On co-investing & building strong LP relationships with Rodrigo Ferreira, Investment Director at Vinthera

Join us for a deep dive into managing fund performance, building relationships with LPs and co-investing with other investors.

May 23, 2024

Transcript

Today, we welcome Rodrigo Ferreira, Investment Director at Vinthera, for a new episode of the EUVC podcast.

As a VC investor at Vinthera, a hybrid venture capital fund, Rodrigo is backing top-performing VCs as an LP and their breakout companies across the US, Europe, and Israel.

Prior to joining Vinthera, Rodrigo gained 5 years of experience backing VC fund managers across the globe as Principal and Investment Team lead at boutique fund of funds firm BFP. There he played a key role in over 20 fund investments and managed a portfolio of more than 50 funds with top decile aggregate returns. Before that, he gained experience in investment banking and asset management.

Rodrigo holds an MSc in Finance from ESADE Business School in Barcelona, a BSc (Hons) in Economics, and a BSc in Management from the University of Lisbon, where he later sat on both the Advisory Board and Board of Directors.

This episode is part of the State of European VC Fundraising Report 👀

Together with our good friends at Isomer Capital and Floww, we’ve made a report filled with graphs, beautiful narratives, and video interviews.

Drawing from our past 300+ podcast episodes, combined with the most recent market information and Isomer Capital’s vaulted data treasures, we aim to reveal the effects of the tech reset on the European fundraising market. We also explore how top European VCs have adapted their strategies, tactics, and operational guides in response.

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Chapters:

00:25 Co-Investing Strategies with Emerging Managers
04:48 A Deep Dive into Diligencing Performance for Emerging Teams
05:11 The Three Pillars of Evaluating Fund Performance
05:57 Portfolio Construction: A Key Focus for Venture Capitalists
07:21 Understanding Track Record and Team Dynamics
10:21 The Art of Building a Concentrated Portfolio
10:58 Emerging Managers and the Strategy of Concentration
15:42 Co-Investment Strategies and Building Relationships
17:00 Relationship Building in Venture Capital
19:55 Diligencing the Partnership Fit with Managers
22:39 The Long-Term Nature of LP-GP Relationships
23:28 Closing Thoughts and Advice for Emerging Managers

✍️ Show notes

Key learnings from the episode

Diligence in Emerging Managers.

Rodrigo emphasizes the importance of diligence when evaluating emerging managers. He focuses on three pillars:

Strategy: How the fund positions itself uniquely to founders, its specialist or generalist approach, and its value addition to portfolio companies.

"What's your unique USP to founders? How do you get access to the best companies? Why should founders take your money?"

Portfolio Construction: This involves understanding the dynamics of portfolio size, ownership stakes, and how these impact potential returns. Rodrigo prefers more concentrated portfolios as they require fewer successful exits to return the funds.

"I'm a bit of a Portfolio Construction geek myself. So I really like to, uh, discuss that, uh, with the GPs."

Track Record and Team: The importance of a track record and experienced team members is underscored. Rodrigo suggests investing in teams that may be new to fund management but not to investing.

"We invest in first time firms, not first time investors... It's important to see that, I mean, you've made it already, whether it's as an operator, as an angel investor at a big brand name fund."

Co-Investment Strategies.

The discussion also covers co-investments, where Rodrigo details the approach to investing alongside portfolio funds. The key elements here include:

Building strong relationships with General Partners (GPs) to ensure access to co-investment opportunities.
Understanding and agreeing on investment strategies from the start to ensure alignment and efficient decision-making.

"For us to co-invest with the funds, we need to prove to show that we are, we have enough value add, and also for us to grow our allocations with the really oversubscribed funds, we need to build that relationship that the funds want us to invest in them as much as we want to invest in them."

Fund Relationships and Networking.

Rodrigo addresses the importance of building long-term relationships in the venture community. He suggests that the best time for General Partners to network and build relationships is outside of active fundraising periods to avoid transactional dynamics.

"The best time to build these relationships is actually when you are not fundraising because you immediately remove the transactional aspect out of the discussion."

Personal Dynamics and Fit.

The personal connection between Limited Partners (LPs) and GPs is crucial. Rodrigo mentions the "beer test" — whether he could see himself having a beer with the person — as a subjective but important part of his evaluation process.

"You need to pass the beer check, which is, would I be happy? Just, you know, grabbing a coffee or having a beer with you."

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