Building competitive moats in VC at Lerer Hippeau with Ben Lerer and Graham Brown

Follow me @samirkaji for my thoughts on the venture market, with a focus on the continued evolution of the VC landscape.On this week’s show, we’re excited to have Ben Lerer and Graham Brown, Managing Partners at Lerer Hippeau. The firm was founded in New York in 2010 to back early-stage entrepreneurs. Today the firm manages $1.2B and has invested in over 400 companies including Oscar, Buzzfeed, Mirror, Warby Parker, and Casper. Ben’s background prior to investing was as Founder and CEO Thrillist, while Graham came over in 2015 from Softbank. During our chat, we covered everything from building and productizing a community to the evolution of the firm in maintaining its competitive advantage in the region. Hope you enjoy our conversation. A word from our sponsor:Feature-packed operating account & partnership ecosystemNationally chartered and headquartered in New York City, Grasshopper Bank is a client-first digital bank built to serve the business and innovation economy, combining the best of banking technology and years of industry expertise to deliver best-in-class experiences with trusted security and unparalleled support. Serving clients globally, the client-first digital bank recently announced the launch of Accelerator Checking, a feature-packed operating account with powerful digital tools designed to serve a wide range of venture-backed startups. With its latest offering, startup clients also receive exclusive access to its newly established partner marketplace, as well as a curated community of investors for fundraising support. For more information about Accelerator Checking or how to leverage Grasshopper’s platform for your firm, visit the bank's website at www.grasshopper.bank or follow on LinkedIn and Twitter.About Ben Lerer:Ben Lerer is a Managing Partner at Lerer Hippeau. He is the Co-Founder and former CEO of Thrillist, which was acquired by Vox Media in 2022. He chairs the Board of Directors for Urban Upbound and is an Associate Member of the International Academy of Digital Arts & Sciences (IADAS). Lerer holds a BS from the University of Pennsylvania.About Graham Brown:Graham is a Managing Partner at Lerer Hippeau. He joined Lerer Hippeau from SoftBank Capital, where he focused primarily on early stage investments in mobile and Internet, with a particular interest in marketplaces. Prior to SoftBank Capital, Graham was an Associate at Polaris Partners and then helped lead digital strategy at Life Line Screening, a direct-to-consumer preventive health company backed by Polaris Partners.Graham is a graduate of Colby College and Columbia Business School.In this episode, we discuss:(02:48) Why start a company? (05:33) The gap they saw when founding the firm in 2010(09:59) What drew Graham to the firm in 2015(13:34) Why their investing thesis of early-stage NYC companies worked so well in retrospect(19:32) How the the firm invests in its community(26:32) The number of investments typically per fund at Lerer Hippeau(29:11) Maintaining operational discipline(34:24) Deciding when to make an exception on a deal(38:08) Why they launched a select fund to invest at Series A, B, and C(42:41) Learnings from investing in companies later stages after they passed the first time(48:36) The importance of empathy and being humane when passing on a companyI’d love to know what you took away from this conversation with Ben and Graham. Follow me @SamirKaji and give me your insights and questions with the hashtag #ventureunlocked. If you’d like to be considered as a guest or have someone you’d like to hear from (GP or LP), drop me a direct message on Twitter.Podcast Production support provided by Agent Bee  This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit ventureunlocked.substack.com