Dallas Bound and Institutional LPs (Are you in the IRR or AUM game?!)

I am sitting at the gate for my departing flight to Dallas at the Phoenix airport. This is my first trip to Texas this year and I am excited to see what the Dallas startup scene is all about. So happy to not have to wear a mask. I also bought a water at a self checkout store in the airport. They used video AI/ML technology to process my items. Finally AI applications that are commercialized! It was like seeing bigfoot.

I decided to cover Dallas in my deal sourcing efforts because I feel the area has similarities with the Phoenix market. There is tons of urban sprawl, no real seed capital that is leading $2-$5M rounds, and it is a business friendly environment. I have a thesis that I can win deals in the market - but it is only a thesis.

Yesterday I attended the LiftAZ, a conference for fund managers, institutional LPs and family offices. It was quite a learning experience. For one thing- bowties are back in apparently. The rest of the learnings included what institutional and family offices are looking for in fund managers -what they want is great terms, co-investment opportunities, and control. I guess it falls in line with the golden rule- those who have the gold make the rules.

This encounter reminded me of something I heard on a podcast once. The person said you can either play one of two games in private equity/vc : the AUM game or the IRR game. This statements meaning is that you can either optimize your income on the 2% of management fees or the 20% of the profits. At DWP I want to have the best IRR on a risk adjusted basis.