Harry Stebbings' $400M Fund
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A story about how venture capital fund managers can make guaranteed money through management fees, using Harry Stebbings as an example.
"Harry Stebbings just raised a $400 million fund. Harry is going to make $80 million guaranteed in fees just fees - he could be the worst investor in the world. He's going to make 2% a year on $400 million, which is 20% over the life of a 10-year fund. So just do 20% - $80 million in fees guaranteed. That's his floor.
Who cares about the upside from there if you're Harry? All you gotta do is keep the game going and maybe raise another fund. That would be amazing. VCs want you to be all in, they want you to live on scraps, they want you to have no diversification and stay super laser focused. They want you to go ride for the big upside, but they themselves have a very different picture of risk.
It's funny that the person giving you that advice is literally doing the exact opposite with their own finances and portfolio. They're not wrong because they're saying 'Oh you wanted to play the Mark Zuckerberg game, then that's how you gotta play.' So they are giving you the right advice if you wanna be doing that."
Shaan Puri
Host of MFM
Shaan Puri is the Chairman and Co-Founder of The Milk Road. He previously worked at Twitch as a Senior Director of Product, Mobile Gaming, and Emerging Markets. He also attended Duke University.