A ‘fan favorite’ for Los Angeles, today we have Jeff Morris Jr (“JMJ”), GP of Chapter One and infamous product leader at Tinder.
We discuss the existential crisis emerging managers are currently facing and the stark realities of an industry in flux. From the looming specter of industry consolidation & shutdowns, to the relentless pressure to prove relevance.
Offering a candid look at the struggles and strategies of today's fund managers, Jeff describes ecosystem where only the most adaptable will survive. He talks about the delicate balance between chasing deals and building a sustainable franchise, all while navigating a landscape where past unicorn valuations holds diminishing returns.
We also touch on the solo GP experience, Chapter One’s active product-driven strategy, and the significance of location in building a venture career (AKA why LA is the best city ever).
→ Listen on Spotify, YouTube, Apple
Background
As an operator, Jeff was one of the best known product leaders in the industry & previously served as the VP of Product, Revenue and an early employee at Tinder.
In the role, he led the revenue team to the #1 top grossing app in the App Store — and managed the business from the early days of monetization through the IPO, and for several years as a public company.
Jeff began investing in 2016 as an angel and a scout for Index Ventures. He is a seed investor in 13 unicorns including Mercury, Supabase, Compound Finance, Ro, Lyft, and Misfits Market. As well as other notable companies such as Glue, Farcaster, Captions, and Density.
Chapter One is an early-stage venture fund focused on helping seed stage companies find product-market fit. Their team has particularly strong technical chops as they previously held roles as product leaders at Twitter, Tinder, Robinhood, and Scale AI. Their LPs include many top venture funds (Sequoia, Greylock, Bessemer, Index, Kleiner Perkins) along with institutions.
Chapter One has ~$130M AUM and is currently investing from Fund II and will activate Fund III in Q1 2025.
Highlights
(02:02) The Tweet: Emerging Fund Consolidation
(02:34) Venture Capital Shakeup: Uncertainty and Options
(05:14) Conversations with Beezer: Institutional Backing
(07:09) Defining an Emerging Manager
(08:32) Current Conditions for Emerging Managers
(12:47) Consolidation: Examples and Creative Options
(20:50) # of VC Investors Cut by ~50% !!
(31:02) Staying Relevant: Attracting Talent and Founders
(35:06) The Solo GP Life: A Reality Check
(42:20) Chapter One's Product-Driven Strategic Advantage
(50:46) LA vs. The Bay: A Perspective on The Better City
Emerging Fund Consolidation
The venture capital emerging manager market is currently facing significant challenges, with the fundraising environment described as one of the most difficult in recent memory. Emerging managers are struggling to secure financing due to a cautious investor climate that favors large established managers.
Of the 10,000 funds Pitchbook is tracking in market, 45% of them are emerging fund managers. With only 16% of the total capital allocated to venture capital, emerging managers are left competing for an even smaller share.
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