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Homebrew’s Hunter Walk & Satya Patel: Why $100M is Not Enough to Execute a Seed Strategy | 20VC #972

Hunter Walk and Satya Patel are Co-Founders and Partners @ Homebrew, one of the leading seed funds of the last decade. Following 10 years of stellar returns with investments in the likes of Chime, Plaid, Gusto and many others, they decided to not accept any further LP capital and to only invest their own money moving forward through Homebrew Forever. --------------------------------------------- In Today’s Discussion on Homebrew We Breakdown: 1. ) The Foundings of a Great Partnership: What was the moment when Hunter and Satya decided they were going to go out and raise their first fund with Homebrew I? What are the core principles that all founding partners need to align on before they start a firm together? What questions should they ask of each other? Why does being independently wealthy coming into a partnership make the partnership easier and more efficient to operate? What changes when the partners have money already? 2.) What Changes When Moving From LP Dollars to Personal Capital: Why did Hunter and Satya decide to not raise any further capital from external LPs? Asset allocation-wise, how did they determine how much is the right amount to set aside for the first 2 years of investing? How many investments do they want to make with that cash? How does investing their personal capital change their deployment pace and cadence? How does it change their approach to reserves management and follow-on financing? How does it change their approach to pricing? How price sensitive are they today? 3.) Analyzing the Seed Landscape Today: Why do Hunter and Satya not think that a $100M seed fund is enough to properly execute a world-class seed strategy today? Who is their competition with the new strategy? How does it change their relationship with large multi-stage funds? How does it change their relationship with seed funds? Do they agree that the last generation of sub $20M micro-funds will not raise another fund in this cycle? How did their entrance impact the seed landscape over the last few years? Why are LPs also to blame for many of the original seed managers raising larger and larger funds? 4.) Companies: Money and People are The Problem: Why has too much money been such a problem for many Homebrew portfolio companies over the last few years? How has too much money changed their execution plans? What happens to the “living dead” companies with many years of runway but no product market fit? Who does this market cater to well? Who will thrive in this market? What have people forgotten about both startups and venture in the last 2 years that we have to remember? Why is this generation so entitled and expectant? Why are startups not a get-rich-quick scheme? ---------------------------------------------------------- Subscribe to the Podcast: https://www.thetwentyminutevc.com/homebrew Follow Harry Stebbings on Twitter: https://twitter.com/HarryStebbings Follow Satya Patel on Twitter: https://twitter.com/satyap Follow Hunter Walk on Twitter: https://twitter.com/hunterwalk Follow 20VC on Instagram: https://www.instagram.com/20vc_reels Follow 20VC on TikTok: https://www.tiktok.com/@20vc_tok -------------------------------------------------------- #HunterWalk #SatyaPatel #Homebrew #HarryStebbings #venturecapital

Harry StebbingshostHunter WalkguestSatya (Sachi) Patelguest
Jan 30, 20231h 22mWatch on YouTube ↗

At a glance

WHAT IT’S REALLY ABOUT

Why Homebrew Ditched LP Money And Rethought Seed-Stage Venture Economics

  1. Hunter Walk and Satya Patel reflect on 10 years of building Homebrew as a deeply equal, two‑person partnership, explaining how deliberate alignment on values, definitions of success, and economics prevented the usual GP conflicts.
  2. They walk through their decision to stop raising institutional funds and instead invest their own capital in smaller, flexible checks, arguing that a $100M seed fund is now a strategic “tweener” that forces unwanted behaviors.
  3. The conversation covers how they structure consensus-based investing, handle LP expectations, think about founder liquidity and salaries, and manage reserves, secondaries, and markups in both boom and downturn markets.
  4. They close by assessing the current venture environment, why many 2021–2022 unicorn employees may see little equity value, and how money, when it removes basic stress, enables—rather than defines—success and happiness.

IDEAS WORTH REMEMBERING

5 ideas

Design the partnership before you design the fund.

Walk and Patel spent extensive time aligning on definitions of success, roles, energy-giving vs. energy-draining work, and equal economics before raising capital, which they credit with avoiding the interpersonal breakdowns that kill many firms.

Consensus works for very small, truly equal partnerships.

With only two GPs and no deal attribution, Homebrew requires both to be “above the yes threshold” on every deal, which unifies them in front of founders and LPs; they argue their real misses were lack of access, not consensus vetoes.

At seed today, $100M is a strategic no-man’s land.

They argue a $100M seed fund is now too big for flexible, small-ownership, experimental investing and too small to consistently lead and own enough; managers should either go bigger and build a firm—or smaller and embrace flexibility.

Using your own capital changes your constraints but not your bar.

By self-funding 100–500K checks, they drop rigid ownership/fee math and can be price-agnostic in a mechanical sense, but they keep venture-scale outcome expectations and care more about round quality, lead investors, and financing dynamics.

Be explicit and humane about founder and employee economics.

They advocate frank discussions about founder salaries and modest secondaries to reduce stress so founders can perform, while condemning excessive early cash-outs and reminding employees to question whether they will actually share in upside.

WORDS WORTH SAVING

5 quotes

If it doesn’t feel right before you write the check, it definitely doesn’t get better after.

— Satya Patel (as recalled by Hunter Walk)

Our goal was never to maximize fees. We wanted to design a model at the intersection of success and happiness.

— Hunter Walk

At the seed stage today, a $100 million fund is a bit of a tweener.

— Satya Patel

Over the last decade people forgot this is a relationship-driven business, not a transactional business.

— Hunter Walk

Success is having the freedom to spend my time the way I want, with the people I want, and leaving those people and the world better than I found them.

— Satya Patel

Formation and structure of the Homebrew partnershipConsensus decision-making, no-deal-attribution, and equal economics between GPsTransition from institutional LP capital to investing their own moneyFund sizing, ‘tweener’ seed funds, and implications for strategy and ownershipFounder compensation, secondary liquidity, and honest conversations about moneyPortfolio management, reserves, secondaries, and marking portfolios in volatile marketsMacro venture landscape: post‑boom corrections, unicorn resets, and employee equity

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