTS FROM THE EPISODE: Olivia Moore explains they track AI trends across platforms like Twitter, Instagram, TikTok, and YouTube, with YouTube being surprisingly important for AI tool adoption. They emphasize the importance of actually using AI products hands-on to build intuition about what works. Consumer demand signals (like people trying to make ChatGPT act as a therapist) help identify opportunities for standalone focused products. Anish highlights that voice is the original form of human communication but has been largely unaddressed by technology until now. Many voice AI startups gaining traction are B2B-focused, particularly for call centers and customer service. Current voice AI has largely solved basic latency and understandability issues, but still needs improvement in emotionality, interruption handling, and conversation flow. The most successful voice AI companies are specializing in specific verticals rather than offering generic solutions. Happy Robot (freight broker voice AI) demonstrates how AI can handle complex tasks like negotiation by introducing human-like elements such as "checking with a supervisor." AI voice agents typically disclose they are AI, but users quickly adapt to conversational patterns regardless. AI voice agents can offer advantages over human agents, including consistent friendliness, superhuman patience, and zero wait times. For SMBs, vertical-specific voice solutions are emerging for restaurants, spas, home services, and other industries. In the creator economy, tools like ElevenLabs offer voice cloning and creation, while platforms like Delphi enable interactive digital clones. For children, AI companions could serve as positive social models, tutors, and emotional supports. Companion AI usage has surprised investors, with more demand for "AI boyfriends" than "AI girlfriends" and usage resembling interactive fiction more than expected. Voice AI is expected to eventually become a modality feature on every product and device, serving as an "emotional bicycle" that extends our emotional capabilities.

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• E84: How Accel Captures Companies Outside Traditional VC Reach with Andrew Braccia

  Andrew Braccia, partner at Accel for nearly two decades, sits down with Erik Torenberg to discuss the firm's evolution from Silicon Valley early-stage investor to global, multi-stage powerhouse. Braccia explains Accel's two major strategic shifts: global expansion with local teams in Europe, India, and beyond; and the launch of their growth fund in 2008 targeting bootstrapped companies like Atlassian, Qualtrics, and Squarespace. Braccia reflects on lessons from his journey from Yahoo to venture capital, emphasizing the importance of "wiping your mind clear" of past experiences that might cloud judgment of new opportunities. The conversation provides rare insight into how Accel maintains operational excellence at global scale while preserving their early-stage venture DNA in an increasingly competitive landscape. —  📰 Be notified early when Turpentine drops new publication: https://www.turpentine.co/exclusiveaccess   — SPONSORS: ☁️ Oracle Cloud Infrastructure (OCI) is a single platform for your infrastructure, database, application development, and AI needs. OCI has four to eight times the bandwidth of other clouds and offers one consistent price. Oracle is offering to cut your cloud bill in half. See if your company qualifies at https://oracle.com/turpentine 💥 Head to Squad to access global engineering without the headache and at a fraction of the cost: head to https://choosesquad.com/  and mention “Turpentine” to skip the waitlist. — LINKS: AcceL: https://www.accel.com/  The Slack Origin Story: https://techcrunch.com/2019/05/30/the-slack-origin-story/ — X / TWITTER: @Accel @eriktorenberg @TurpentineVC — HIGHLIGHTS FROM THE EPISODE: Accel started over 40 years ago focusing on early-stage venture capital (seed, Series A) and maintains this core business today. The firm expanded globally to Europe, Israel, India, and other markets with separate teams and funds to identify defining technology companies worldwide. In 2008, Accel launched growth funds to invest in bootstrapped technology companies that didn't fit traditional Series A parameters. Notable growth investments included Atlassian, Qualtrics, Squarespace, and CrowdStrike, companies that might not have intersected with Accel otherwise. Global expansion and multi-stage investing introduced communication and coordination challenges that require strong partnerships to overcome. Andrew Braccia grew up in the Bay Area, studied business at University of Arizona, and joined Yahoo in 1998 when the internet was still emerging. Working at Yahoo gave Andrew broad exposure to various internet segments and connected him with talented people who later became successful entrepreneurs. Today's AI investment landscape has similarities to 1998-99, with high capital requirements and significant burn rates. In AI, Accel has invested more in infrastructure and application layers than foundational models, including companies like Scale AI and Decagon. Venture capital is becoming a permanent asset class that will continue to grow in capital allocation across various firm structures. Increasing competition in venture capital makes operational excellence and firm culture increasingly critical for long-term success. The biggest lesson Andrew learned is to avoid letting past experiences create "false negatives" that prevent seeing new opportunities. Another key lesson is not to fear failure and to take more shots with great entrepreneurs. The Squarespace investment in 2009-2010 exemplifies Accel's entrepreneur-focused approach and ability to support companies through multiple stages. The biggest mistake in venture capital is missing an opportunity because you didn't know it existed. Failures often stem from not moving quickly enough, lacking decisiveness, or carrying intellectual baggage about certain categories.

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  48:52
• E83: Chad Byers on Why Susa is a Purpose-Built Seed Specialist [Classic Interview]

  This week on Turpentine VC, we’re sharing Erik Torenberg’s interview with Susa Venture’s Chad Byers, which originally aired in September 2023. Chad discusses the firm's journey, their fund structures, and their vision for specialized seed investing, emphasizing the importance of focus, discipline, and adapting to market dynamics. —  📰 Be notified early when Turpentine drops new publication: https://www.turpentine.co/exclusiveaccess   🙏 Help shape our show by taking our quick listener survey at https://bit.ly/TurpentinePulse  — SPONSORS: ☁️Oracle Cloud Infrastructure (OCI) is a single platform for your infrastructure, database, application development, and AI needs. OCI has four to eight times the bandwidth of other clouds and offers one consistent price. Oracle is offering to cut your cloud bill in half. See if your company qualifies at oracle.com/turpentine  💥 Head to Squad to access global engineering without the headache and at a fraction of the cost: head to https://choosesquad.com/  and mention “Turpentine” to skip the waitlist. — LINKS: Fund V Announcement: https://www.linkedin.com/posts/chadabyers_dear-founders-were-excited-to-announce-activity-7307890222753554432-JOLt — X / TWITTER: @chadbyers @SusaVentures @eriktorenberg @TurpentineVC — HIGHLIGHTS FROM THE EPISODE: Susa Ventures evolved from a $25M fund in 2013 to multiple funds under separate brands with distinct investment focuses. The firm is purposely reorganizing into three distinct branded strategies for better founder experience and clarity. Susa maintains fund size discipline, deliberately staying under $200M for seed investments to maintain quality. They focus on five specific categories: FinTech, Healthcare, Logistics, B2B SaaS, and Infrastructure. Their investment philosophy centers on concentrated bets with 35 companies per fund and higher ownership stakes. Notable successes include Robinhood (which was passed on by 110 firms) and Flexport from their first fund. The best portfolio companies typically needed the least help from investors. Value-add strategy focuses on being helpful during "crux moments" rather than constant interference. Investors should provide frameworks and historical data instead of specific operational advice. Non-"hot" deals often produce better returns due to lower entry prices. Specialist investors are increasingly winning over generalists in the venture landscape. Chad predicts venture capital is bifurcating into large multi-stage asset managers and specialized firms. The firm aims to "maximize value creation per dollar" rather than maximize assets under management. Susa's goal is to become the #1 seed firm over the next decade through specialization. Price discipline and high ownership focus remain central to their strategy going forward. Venture capital is becoming more like other asset classes with potentially lower overall returns. The industry's power law is intensifying with the top 5% of firms generating most returns. There's increasing competition from former operators now working in venture capital.

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  58:20
• E82: Fundraising in Bear Markets: How Nichole Wischoff Closed $50M [How I Invest]

  This week on Turpentine VC, we’re dropping an episode from David Weisburd’s “How I Invest Podcast” with Nichole Wischoff of Wischoff Ventures. Nichole discusses her impressive $50 million fundraise, closed in a bear  market, sharing her strategy, brand-building efforts, and tips on leveraging social media to attract investors. —  📰 Be notified early when Turpentine drops new publication: https://www.turpentine.co/exclusiveaccess   🙏 Help shape our show by taking our quick listener survey at https://bit.ly/TurpentinePulse   — RECOMMENDED PODCAST: 🎙️How I Invest with David Weisburd  Apple Podcasts: https://podcasts.apple.com/us/podcast/how-i-invest-with-david-weisburd/id1697772657  Spotify: https://open.spotify.com/show/2MHgyKMmJgznPI66MLxZfC YouTube:https://www.youtube.com/channel/UCncFI0XEvTu7k4er6BgVN9g — SPONSORS: ☁️ Oracle Cloud Infrastructure (OCI) is a single platform for your infrastructure, database, application development, and AI needs. OCI has four to eight times the bandwidth of other clouds and offers one consistent price. Oracle is offering to cut your cloud bill in half. See if your company qualifies at oracle.com/turpentine  💥 Head to Squad to access global engineering without the headache and at a fraction of the cost: head to https://choosesquad.com/  and mention “Turpentine” to skip the waitlist. — LINKS: Wischoff Ventures: https://www.wischoff.com/ — X / TWITTER: @NWischoff @DWeisburd @eriktorenberg @TurpentineVC — TIMESTAMPS: (00:00) Intro (00:35) Nichole Wischoff’s $50 million fundraise (01:46) Building a brand and distribution (02:50) The power of media in venture capital (05:21) Fundraising strategies and challenges (13:50) Sponsors: Oracle | Squad (17:01) Leveraging relationships and networks (22:39) Building a Twitter following (29:37) Conclusion and contact information — HIGHLIGHTS FROM THE EPISODE: Nichole Wischoff raised $50 million for her fund in five months during summer 2024's tough market. Her strategy focused on a first close of 50% by May and final close in August, creating momentum. Performance matters: her previous funds were top decile performers, providing essential credibility. $38.5M of the $50M came from just six LPs, with Sendona anchoring at $15M. Brand building through social media gave her the ability to "get on the phone with anyone" after two years. She got everyone in the data room simultaneously with a clear timeline, creating competitive pressure. After securing first close, she emailed everyone still in the pipeline to create urgency and force decisions. For social media success, she recommends authentic opinions and willingness to be wrong publicly. She narrowed relationships from 50 fund managers down to 8-10 truly trusted partners (the 80/20 rule). Always fundraise when you need capital, not based on market timing or what other GPs say.

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  34:06

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