Gautam Gupta from TCV (Velocity) on the trend of large funds going early, the art of pro-rata investing, and what he is seeing in this market cycle

Follow me @samirkaji for my thoughts on the venture market, with a focus on the continued evolution of the VC landscape.This week we are joined by Gautam Gupta, who is the co-lead of TCV’s new expansion stage strategy called TCV Velocity. TCV was founded over 25 years ago with over $15B invested in over 350 companies. Prior to launching TCV Velocity, Gautam spent time as an investor at General Catalyst and M13, and in between those shops he was Founder and CEO of Naturebox. Gautam brought such an interesting point of view to our conversation, and we covered a lot of ground spanning from early to late-stage investing. Hope you enjoy this episode!Aumni is an investment analytics company dedicated to improving private capital markets. Aumni’s technology digitizes hard to track unstructured data from private transaction agreements and organizes it in a structured database through an intuitive dashboard. For investors across the board, the insights provided by this data improve the managers ability to build strategy and make better decisions. Today, Aumni tracks data from over 250 thousand private market transactions to provide anonymous, aggregated market benchmarks.As someone that works deeply in the private fund space, I’m incredibly excited that Aumni’s solution helps fund managers provide more insightful accurate reporting to their investors.  Check them out at Aumni.fund.Subscribers of Venture Unlocked can sign up for 20% off when you mention Venture UnlockedAbout Gautam Gupta:Gautam is General Partner at TCV where he focuses on investments in the consumer technology space including commerce, consumer-facing healthcare, education, software, and financial services businesses. Before TCV, Gautam was a Partner at M13 Ventures, an early-stage venture capital firm focused on consumer technology, where he led investments in marketplace, consumer subscription, and B2B2C models.Gautam started his career at General Catalyst in 2004. He was initially an intern while in college and later became a member of the investment team. He left to launch NatureBox and, as CEO, helped build the company into a nationally recognized brand with millions of customers. He did his undergrad at Babson College.In this episode we discuss:02:13 Gautam’s career journey as an investor and founder04:52 How being a founder has shaped him as an investor07:50 Identifying whether a company truly is a venture backable company10:27 Why TCV setup the Velocity Fund to do earlier stage and smaller investments11:33 What is an expansion phase investment?14:35 Pros and Cons of traditionally later stage firms investing earlier17:19 Creating a unique brand in a larger firm19:24 How today’s market is compared to past down markets in 2008 and the dotcom bust23:07 Changes in deals and the market in the last year26:11 Competing in today’s market as an investor29:01 How Power Law is skewing the markets31:05 Looking back on deal memos of the past to see how short-sighted they were33:48 Why TCV Velocity is sticking with their investment thesis36:17 Why investors get pro-rata decisions wrong so often38:48 Advice he would give himself in 200741:08 Common traits of successful foundersI’d love to know what you took away from this conversation with Gautam. 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 Agency 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