📈 Smaller VC funds = better financial returns [research]
60 deep tech climate investors. 36 questions to fall in love? The Pygmalion effect. (#161)
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Climate Startups + Investors
1.
60 deep tech climate investors.
Our fellow ecosystem builders at HackSummit created this magical investor list.
It includes funds between $20M and $20B, plus sample portfolio companies.
Some are generalist investors with growing climate deep tech interest.
Others are solo GPs focused 100% on this niche.
LFG — Make. It. Rain.
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2.
Smaller VC funds produce higher investment returns.
Size does matter. But not in the way you might think.
Our friends at Energy Transition Ventures analyzed VC fund financial performance on 237 US-based funds closed in 2018, 2019, 2020, and 2021 (“vintages”) across four size categories:
$25–100M
$101–250M
$251M–1B
> $1B
The result?
The top 10% of funds show many smaller funds ($25–100M) and no mega funds (>$1B).
Smaller VC funds matched or outperformed the other three size categories by net IRR in every vintage
This is reassuring news for newer, smaller funds carving out a niche in climate tech and impact sectors.
And perhaps a warning regarding how they’ll maintain high financial returns as they scale in future, bigger funds.
Personal Growth => Business Growth
3.
The Pygmalion effect.
This fancy term means we behave and perform better when people expect more of us.
How should we apply this to our teams?
Our children?
Ourselves?
Dig the science here.
Or sound super smart by referencing its origin — the Greek myth of Pygmalion, “where a sculptor's great expectations for his statue resulted in it coming to life.”
The opposite is also real — stereotype threat.
Our negative views about someone based on their identity (e.g., race, gender) can hurt their performance.
No surprise, except that many of us do it unconsciously.
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4.
36 questions to fall in love (with a cofounder).
Psychologist Dr. Arthur Aron created these questions in 1997.
The goal was to speed up the process of creating intimacy between two strangers. (What’s the rush?)
I learned about them in the book Supercommunicators: How to Unlock the Secret Language of Connection by Charles Duhigg, a Pulitzer Prize-winning journalist.
The method:
Each person answers the same question aloud.
Answer all questions.
Allow at least 45 minutes.
Finally, stare into each other’s eyes for four minutes. (gasp!)
Perhaps this could be used for your next offsite meeting, minus the fourth step.
See the full list of questions at PsychCentral.
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That’s all, y’all.
Make it a great week because it’s usually a choice.
~ Chris
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