Beezer Clarkson: Are LPs Open for Business & Why Do LP Incentive Mechanisms Need to Change? | E1073

ℹ️ EPISODE INFO

Released

October 18, 2023

Duration

1h 0m

Channel

The Twenty Minute VC

Watch on YouTube

▶ Open ↗

📝 EPISODE DESCRIPTION

Beezer Clarkson leads Sapphire Partners‘ investments in venture funds domestically and internationally. Beezer has invested in some of the best firms of a generation including USV and Point Nine to name a few. Beezer began her career in financial services over 20 years ago at Morgan Stanley in its global infrastructure group. Prior to joining Sapphire in 2012, Beezer managed the day-to-day operations of the Draper Fisher Jurvetson Global Network, which then had $7 billion under management across 16 venture funds worldwide. ----------------------------------------------- Timestamps: (0:00) Intro (00:22) Introductory Remarks and Setting the Stage (01:07) Perspectives on LP Portfolios (20:57) The Landscape of Large Funds (25:08) Dynamics between Founders and Investors (40:36) Fund Management: Fees and Commitments (44:14) Relationship Dynamics: Managers and LPs (49:28) Quick-Fire Round ----------------------------------------------- In Today’s Episode with Beezer Clarkson We Discuss:

1. LP Landscape: WTF is Going On: Are LPs really all closed for business? What has changed in what LPs want to see from managers they are looking to invest in? What has changed about the size and pace of new commitments for LPs? Are all LPs moving away from growth?

1. 2020-2022: Years in Review: Are LPs frustrated by managers who reduced deployment timelines to 12-18 months? Are LPs frustrated with managers who did not take liquidity when they could have done? How does Beezer advise managers on when and how to take liquidity in their best positions? Are managers accurately marking their portfolios to their LPs today? Why does Beezer believe the incentive mechanism for LPs is broken today in many ways?

1. How To Build a Top Decile Firm: Why does Beezer believe if you want to have the best returns, you have to have one company that returns the fund? Can you not do it with multiple half-fund returners? Is ownership core to all the best firm’s top performance? Is it the size of outcome or the size of ownership that drives the best performance across the board? What does data show on how the best funds take significant risk? What are their loss ratios? What are the core tradeoffs to Beezer between scaling AUM and providing top decile returns?

1. LP Markets: The Times They are a Changing: Does Beezer believe LPs will remain cold on large $1BN+ growth firms? Which segments of the market are hot? Which are cold? What are the most significant changes we will see in the LP markets moving forward? Is today the new normal or are we in a downturn that we will come out of? ----------------------------------------------- Subscribe on Spotify: https://open.spotify.com/show/3j2KMcZTtgTNBKwtZBMHvl?si=85bc9196860e4466 Subscribe on Apple Podcasts: https://podcasts.apple.com/us/podcast/the-twenty-minute-vc-20vc-venture-capital-startup/id958230465 Follow Harry Stebbings on Twitter: https://twitter.com/HarryStebbings Follow Beezer Clarkson on Twitter: https://twitter.com/Beezer232 Follow 20VC on Instagram: https://www.instagram.com/20vc_reels Follow 20VC on TikTok: https://www.tiktok.com/@20vc_tok Visit our Website: https://www.20vc.com Subscribe to our Newsletter: https://www.thetwentyminutevc.com/contact ------------------------------------------- #BeezerClarkson #SapphireVentures #venturecapital #20vc #HarryStebbings

🎤 SPEAKERS

• Beezer Clarkson

  guest

• Harry Stebbings

  host

• Narrator

  other

🧾 EPISODE SUMMARY

In this episode of The Twenty Minute VC, featuring Beezer Clarkson and Harry Stebbings, Beezer Clarkson: Are LPs Open for Business & Why Do LP Incentive Mechanisms Need to Change? | E1073 explores lPs Rethink Venture: Power Laws, Liquidity Crunch, and Misaligned Incentives Beezer Clarkson, who leads Sapphire Partners, discusses how LPs are navigating today’s tougher venture environment, emphasizing the centrality of power-law outcomes and the difficulty of achieving outperformance without true fund-returners. She explains why LPs are slowing commitments, dealing with liquidity pressures, and re-evaluating fund sizes, pacing, and relationships with GPs after the 2020–2022 boom. The conversation digs into structural misalignments—like TVPI-based compensation, oversized management fees, stapled opportunity funds, and early secondaries for DPI—that shape GP and LP behavior. Clarkson also highlights where LP demand is shifting (toward “Goldilocks” mid-sized funds), how emerging managers graduate or fail, and why incentive mechanisms and transparency need to evolve.

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