EUVC #240: Patrick Murphy, Tapestry VC

A true deep dive on The Power of Investing in Repeat founders and their startups like Hopin and Pitch and this strategy's implications for how you build and run your firm.

Nov 06, 2023

Today we have Patrick Murphy, co-founder and managing partner at Tapestry VC, a 50m$ seed stage venture fund backing technical and repeat founders across Europe & US. Tapestry VC has its team spread out across the UK and USA. Tapestry VC are investing out of Fund II with a total 100m$ AUM and an established portfolio of over 40 companies and notable investments including Hopin, Pitch, Builder.ai, Nothing and Manna.

Chapters:
00:00:00 - Introduction of Patrick Murphy and Tapestry VC
00:02:40 - From Goldman Sachs to Venture Capital
00:04:51 - Reversing Investment and Taking Risks
00:07:15 - The Challenges of Merging with a Corporate VC
00:09:03 - The Importance of Stewardship in Early Stage Venture Capital
00:11:21 - Consumer Innovation and Next Generation Users
00:13:50 - The Rise of Gen AI in Revenue Growth
00:14:50 - Hopin: Founder Excellence, Scaling Software and Hiring Globally
00:18:09 - The Benefits of Repeat Founders
00:19:53 - Unboxing the new headsets and their features
00:21:10 - Investing in Repeat Founders
00:23:04 - Building a Strong Network and Fostering Global Relationships
00:25:18 - The Reality of Repeat Founders and Dilution
00:27:18 - The Advantage of Experienced Founders
00:29:25 - Building with Serial Founders and High Velocity Talent
00:31:35 - The Value of Co-Investors and Check Sizes
00:33:32 - Adding Value through Syndicates
00:35:54 - Successful Co-investing and Building Trust
00:38:10 - Life is About Picking People
00:40:24 - The Importance of Distribution and Telling Your Story
00:42:36 - Cultural Differences in Pitching
00:44:54 - Pitching Skills in US vs European Investors
00:47:11 - Prioritizing Amazing and Ambitious People
00:49:38 - The Importance of Luck in Success

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Quote by Stefan Walter from Cavalry

Vertical consumer software is super exciting, even in 2023.

Patrick’s take:

With a rich history of investing in various consumer technology ventures, Patrick shares Stefan’s excitement about the prospects for vertical consumer software in 2023 and beyond. He recounted his involvement with a spectrum of companies, from nascent ventures to giants like TikTok. However, when investing in this space, Patrick stressed the significance of adapting to the evolving demands and viewpoints of new users, who see the world quite differently than those before them.

Discussing his association with forward-thinking enterprises like Nothing, which aims to rival established smartphone manufacturers with a distinctive design and user experience, Patrick also touched upon his investments in innovative consumer applications. He teased a secretive new project focused on location-based social exploration and a consumer fitness app that has garnered exceptional metrics. Despite some doubts within the sector, Patrick's perspective reveals a conviction in the value of consumer software, a market niche he and his colleagues are eager to capitalize on with targeted investments.

Patrick gave a hearty commendation to Jonathan Sibilia and Nicol McClafferty from Molten Ventures, acknowledging them as key partners on Tapestry VC’s journey. Based in London and with a keen eye across Europe, Patrick noted their significant role as an LP in the European ecosystem. Molten Ventures had been a foundational LP for Patrick's endeavors and continued to be exceptional co-investors who have followed through on their commitments and highlighted their involvement in Manna as a great case example of this.

Patrick emphasized the importance of leveraging LP relationships effectively, giving them necessary access and information. He believes that trust is central to these relationships, allowing for open and transparent dialogue about investment opportunities. This approach has led to collaborative discussions on portfolio companies, with Molten Ventures engaging actively, whether choosing to invest or passing on certain deals.

Q: What advice would you give your 10 year younger self?

Focus on picking the right people. Stressing the importance of choosing the right people to work with, Patrick attributes the high points of his life and career to the exceptional individuals he had the fortune to collaborate with. While earlier in his career, he might not have fully realized the extent to which people, rather than merely circumstances, were pivotal in shaping positive outcomes, he now firmly believes in this principle.
He noted that, conversely, negative outcomes in business or personal affairs often stemmed from interpersonal conflicts rather than flawed strategic analysis. Patrick has come to value the significance of surrounding oneself with ambitious, highly principled people, and he regards this as the paramount piece of advice he could offer to anyone.

Q: What are your top tips for emerging VCs across Europe who are fundraising ?

Focus on being able to articulate the reason that you exist and truly understand why you win. Patrick shared that he observed a stark contrast between European and U.S. venture firms, noting that the former often have roots in private equity or similar fields, while the latter are frequently founded by company builders or successful entrepreneurs. As a consequence, we have a noticeable scarcity of venture firms in Europe with a strong focus on technical expertise, a disparity Patrick attributes to the different professional backgrounds prevalent in the Europe vs the US.
Further, with venture funding becoming more widespread, institutionalized, and global, Patrick anticipates a trend towards consolidation and the emergence of larger funds engaging in international investment.

Q: What’s the most counterintuitive thing you’ve learned in venture?

If something is truly excellent, you should try to have as large part of it as possible, even if that comes at a high price. Essentially, possessing a tiny fraction of something extraordinary isn’t beneficial. It’s better to acquire as much as you can of something truly exceptional, even if the price fluctuates by 10 to 20% more or less than your usual guidelines state.

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