EUVC #244: Fred Destin on navigating the current market and reflections on life, the future and the role of religion

On the left, a Van Gogh-esque painting inspired by Fred’s post announcing change in path.

Yesterday, Fred Destin shared the news with us all that he’s pausing the raise for Stride Fund III and that he’d “Take a breather and open the door to new possibilities. I have no idea if that includes more investing; what I want to do now is gain some elevation, look at my life and the world around me, and take time to see what emerges.”

The day before, David sat down with Fred for an honest conversation about the state of the current market, how to navigate as a VC, and finally ending on faith and spirituality. The conversation did not cover this hallmark decision by Fred, but certainly, you can trace the meaning and bridge narrative.

I have to be honest that I'm in a, I'm very much in a kind of pendulum between excitement and concern. And it is difficult for me to look at the state of the world in general, between erosion of democracy, mental health crisis, climate, Ukraine and Israel, and to not take some form of pause to say: where the fuck are we going as a species?

and Fred continued:

I heard someone the other day describe humans as, you know; we're behaving like parasites at the scale of our planet, and I think there's something to that. So I would say that at the moment, I'm trying to sit with that and think about what is our impact and our responsibility …

What I'm excited about is, I think, there is an increased level of realization that we need to reintroduce humans at the center of what we do. Community, connection, relating. And that what started as a little trickle is starting to be more of a movement. And I think it's showing up in a bunch of places.

From this the conversation covered growing up professionally in an American psycho style environments where it’s all about the money as well as the role of religion.

Watch the full episode below or listen on Spotify or Apple 🎧.

Fred’s announcement post in full:

About two years ago, I started deepening my personal exploration of life and “what it means to be me”. With the backdrop of crises, conflicts and changes that have taken place over this time; the impact they’ve had on the world’s health, wealth, politics and culture; and the ambiguous role that technology has played in driving these dramatic transformations, I’ve realised that I’d like my contribution to be something other than “raising the next fund and investing in the next 25 companies”, at least in its current incarnation.

So I’ve decided to honour the unique position I find myself in, take a breather and open the door to new possibilities. I have no idea if that includes more investing; what I want to do now is gain some elevation, look at my life and the world around me, and take time to see what emerges. Just be curious and recreate time to think, and be.

In practice, this means we are pausing and not raising a new fund. We are still actively investing our second fund and have £220M of committed capital and 50 projects to look after. Our core priority is supporting our founders and driving as much value as we can for our investors on the two funds we have raised. We’re not stepping away from the task at hand until the job is done and we’ve delivered on our commitment. I am excited about having more time to work alongside founders, the part of my job I find most satisfying.

As we enter this new chapter, part of our talented investment team will be naturally moving on - Lina, Michelangelo and Giles: much respect and gratitude for the journey we’ve been on together.

Gabbi, the rest of the team and I will put our heads down to focus on the job to be done and our thinking caps on to figure out the future.

Chapters:
00:00:00 - Fireside Chat with Fred
00:02:13 - State of the Industry and Market Overview
00:04:44 - Re-ratings, Recaps, and Market Dislocations
00:06:58 - The Differing Views on Asset Positioning
00:09:13 - Impact on Founders and Entrepreneurship
00:11:31 - Dealing with Complex Deal Dynamics
00:13:47 - Balancing Risk and Return in Venture Investing
00:15:59 - The Misconception of Risk in Venture Capital
00:18:14 - Different Venture Strategies
00:20:25 - Building a Network of Experienced Founders
00:22:29 - High Velocity Investing and Operational Support
00:24:44 - Strategies for Venture Capital Investment
00:26:51 - Trade-offs between concentrated and diversified portfolios
00:29:05 - The Importance of Founders and Diversification in Investing
00:31:14 - Types of Risks in Investment Portfolios
00:33:29 - The Beginner Mindset and Being Mentally Plastic
00:35:32 - Excluded Investment Areas
00:37:43 - The Challenges of Defining Investment Strategy
00:39:49 - Challenges of B2B SAS
00:42:06 - The Game-Changing Power of AI Tools
00:46:21 - The Pendulum between Excitement and Concern
00:48:45 - The Role of Religion in the Human Experience
00:50:58 - Transcendence and the Beauty of Being Human