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EUVC #177: Co-investing with your GP/LP

EUVC #177: Co-investing with your GP/LP

with Alexis Hussou of HCVC & Chris Wade of Isomer Capital

For this week’s episode, we got a rare look at GP/LP co-investment dynamics with participants from both sides of the table. And most importantly: Alexis Hussou of HCVC & Chris Wade of Isomer have actually done deals together, so no skirting the uncomfortable stuff here.

I must say, I’m particularly proud of this episode as I do think it’s one of the most honest conversations we’ve brought on But let’s start with the beginning:

The origin story of the relationship between Isomer and HCVC

“This is very, very cool! I could get quite excited about this! I just sure hope that they know about venture capital as well!”

I could talk at length about how I’d wish more LPs would think about emerging VCs like that. But I’d both be talking my own book and preaching to the choir, so I’ll hold my peace.

Managing LP relations in co-investments

It’s a funny thing with co-investments. On the one hand, many LPs focus on getting rights/opportunities to access on these when investing, on the other hand, many GPs express that LPs typically fail to follow through when they get the opportunity. To the level that I created this gif some time ago:

But there’s many things to consider when doing it. We asked Alexis to expand on how he thinks about LP-co-investing.

You have to do this with people where there's a lot of trust on both sides.

Exactly, the point of trust in the relationship was seconded by Chris:

“The overwhelming most important thing an LP can ask of a GP is to be transparent and that we can have a trusting relationship. And this act was more affirmation than we ever needed that we were backing the right manager.”

Now finally, before letting you go on to the rest of this newsletter, I wanna share with you the below segment as one thing I keep seeing is emerging VCs not spending enough time (if any!) on getting to understand potential LPs’ context and motivations for investing.

LP motivations & reflections on co-investments

We run by this fundamental inconvenient truth: Funds don't make money, companies make money.

Listen to the whole episode below or wherever you get your podcasts.