Empowering Emerging Fund Managers

The Growing Need for Venture Fund Support

An increasing number of individuals are pursuing venture investing as a primary career path, yet many quickly find the undertaking more complex than anticipated. This trend has fueled the emergence of Oper8r, a venture-backed accelerator modeled after Y Combinator, specifically designed for new fund managers. Simultaneously, AngelList has gained prominence by streamlining fund administration processes for a service fee.

Plexo Capital Launches GPx: An Investor Education Program

Now, Plexo Capital, functioning as both a venture firm and a fund-of-funds investor, is introducing its own initiative aimed at educating investors. The program encompasses the numerous aspects of fund formation, capital acquisition, and asset management.

Comprehensive Educational Modules and Cohort-Based Learning

Dubbed GPx, the program boasts a substantial collection of freely available educational modules. These resources were created through contributions from prominent VCs and limited partners, including Charles Hudson from Precursor Ventures, Michael Seibel of Y Combinator, and Beezer Clarkson of Sapphire Ventures.

The program also incorporates a cohort structure, inviting a select group of emerging fund managers to engage in more focused collaboration with instructors, legal counsel, and industry specialists.

Funding and Objectives of the GPx Program

GPx operates as a not-for-profit venture, entirely funded by Alphabet (Plexo Capital’s primary investor), City National Bank, Practical VC, and the international law firm Gunderson Dettmer. Plexo Capital anticipates that this program will provide valuable insights into potential fund manager investments.

To gain further understanding, a recent conversation was held with firm founder Lo Toney. The following is an edited version of that discussion.

Lo Toney on the Program's Core Aims

TC: Could you elaborate on the primary goal of this program?

LT: Our main objective is to maximize value as a limited partner. Having previously worked at GV, I recognized the extensive resources available there. I didn’t have to dedicate time to administrative tasks, as dedicated finance, legal, and operations teams managed reporting and deal documentation. Furthermore, Alphabet’s exclusive LP status at GV eliminated the need for fundraising. Starting Plexo Capital revealed a significant learning curve.

Benefits for Plexo Capital and Manager Selection

TC: What advantages does this platform offer to Plexo Capital? Do you acquire equity in the managers participating in the cohort?

LT: We derive several key benefits. Firstly, we maintain a pulse on market trends, gaining insights into GPs’ perspectives on fund creation and the types of opportunities they are pursuing.

Secondly, this initiative allows us to contribute to the venture community. For a long time, the knowledge required to transition from a successful investor to an independent fund manager has been difficult to access. I benefited from guidance from individuals like Georganne Perkins, but much remains unknown. There’s a significant gap in readily available resources – a true “VC Fund Management for Dummies” guide is lacking.

Investment Strategy and Program Participation

TC: Do you invest in the funds participating in GPx? Is this a condition of participation?

LT: We have made commitments to some funds within the program, while choosing not to invest in others. However, there are no required fees or preferential economic terms associated with participation.

Community Building and Expert Access

The program aims to foster a community among cohort members, enabling them to progress through the online modules at their own pace. The cohort sessions offer deeper dives into topics such as portfolio construction, identifying family offices, and developing go-to-market strategies. Participants also gain access to Plexo Capital professionals.

Vishal Tripathi, our portfolio manager, provides individualized guidance on portfolio construction. Kuji Chahal, who leads investor relations, develops tailored lists of potential LPs for each GP and assists with outreach strategies.

Target Audience and Long-Term Vision

TC: Is this program exclusively for first-time fund managers? Could those launching subsequent funds also benefit?

LT: Our initial cohort comprised approximately 13 GPs from 10 firms, primarily focused on launching their first fund. We aim to concentrate on emerging managers seeking to establish their first or second fund.

However, the open-source content is accessible to anyone interested in registering. This is an ongoing learning process, and I am continually expanding my own knowledge.