Last week I attended Slush and took a ton of notes from the Investor Day panels. My favourites were panels on the state of venture, fund construction, and navigating the transition from an emerging VC firm to an enduring professional investment business. Below is a summary from 2,000+ rough words I scrambled into my iPhone on the day. I hope you find them as useful as I did.
1. The Vintage Year Power Law
I’ve previously covered power laws in venture portfolios. But it turns out that this phenomenon also emerges in another dimension: time. Leyla Holterud from StepStone Group shared compelling data on their analysis of two decades of venture returns across 1,000+ funds. They found that 80% of returns came from only five to seven vintage years over a variety of timespans. The implication? Consistent investing across cycles isn’t just prudent—it’s essential for capturing outsized returns.
2. On Loss Ratios: Even the Best Funds Strike Out 45-50% of the Time
David Clark from VenCap shared that even the most successful VC funds have companies that fail to return capital 45-50% of the time. Strikeouts are inextricably linked to the pursuit of great returns. ‘Go big or go home’ might be an overstatement, but as Clark argued, it’s a greater risk for an early-stage investor to be too conservative. Bold ideas with the potential to succeed massively are typically more likely to be write-offs than timid ideas that will never return a fund.

3. The Follow-on Imperative: Reserve More for the Winners
Top VCs systematically layer capital into their best-performing companies. Citing advice he got from Floodgate’s Mike Maples, Hussein Kanji from Hoxton Ventures advocated for a more aggressive 3 or 4:1 reserve ratio. This far exceeds the conventional $1 reserve strategy for every $1 invested at seed.
Why is this necessary? When seed investments graduate to later-stage rounds at greater valuations, maintaining meaningful ownership as an early-stage investor becomes increasingly tricky. Without adequate reserves, VCs risk being diluted in their winners – precisely the companies where maintaining ownership is crucial.
But how about companies that take longer to get to product-market-fit? Shouldn’t investors support companies that fail to hit their milestones on time?
On this issue, Kanji shared a two-tired reserve structure I hadn’t considered before. Fund managers can have offensive reserves (for doubling down on winners) and defensive reserves (for supporting struggling but promising companies). He suggested that investors should have allocations for both tiers but aim to do more on the offensive side.
Finally, Gil Dibner of Angular Ventures offered an important nuance to the discussion. While under-reserving creates obvious risks, he argued that excessive reserves can be equally problematic. Fund managers sitting on too much capital may feel pressured to deploy it suboptimally. Dibner suggested that it’s preferable to be slightly under-reserved, adding that the market typically provides solutions – such as opportunity funds or SPVs – to channel additional capital into winning companies when required.
4. The Minimum Viable Seed Fund: $100m
One clear bit of consensus that came from the fund construction panel was that $100M represents the minimum viable size for an early-stage fund today. Dibner noted that while funds above $200-300M struggle to generate strong multiples, sub-$50M funds struggle with a different problem – they lack the credibility and capacity to participate meaningfully in follow-on rounds.
Meanwhile, Filip Dames from Cherry Ventures shared how their first $8M fund taught them painful lessons about capital constraints when they couldn’t participate enough in follow-on rounds of promising companies. While smaller funds help emerging VCs establish a track record, Dames emphasized that meaningful Series A participation requires substantial reserves. Kanji also reinforced this view, adding that emerging managers today need at least $100M to build a sustainable practice.
5. LPs Look Beyond the Numbers
LPs ultimately want to back VCs who can source and invest in the best companies. However, they are mindful of other qualities, too. For example, Dhruv Patel from Wellcome Trust (£37bn AUM) highlighted the importance of team stability and thoughtful succession planning – recognizing venture as an “apprenticeship” where junior team development is essential.
In addition, founder and LP Colette Ballou reminded the audience that good LP communications matter. She pointed to the Silicon Valley Bank crisis where some VCs failed to adequately communicate their portfolio exposure and risks. Her advice was simple: GPs should provide quarterly updates, and if there’s a critical event, they should get ahead of the issue with an update on exposure.
This discussion made me appreciate that while track record matters, LPs are increasingly focused on backing managers who can build enduring firms and professional practices.