People used to think we were crazy.  Not many do now.  Let me explain.

Recently, my partner Eric and I met up with one of our major investors, to update them on what we’re up to.  This is is a very large institutional investor with a sophisticated view of the world.  They told us they are avoiding big funds and are increasingly looking for focused firms.

I think this is a big deal because it is a very large shift in the investor mind-set.  When we first started Kepha in 2006, most LPs were focused on a firm’s brand and the fundraising focus at that time was on large, global funds.  “It’s all about being in the top 15 VC brands,” is what we heard over and over and that it was risky to create a new firm.  Some thought we were crazy.

Fast forward a few years, and I think it’s a bit more balanced now.  Investors are more open to new firms.  The reality is that the VC industry is transitioning right now, and I think that’s healthy.

Wouldn’t it be odd if the industry that funded innovation was itself exempt from innovation?

I don’t know how the story will end for Kepha.  We are a new firm and the average holding period in our portfolio is 2 years as our companies are so young.  We certainly feel a lot of self-imposed pressure to produce.  But, we’re glad that investors no longer call us crazy.  We are also deeply grateful to our investors and entrepreneurs.