Many new funds have cropped up in recent years with GPs emerging from other firms and as company operators who want to begin investing in start-ups.
But it isn’t always easy becoming a GP of a new fund, particularly for diverse fund managers, so one venture firm is looking to change all that.
Plexo Capital has set up its GPx program to help newly launched GPs become better fund managers and remove the friction that many new, diverse managers face.
Lo Toney, founding managing partner at Plexo, told Venture Capital Journal that the program was partly inspired by the difficulties he faced when he left GV (formerly known as Google Ventures) to launch Plexo, an institutionally backed firm that makes direct investments and backs fund managers. Plexo is a newly launched fund itself, having closed on its inaugural fund two years ago with backing from GV parent Alphabet as well as Intel Capital, Cisco Investments, Royal Bank of Canada, Kapor Capital, Hampton University Endowment and the Ford Foundation.
“After leaving GV, I was in the real world and I realized that there were all these things I learned about being a great investor. But now I needed to learn how to be a great fund manager and that is different. The real problem is that while we focus on emerging GPs, there’s no comprehensive guide to VC fund management,” Toney said.
Toney said he benefitted from advantages when he began Plexo. Notably, through his own network, he had access to mentors. But he said even he found it difficult to learn the tips and tricks of GP fund management to help him build and position his firm. Such lessons include how to operate the back-office needs of a fund, how to construct a budget and details surrounding fund formation and managing the fund.
Most new GPs don’t have the luxury of having mentors with connections to the industry to explain those details, he said, especially if the emerging manager GPs have diverse backgrounds and don’t spin out from a traditional venture network.
Toney’s personal experience launching Plexo led him to compile a list of details that new GP fund managers should know when launching their own venture funds. He created the GPx program to formally guide new GPs and remove barriers preventing diverse GPs from starting their own vehicles.
Sponsors of the program include Plexo backer Alphabet as well as City National Bank, Practical VC and Gunderson Dettmer.
GPx offers open-source video classes on demand of lectures from experts in the field and a cohort program where chosen GPs get to have one-on-one office hours with the experts. It also allows them access to the Plexo network of GPs and LPs.
Experts include such tech executives and industry experts as Lindel Eakman at the Foundry Group, Erin Harkless Moore of Pivotal Ventures, Charles Hudson at Precursor Ventures and Elizabeth ‘Beezer’ Clarkson of Sapphire Partners.
The first cohort of 12 emerging managers includes the following:
- McKeever ‘Mac’ Conwell II of RareBreed Ventures
- Tessa Flippin of Capitalize VC
- Sean Mendy of Concrete Rose Capital
- Allison Stillman of Serena Ventures
- Jennifer Hopp of ATO Ventures
- David Kumaran of Aether
- Marcos Fernandez of Fiat Ventures
- Cee Cee Schnugg of Boom Capital
- Andre Charoo of Maple VC
- Molly Fowler of Dorm Room Fund
- Nait Jones from Andreessen Horowitz
- Maya Horgan Famodu of Ingressive Capital
Toney said Plexo also provides access to their in-house portfolio manager, who can walk through portfolio construction, and a social media manager to help new fund managers build their own brand.
Ultimately, the GPx program aims to make it easier for more diverse and new GPs to succeed.
“By helping to remove some of these artificial barriers, we hope to make becoming a GP more efficient. That by removing some of the friction, they will be able to understand what’s necessary to be a truly world-class, institutional-grade fund manager,” Toney said.