E10: Michael Kim | Founder of Cendana Capital on How Small VC Funds Can Return 200X+

Michael Kim, founder and Managing Partner of Cendana Capital sits down with David Weisburd and Erik Torenberg to discuss his thesis of creating a fund of funds at seed stage, insights into the changing landscape of VC from the 90s to today, and whether VC should recycle capital. Cendana Capital has invested in Forerunner Ventures, K9 Ventures, and IA Ventures. If you’re ready to level-up your startup or fund with AngelList, visit https://www.angellist.com/tlp to get started. (1:00) Episode Preview (2:15) Michael’s journey from international relations, to investment banking, to Silicon Valley (5:07) Why Michael started Cendana and the opportunity he saw (7:30) How has Michael’s thesis changed with the influx of capital? (8:30) Nano program (13:15)Challenges of scaling funds (16:50)Sponsor: AngelList (17:55)Economic tradeoffs for different fund sizes (19:20)Management fees as non-recourse loans (20:30)Ownership percentages and returns (23:17)Contrasting fund of funds platforms with a concentrated portfolio approach. (26:27)Bringing institutional capital into early-stage and esoteric strategies. (33:11)The LP reset and the current VC landscape (34:00)The denominator effect and dry powder in the market (41:00)The paradox of VC success and importance of fund selection (44:57)Portfolio construction (49:00)Which fund managers Michael will bet on, and why.