Rob Go on Raising Venture Funds and Building LP Relationships

The NextView co-founder explains fund construction, anchor investors, fundraising follow-up and the trade-offs in seed investing.

RGRob GoGast · NextView
Kanal
20VC with Harry Stebbings
Veröffentlicht
23. Juni 2023
Video
1:07:41
Lesezeit
9 Min.
Original
Englisch
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In 30 Sekunden

Rob Go shares lessons from building NextView and raising five funds with Harry Stebbings. They debate reserves, anchors, LP qualification, follow-up and seed valuations, while Go explains mistakes and decisions from his own investment career. The fund figures and market predictions are his account at the time of the 2023 conversation.

  1. 1Fund constructionGo describes a $135 million seed fund and $65 million opportunity fund, with different roles for initial and later investments.
  2. 2Two routes to a first closeAn anchor can provide an institutional signal, while a bottom-up close can let a manager begin investing sooner.
  3. 3The risk of a prominent LPGo recounts a major institution withdrawing late from NextView’s third fund after leadership changes.
  4. 4Qualify timing and fitHe recommends understanding an LP’s allocation, strategy, decision capacity and fundraising window.
  5. 5How much follow-up?Go limits repeated asks; Stebbings advocates persistence with useful updates. Their approaches differ.
  6. 6A missed marketGo says NextView passed on DraftKings because it underestimated the market, a lesson he applies to future decisions.

Das Wichtigste

  1. Construct a fund around check size, ownership, follow-on reserves and the strategy it can realistically execute.
  2. A small viable first close can establish a fund while slower institutional relationships develop.
  3. Assess an LP’s allocation, timing and internal champion alongside its reputation.
  4. Provide useful information and build relationships over time, while respecting differing follow-up preferences.
  5. Distinguish distributed cash from paper performance and acknowledge uncertainty when selecting follow-ons.
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01

Entering venture and fund design

Go recounts the origins of NextView and explains its seed and opportunity funds, reserves and ownership.

Rob Go says his biggest missed investment was DraftKings. He had known founder Jason Robins in college and recognized the team’s talent, but NextView passed because it misunderstood the market’s size, not because of regulation.

Go entered venture after Spark Capital contacted him while he was in business school. After about two years at Spark, he and partners David and Lee saw an opening for a seed-focused firm outside Silicon Valley and founded NextView, despite their relative inexperience.

He calls venture a young person’s game because energy and hustle can be an advantage, while experienced people can provide knowledge. The partners once worried their backpacks made them look too young at LP meetings; after the first fund closed, the backpacks became a firm tradition.

At the time of the conversation, NextView was investing a $135 million seed fund and a $65 million opportunity fund. Go says its construction uses roughly half the seed fund for follow-ons and initial checks of $1 million to $3 million. He refers to roughly 30 core investments per year, while the subsequent calculation and first-fund comparison refer to roughly 30 per fund; the transcript does not reconcile the two.

The opportunity fund’s size reflected expected opportunities, concentration and LP input. The funds were stapled together in the latest raise, so LPs invested roughly two dollars in seed for each dollar in the opportunity fund. Go says this kept most capital in the strategy for which investors originally knew the firm.

Stebbings questions reserves, concerned that apparent momentum can lead investors into hyped companies. Go says the first check is NextView’s most important ownership purchase, and reserves also support early companies on the way to Series A. The team ranks follow-on opportunities quarterly, independently of a financing event, to limit the influence of a prestigious new lead.

Go says the seed fund typically invests heavily at seed and around pro rata or a little less at Series A, then stops; the opportunity fund comes in at B or C. He says the latter has somewhat discounted fees. LPs had less objection during the strong market when it was raised, he recalls, and most capital still went to seed.

NextView’s first fund was $21 million. Go says its construction was broadly similar, with roughly 30 investments per fund, smaller $300,000–$400,000 initial checks and some reserves. At that time a $1 million seed round was relatively large, so a smaller fund could buy meaningful ownership.

02

Documents and anchors

He discusses fund documents, partnership structure, anchor investors and the risks of concentration or special rights.

For fund documentation, Go recommends choosing an experienced lawyer and agreeing with partners on ownership and management before focusing on LP materials. He says the deck and track record are the central fundraising documents; supporting material helps LPs explain the opportunity to their investment committees.

NextView’s partners share carry, salary, ownership and governance equally. Go says that structure suited partners with aligned long-term goals and reduced incentives to renegotiate as individual results changed. He does not present equal splits as the right answer for every partnership.

An anchor-first strategy can secure a substantial early commitment after a long institutional process and make later decisions easier. NextView tried that approach, but the potential anchors lost confidence. The firm instead gathered smaller commitments from people who trusted the team, closed a viable amount and continued cultivating institutions.

Stebbings recommends asking supportive LPs for further introductions and closing enough to demonstrate that the fund is in business. Go agrees this can work for many early-stage funds, while noting that a growth fund may need a substantial anchor because a very small close could make its intended strategy impractical.

Go is not categorically opposed to concentration in a small fund; NextView has had an LP above 20%. He regards 50% as extreme and warns that a very large anchor may seek special control or economics. A 20–25% anchor may be imperfect, but its influence can be diluted in later funds.

A prestigious endowment or foundation can signal credibility to other investors. Go places more weight on an empowered individual champion who believes in the strategy and will remain through the next fundraise. He cautions that institutional categories do not guarantee loyalty when markets or personnel change.

Stebbings stresses the fundraising value of well-known institutions. Go agrees but notes the reverse risk: a prominent LP withdrew from NextView’s third fund at the last moment after leadership changes. Existing LPs stayed, some increased commitments, and a steady co-anchor helped the firm recover.

Go says the departing institution’s changed strategy made sense given its size and NextView’s small fund, but the event was painful. He credits Michael Kim at fund-of-funds investor Sendana with helping reassure other LPs. Strong relationships matter in both good and difficult fundraising moments.

Asked about giving an anchor a stake in the GP, carry or special economics, Go says he generally would not do it. Other LPs often ask whether early investors have special governance or economics, and founders of a fund should consider whether concessions undermine the independence they wanted.

After an early anchor fell through, high-profile investors proposed joining forces and raising a much larger fund. Go says the offer was tempting, but partner David argued that the team would effectively become employees rather than build the independent firm they had left their jobs to create. They chose their own path.

03

Finding and qualifying LPs

Go and Stebbings compare introductions, meeting preparation and how to assess an LP’s timing and fit.

First-fund fundraising involved hundreds of meetings. Other managers who had recently raised similar funds proved especially generous, sharing lists and explaining LP preferences. Go singles out Bryce Roberts for walking him through a spreadsheet of potential LPs; Stebbings says helpful introductions can benefit both managers and LPs.

Go is comfortable sending a deck before a meeting, though a detailed introduction can leave a natural reason to follow up. Stebbings prefers the blurb because a deck can give someone a reason to decline before meeting. Both emphasize qualifying where to spend time.

Go says LP timing is often decisive: is the investor expanding its program, looking for the manager’s category and able to decide within the fundraising window? He suggests asking about the size and direction of its venture allocation and whether it has invested in similar strategies.

Stebbings also checks geography, typical check size, existing portfolio and the LP’s approach to long-term support. Go notes that some investors are direct, while others keep answers vague to preserve optionality. A good meeting can focus on the people, partnership and reasons behind the strategy, not just numbers.

Go recalls an investor observing that the mathematically best portfolio would put everything into the first round of the one eventual winner; diversification accommodates uncertainty and risk. The hypothetical is meant to stretch thinking, not recommend betting a real fund on one company.

His least useful meetings are with people who clearly do not want to be there. He works hard for good introductions but no longer tries to force a meeting with an unwilling LP. In his view, time is better spent on other relationships.

04

Follow-up and closing

They debate persistence, deadlines and building relationships before a fundraising process.

Go likes leaving something useful for a follow-up. NextView uses an intentionally incomplete preliminary data room and offers more information to LPs who engage and ask for it. He treats those stages as a way to assess interest, while ensuring there is a reason for the next conversation.

His rule is to ask twice, but not repeatedly request a meeting after two unanswered messages. An unresponsive LP is not permanently lost; circumstances can change. Stebbings disagrees on frequency, recounting 50 weekly emails before an investor replied, but emphasizes sharing useful news rather than repeatedly asking without offering anything.

Stebbings describes meeting LPs even when not fundraising, seeking introductions and sending periodic updates to build relationships over time. Go agrees that sharing good news differs from repeatedly asking for a meeting. Both favor keeping relationships human rather than treating each contact as a single transaction.

Creating urgency is hard because LPs have little incentive to be the first yes. Go suggests an early close, even a small one if the strategy permits, followed by a concrete final-close timeline. Some investors value being early supporters, but a deadline should clarify genuine timing rather than manufacture a false scarcity.

Stebbings favors a 14–21 day decision window where appropriate, while allowing for investment-committee approval. For subsequent funds, Go says NextView signals its expected first-close timing 18–24 months ahead and reminds investors, so LPs can plan. He sees consistency with prior commitments as reassuring.

Stebbings says institutional allocation calendars can affect timing. Go notes many managers may target the same windows, and they debate whether fundraising should be a continuous relationship or a concentrated process. Go says different managers have different strengths; some are better suited to maintaining relationships continuously, others to focused bursts.

05

LP mix and fundraising lessons

Go examines check sizes, different LP categories and lessons from five funds.

Go is flexible about minimum checks for individuals and applies a relatively low minimum for institutions. Small LPs can offer strong introductions or increase commitments later, and many small checks can make a base resilient if the manager can handle the workload. Stebbings counters that smaller, less experienced LPs can require more time and education.

Different LP types fit different stages. Some funds of funds seek access to established brands, while others pursue new strategies; the middle stage can be awkward when a manager is neither novel nor famous. Some pensions and endowments prefer a stable team and consistent strategy over several funds.

Go describes NextView at fund five as no longer new but stable, with a strong track record and a smaller, less flashy brand. He says AI-specific funds might be an emerging category, though crowded, and views solo GPs as a potentially durable format, separate from the question of scalability.

Fundraising should be organized but not managed so rigidly that it excludes serendipity, Go says. An LP he had known since the first fund eventually committed near the end of a later process, nine months after initially declining or not responding. He attributes the change largely to the LP’s own timing.

He says the fifth fund was the easiest to raise, aided by distributed cash, while the first was hardest because the team was learning. The third was also difficult after the major LP withdrew. His lesson is to treat early refusals less personally: an LP that passed for years eventually became one of NextView’s largest investors.

06

Seed markets and quick fire

He shares views on seed pricing, non-consensus opportunities, AI and lessons from DraftKings and Attentive.

On seed competition, Go says conditions were difficult but predicts multi-stage firms may eventually focus on later rounds where they can write larger checks. He describes pricing as bifurcated: sought-after teams can command high prices, while less fashionable companies may receive little attention.

He suggests some investors seeking cheaper seed rounds are looking for what would once have been called Series A. Pre-seed can still offer different opportunities, including from experienced founders, though Stebbings questions how common attractively priced rounds are for alumni of well-known companies.

Go sees opportunities in non-consensus companies that are not AI-branded and do not have famous founding teams. He expects some to become exceptional businesses, while also saying a higher price can be justified for truly outstanding founders. Stebbings gives an example of an enterprise software investment priced below the prior year’s market.

In the quick-fire round, Go praises Bryce Roberts’s Indie.vc for a different investment model, Benchmark for discipline and continuity, and Summit Partners for its growth strategy. He has changed his mind on AI and now wants portfolio teams to be comfortable using AI tools, even if not every company is an AI specialist.

He names partner David Beisel as a board member he would choose because of his judgment and trustworthiness. On DraftKings, the missed opportunity taught him to examine market-size assumptions carefully rather than dismiss an investment too quickly.

Go names Attentive as a major success and says an uncapped note, a structure the firm had previously avoided, changed his thinking. He wants venture to experiment more with ownership, economics, managers and the kinds of businesses it supports; his example does not state a realized return.

In five years, he hopes NextView can combine a stable, equal, partner-led seed investment model with a supportive founder community and enduring relationships. Stebbings closes the interview.

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