Mike Annunziata spent most of a decade on the LP side before writing venture cheques of his own. He began at the Soros family office as the note-taker in its private equity pipeline meetings before moving on to the Cornell endowment, where he covered every asset class and learned where the bar sits for an institutional manager.
Mike is now Founder and Managing Partner of Also Capital, a concentrated hard tech fund. It grew out of the angel investing he did with his college friend, Will Bruey, now CEO of Varda. Their early cheques went into Varda and Radiant, and Also later wrote the first cheque into Northwood Space ahead of its Founders Fund seed round.
In this episode of Going Solo, we discussed:
An emerging manager has to clear an LP’s opportunity cost. For an endowment like Cornell, the alternative is a marginal dollar into Andreessen Horowitz or Sequoia. A new fund needs a specific path to beating that by enough to cover the extra risk, and Mike doesn’t think “outcomes are bigger” justifies much of the portfolio construction he sees.
Also asks founders to assume their technology works, then answers around ten questions about enterprise value and how the company will capture it. Expert calls on lasers, nuclear, space or robotics come last. They serve as a gut check on whether the founder is taking the right degree of engineering risk.
Origination means lending credibility to founders who are less legible to the venture establishment. Bridgit Mendler hadn’t started a venture-backed company before Northwood. Also agreed with the ground station problem she was solving, and so did its SpaceX advisers. With that behind it, Mike’s introduction to Founders Fund moved the pitch to “where do I wire?”
Fundraising is selling a luxury good: nobody needs another fund, so they have to want it. Fund 1 took Also a year to raise and Fund 2 about ten weeks. Mike’s advice is to get into business and put money to work before the full target is raised.
We also got into what Dorm Room Fund took from First Round’s process for controlling groupthink, and why Also backed Atlas on “allied production” while everyone was talking about domestic manufacturing. We finished on why Mike’s picture of the next ten years is robots everywhere.
Hope you enjoy it.
DG
