David Weisburd and Erik Torenberg sit down with Dr. Abe Othman, the Head of Data Science at AngelList and the Head of the Investment Committee at the AngelList Quant Fund. Dr. Abe has one of the largest and most granular private market data sets in the world of nearly 15,000 startups. In this discussion we dive deep into the data: power laws, what Dr. Abe’s research tells us about which companies to avoid at all costs, and whether alpha truly exists in venture capital. If you’re ready to level-up your startup or fund with AngelList, visit www.angellist.com/tlp to get started.
The Limited Partner podcast is part of the Turpentine podcast network. Learn more: www.turpentine.co
TIMESTAMPS:
(00:00) Episode preview
(01:37) Unintuitive impact of power laws in venture capital
(12:02) Explaining power laws to the layperson or finance professional in other asset classes
(14:17) Sponsor: AngelList
(18:50) Does the research reveal what percentage of early stage companies are identifiable as top 1% opportunities?
(20:21) The value of signals (i.e. founders alma maters)
(23:23) Pricing efficiency of startups
(29:00) Markup rates and loss ratios
(32:45) How does the quant fund fit into the model?
(37:31) Solo Gp's tend to hustle harder than traditional incumbent funds
(39:36) Dr. Abe’s view on how the LP community and broader ecosystem has evolved on these topics
(46:28) AUM drift in venture capital
X / TWITTER:
@dweisburd
@eriktorenberg
@AngelList
LINKS:
Dr. Abe’s research on the AngelList Blog: https://www.angellist.com/blog-authors/abe-othman
Early Stage Quant Fund: https://www.angellist.com/blog/early-stage-quant-fund
SPONSOR: AngelList
The Limited Partner Podcast is proudly sponsored by AngelList.
-If you’re in private markets, you’ll love AngelList’s new suite of software products.
-For private companies, thousands of startups from $4M to $4B in valuation have switched to AngelList for cap table management. It’s a modern, intelligent, equity management platform that offers equity issuance, employee stock plan management, 409A valuations, and more.
If you’re a founder or investor, you’ll know AngelList builds software that powers the startup economy. If you’re ready to level-up your startup or fund with AngelList, visit www.angellist.com/tlp to get started.
Questions or Topics you want us to discuss? Email us at LPShow@turpentine.co
Music License: URTKV8FDLQ7QOWYI
