Aydin Senkut on Scaling Felicis and Investing Across Stages

Aydin Senkut grew up around entrepreneurs and says he had long wanted to invest. After roughly six years at Google, where he saw the company grow from about 30 to 3,000 people, he wanted a more entrepreneurial role. Angel investing became the starting point for Felicis.

He considered joining an established venture firm first, but says his unconventional background did not lead to a job offer. Fundraising was also difficult: prospective limited partners heard an ambitious strategy without a long institutional track record. Some chose to back him, and he says experiencing rejection helped him empathize with founders.

Senkut moved from angel investing to a firm because he wanted a team and a broader strategy across geography and stage. Personal capital and time had limited how many opportunities he could pursue. He recalls that the first institutional fund was $41 million and invested in companies including Rovio, Shopify and Fitbit.

In the 2022 market, he argues that nominal seed prices should be considered alongside inflation and rising costs, while acknowledging that markets force investors to adapt. His inflation comparison is an illustrative estimate rather than a precise inflation-adjusted series.

Felicis prioritizes access to companies it believes could become exceptional, even if that requires accepting a higher valuation or lower initial ownership. Senkut says some past winners grew far beyond expectations, offsetting entry price differences in those examples. His judgment relies on identifying rare outliers and does not mean price or dilution are irrelevant to returns.

Ownership still matters in relation to fund size, he says. Felicis uses fund models and can start with a smaller strategic position when necessary, then seek to increase it by demonstrating value to founders. Further allocation is not guaranteed, and his account reflects the firm's own strategy.

He credits the firm's limited-partner board with urging vintage diversification: stay active, but avoid deploying an entire fund over only twelve months. Senkut favors multiple forms of diversification, including sector, geography and timing, and suggests around 40 to 50 companies for his approach. Other strategies can legitimately be more concentrated, and diversification does not eliminate losses.

As round sizes and valuations rose in 2021, the firm had to adapt its model. Senkut says a larger fund gave Felicis flexibility to participate or lead across stages; he argues fund size should follow a deployment plan rather than simply the amount investors are willing to provide.

Asked how crossover funds might respond to the 2022 downturn, Senkut says private markets are relevant to investors seeking companies that remain private longer. He also notes that very early companies offer less data than public markets, making it hard to predict exactly where those firms will move. These are contemporaneous market views, not outcomes.

Stebbings worries that well-capitalized funds moving earlier could inflate Series A prices. Senkut replies that their historical focus and need for data may leave other areas open. He believes founders also need judgment, coaching and operational experience, and may decide that the highest valuation is not always the best partnership.

Senkut describes three stages of building a firm: solo operator, team, and team of teams. He says the transition taught him that talent alone is not enough; cultural fit and a growth mindset matter. He also recalls taking chances on people whose backgrounds did not make their potential obvious.

He calls the firm's guiding principle ‘success with empathy.’ In his view, strong performance and considerate internal relationships can coexist, though he recognizes strategies involve trade-offs. As founder and manager, he has an interest in his favorable assessment of Felicis.

Senkut sees expansion across stages and regions as scaling a broad original strategy rather than creating an entirely separate product. The firm's fund-of-funds activity also supports managers with complementary networks. He says that effort helps extend reach without hiring an indefinitely large internal team.

He recalls missing Airbnb and Uber and says that frustration helped lead him to look for adjacent opportunities, including payments company Adyen. He remembers turning down Airbnb partly because of perceived legal risk; in hindsight he believes he underestimated how the company could navigate those challenges. These are his recollections, not a complete assessment of the companies' risks.

Senkut argues venture returns depend on saying yes to some exceptional companies, not merely rejecting many proposals. He tries to examine missed opportunities through process: who was not in the network, what risk was overweighted, and what the upside could have been. Hindsight, he says, can make earlier decisions look more obvious than they were.

On when to sell, he describes assessing upside and the probability of future growth. He contrasts a recurring-revenue business with a hardware business that must sell new devices to grow, while recognizing different markets have different risks. The examples are his framework, not predictions of any stock's performance.

Sometimes Felicis distributes public shares rather than selling and distributing cash, allowing limited partners to make their own decisions. Senkut says he has later regretted some distribution timing, but believes the firm's primary responsibility is finding great companies rather than managing each client's public portfolio. He acknowledges there is no perfect answer.

His favorite book is Antifragile, whose attention to unexpected events resonates with the uncertainty he saw in 2022. He has also become less dependent on others' validation and believes independent thinking becomes easier with experience, while remaining difficult.

He considers emotional intelligence as well as analytical ability important in venture. His first limited-partner board served as a source of guidance on reserves, recycling and diversification; he deliberately included skeptical members so the firm could learn rather than hear only praise.

His continuing concern is how to provide more useful help to founders as the firm grows. He finds it difficult to decline founders he knows or likes while maintaining a consistent investment process. He recalls meeting Shopify's founders and recognizing in their thinking qualities that reminded him of early Google.

For a recent announced investment, Senkut names Living Carbon and describes its goal of biologically enhancing trees to capture more carbon and withstand hazards. These are claims and ambitions he attributes to the company, not independently verified outcomes. Felicis invested in the company and has a financial interest in his positive assessment.