In this episode of 20 VC, Harry Stebbings interviews Mo Koyfman, founder and general partner at Shine Capital, discussing the recent launch of Shine's two new funds and Koyfman's venture capital journey. Koyfman shares insights from his experiences at IAC, Spark Capital, and Moko Brands, emphasizing the importance of strong yet adaptable opinions, and the value of deep founder relationships in early-stage investing. He advocates for disciplined, focused entrepreneurship, and the benefits of a constrained, selective approach to venture funding. Koyfman also touches on the challenges of reserve allocation and the dynamics of syndicate building in a shifting venture landscape. The conversation delves into the nuances of portfolio construction, the significance of ownership stakes, and the impact of capital abundance on startup culture. Throughout, Koyfman underscores the critical role of people and alignment in successful venture partnerships.
"They do not speak in public much. I know what you're thinking, how incredibly." "Mo was the managing member at Moko Brands, where he made angel Investments in Coinbase, Polychain, Harry's to name a few." "Mo spent over seven years as a general partner at Spark Capital, where he made investments in plaid, Warby, Parker and Hivemapper." "Finally, prior to spark, Mo spent over five years at IAC where he oversaw group of companies that included connective ventures, parent of Vimeo, college humor and busted t's."
These quotes outline Koyfman's professional background and the significance of his appearance on the podcast, given his extensive experience in venture capital and his low public profile.
"Honestly, it was an accident." "My father is an immigrant from the former Soviet Union who came to America when he was 35." "My mother, on the other hand, was the child of immigrants and grew up in Brooklyn." "I went to Penn as an undergrad, where I studied finance at Wharton and English literature in the college." "I was lucky enough to be recruited to IAC." "Through this experience, I really fell in love with the early stage of business building and decided that is where I wanted to spend my time moving forward."
These quotes provide a personal backstory to Koyfman's career, showing how his family, education, and early professional experiences shaped his path into venture capital and his eventual founding of Shine Capital.
"Honestly, what I learned at Spark, most importantly, is that I love early stage investing." "One of the core things I learned beyond that is really around the difference in structures of venture capital firms." "The more durable firms, in my experience, often have very clear leadership and governance structures."
Koyfman reflects on his biggest takeaways from Spark Capital, emphasizing his passion for early-stage investing and the realization that venture capital firms with clear leadership structures are more durable, influencing his approach to founding Shine Capital.
"I live my life by very simple moniker in this regard, which is strong opinions weakly held." "I am much more fundamentally interested in getting to the right answer than I am in being right." "Believing your own bullshit is not a way to do that."
These quotes encapsulate Koyfman's philosophy on opinionated leadership and decision-making, highlighting the balance between having strong convictions and remaining open to change based on new information or team input.
"I have a handful of mentors who challenge me on it." "The other day I was talking to one of my foremost mentors, Fred Wilson from Union Square Ventures, and he literally was screaming at me on the phone."
Koyfman discusses the value of mentorship in his personal and professional development, showing that he values mentors who are willing to challenge his ideas and help him grow.
"You have to take risk. That's what venture is all about."
This quote highlights the inherent risk-taking nature of venture capital, which is essential for success in the industry.
"Larger early stage funds always lead to lesser returns."
Mo Koyfman conveys the idea that larger funds may not be as effective in early-stage investing due to a lack of constraints that smaller funds naturally have.
"We're probably 65/35 on first money in."
Mo Koyfman details the reserve ratio of their first fund and how they manage investment allocations.
"They're not reserves, they're deserves."
This quote reflects Mo Koyfman's philosophy that reserve capital should be allocated to companies that have proven their worth, rather than being pre-assigned.
"I will never do that. The only time I won't do Prorata is if I don't need to or I know it's the best thing for the company."
Mo Koyfman clarifies his stance on prorata investments, emphasizing that these decisions are made in the best interest of the company and the fund, not just to follow a blanket rule.
Watching you make that mature decision as an entrepreneur, rather than watching you piss that money down the drain over the next two years and actually, in many ways, waste two years of your life with a very high opportunity cost that you could put against something way more valuable.
This quote emphasizes the importance of recognizing when a venture is no longer worth the investment, both in terms of money and time. The speaker is commending the entrepreneur for making a mature decision and not wasting resources on a failing venture.
The hardest thing for me, and often is the case, is the gray in between where you have a company that's doing okay, it's doing fine, but in the capital constrained world that you and I both live in and both quite enjoy, and like, there's an opportunity cost of that capital, and every dollar you allocate to an okay company is a dollar that goes away from a significantly high performing company.
Harry Stebbings discusses the difficulty in managing investments when a company is performing adequately but not exceptionally, highlighting the opportunity cost of capital allocation in a capital-constrained environment.
Unless what they're asking us is to step up and lead around, which I do not feel compelled to do under any circumstance other than when I feel compelled to do it.
Mo Koyfman expresses his stance on leading investment rounds, indicating that he only feels compelled to do so under specific circumstances that motivate him.
There's different ways to play the venture capital business, and we've certainly seen that evolve over the last bunch of years.
Mo Koyfman acknowledges the diversity of strategies in venture capital, suggesting that there is no one-size-fits-all approach and that his preference is for a balanced strategy between ownership and picking winners.
I believe in karma.
Mo Koyfman expresses his belief in the concept of karma, implying that the behaviors and decisions made by investors can have repercussions, potentially affecting their future success or failure in the venture capital industry.
I'm trying to beat them to the punch. I'm trying to convince the entrepreneur that I'm the better investor for them, that I'm going to care more about their company, that I'm actually going to roll up my sleeves and be there for them.
Mo Koyfman describes his approach to winning deals by demonstrating his commitment and value to entrepreneurs, contrasting with investors who may not be as collaborative or supportive.
I try not to
The transcript ends abruptly, but it appears Mo Koyfman was about to share insights on his lessons learned from successes and failures. The context suggests an emphasis on learning and adapting from experiences in venture capital.
"I've actually found learning lessons from successes is extremely dangerous because of the risk of confirmation bias." "I honestly believe you can only really learn from your failures."
These quotes highlight the risk of attributing success to the wrong factors due to confirmation bias and the belief that true lessons come from analyzing failures.
"My biggest lesson is really to lean into and learn and understand people and figure out if you have the right chemistry to be partners over time."
This quote emphasizes the significance of interpersonal understanding and chemistry in successful venture investments.
"At the end of the day, the more an investment matters to an investor, the better investor they will be for you, so long as they are not in a structure that they can't control."
This quote underscores the importance of an investor's personal commitment to the founder's success, rather than just the firm's resources.
"The best companies are built with focus and discipline, and when there's too much capital in the system, you lose those things."
This quote points to the detrimental effects of excessive capital on startup discipline and focus, advocating for a more balanced investment environment.
"Honestly, just that I could do it. I took a longer path to becoming an entrepreneur."
This quote reflects on Koyfman's realization of his entrepreneurial capabilities and his advice to others to act on their entrepreneurial desires sooner rather than later.
"Relentlessness, integrity and generosity."
This quote lists the three traits Koyfman values and hopes to instill in his children, indicative of his personal values and philosophy.