I have been working on Precursor for over nine years at this point. I got a lot of very good advice when I was getting started. One thing that has stuck with me since the beginning was some feedback I got from Mike Maples at Floodgate when I was still formulating the plan for Precursor. I’m unsure if he’s the first person ever to say this, but I remember our conversation very clearly – he told me that your fund size is your strategy. I didn’t fully appreciate what that meant as a new fund manager, but the longer I am in this business, the more I think it explains fund behavior and individual incentives.

There is a certain part of that statement that was obvious to me then and is still obvious now. Your fund size, for the most part, dictates your check size, ownership targets, and portfolio construction. A fund of a given size only has a few levers to pull to get to top-tier returns. The larger your fund, the fewer levers you generally have to tinker with to generate great returns.

There is a second part of this that I didn’t really appreciate until about three or four years ago. The size of your fund also dictates the scale of outcomes that can actually move the needle for your fund, and that shapes the lens through which you evaluate the terminal scale of startups that come across your desk. The larger your fund, the larger absolute scale of outcomes you need and the more of those outcomes you need to acheive to make your math work.