The Twenty Minute VC

Mo Koyfman: The Secret to Winning in Venture; Why Small Funds Outperform Large Funds | 20VC #915

Mo Koyfman is the Founder and General Partner @ Shine Capital, who announced earlier this year Shine II, a $200M early-stage fund, and Shine Opportunities I, a $100M vehicle. Prior to founding Shine, Mo was the Managing Member @ Moko Brands where he made angel investments in Coinbase, Polychain, Harry’s to name a few. Before Moko, Mo spent over 7 years as a General Partner @ Spark Capital where he made investments in Plaid, Warby Parker, Skillshare and Hivemapper, to name a few. Finally prior to Spark, Mo spent over 5 years at IAC where he oversaw group of companies that included Connected Ventures, parent of Vimeo, CollegeHumor & BustedTees. ------------------------------------------- Timestamps: 00:00 Intro 00:39 How did you get into venture? 07:45 Biggest takeaways from time with Spark Ventures 10:59 Strong opinions, weakly held 15:11 Do you have mentors who challenge you? 16:52 Getting bigger is inversely correlated with getting better 19:33 How big is Shine Ventures today? 24:39 Reserves and allocation in the face of unknowns 27:35 Thoughts on Pro Rata and VC competition 32:38 Communicating with founders about Pro Rata 35:40 What do you think about ownership percentage? 42:16 Collaboration in venture - lowest it’s ever been? 47:44 Biggest lessons from successes and failures 51:43 How do you advise early stage founders on taking VC money? 55:01 Favorite book and why? 55:23 Keys to a phenomenal burger 56:35 What do you know now that you wish you knew then? 57:35 What do you wish you could change about venture? 1:00:08 The next 5 years for you and for Shine Ventures. ------------------------------------------- In Today’s Episode with Mo Koyfman: 1.) From Entrepreneurial Parents to IAC, Spark Capital and Founding Shine: How did Mo make his way into the world of venture having worked with Dara Khros, Barry Diller and Jeremy Liew? What were some of the biggest takeaways from his time with Barry Diller and IAC? How did Mo’s time at Spark impact his investing mindset? What did he learn that he took with him to founding Shine? 2.) Investment Firm vs Investment Partnership: What are the biggest differences between investment firms and investment partnerships? What are the biggest risks founders are taking when they take money from investment firms? Mo has very strong beliefs, how does he manage and inspire debates within his firm without shutting down or intimidating younger, less experienced team members? What does Mo mean when he says, “firms are great but partners matter”. 3.) How To Win in Venture: Why does Mo always believe that small funds outperform large funds? What have been some of Mo’s biggest lessons from Fred Wilson on fund strategy and sizing? How much of an emphasis does Mo place on the importance of ownership? Why does Mo believe the way to win in venture is to be collaborative? Why does Mo believe in the macro conditions we are entering, the landscape is about to become a lot more collaborative? Why does Mo believe any firm that says they will always do their pro rata is lying? 4.) The Lessons: Success and Failure: What are some of Mo’s biggest lessons from his biggest wins, like Plaid at seed? That said, why does Mo believe it is so dangerous to try and learn lessons from the wins? What failures have been most impactful to Mo? What did he take away from them? Why does Mo believe that making great burgers is like building great companies? Items Mentioned in Today’s Episode: Mo’s Favourite Book: Portnoy’s Complaint by Philip Roth ------------------------------------------- #VentureCapital #venturecapitalist #MoKoyfman #HarryStebbings #20VC #FredWilson #ShineCapital #prorata

Mo KoyfmanguestHarry Stebbingshost

Aug 7, 20221h 0mWatch on YouTube ↗

WHAT IT’S REALLY ABOUT

Mo Koyfman Reveals Why Small, Focused Venture Funds Outperform Giants

Mo Koyfman, founder of Shine Capital and former Spark Capital partner, explains how his background, career at IAC and Spark, and deep love for early-stage company building led him to start his own New York–based firm.
He argues that small, constrained funds typically outperform large early-stage funds because constraints enforce discipline in deal count, check size, and follow-ons, while large pools of capital encourage undisciplined investing.
Koyfman details Shine’s approach to structure (clear leadership, meritocracy), portfolio construction (concentrated, ownership-focused), and reserves (“deserves,” not automatic pro rata), emphasizing rigorous decision-making and honest communication with founders.
He contrasts boutique early-stage investors with multistage megafunds, urging founders to choose investors for whom their company truly matters, and predicts a shakeout of “tourist” capital as excess money leaves the ecosystem.

IDEAS WORTH REMEMBERING

5 ideas

Smaller, constrained early-stage funds often produce better returns.

Koyfman argues that when fund size is limited, managers are forced to be selective about deal count, check size, and follow-ons, avoiding the “YOLO” mentality that plagues overcapitalized early-stage funds.

Fund structure and governance materially impact decision quality.

He prefers an investment-firm model with clear leadership, defined roles, and meritocracy over broad partnerships, which can complicate investment and personnel decisions and dilute accountability.

Treat reserves as “deserves,” not entitlements.

Shine does not pre-allocate reserves deal-by-deal; instead, it keeps a fund-level reserve pool and allocates follow-on capital to companies that truly earn it, reducing the tendency to throw good money after bad.

Ownership still matters—if you’re a picker, not an indexer.

Because Shine does 10–12 deals a year and leads/co-leads, it targets double-digit ownership (often around 10–12%) so that winners can materially move the fund, in contrast to high-volume, low-ownership indexing strategies.

Honest, sometimes painful feedback is ultimately a gift to founders.

Koyfman maintains that telling founders when a business is unlikely to work—and advising either a hard pivot or an orderly wind-down—can save them years of wasted effort and increase the odds of future backing.

WORDS WORTH SAVING

5 quotes

Larger early-stage funds always lead to lesser returns over time.

— Mo Koyfman

I live my life by a very simple moniker: strong opinions, weakly held.

— Mo Koyfman

They’re not reserves, they’re deserves.

— Mo Koyfman (via Todd Dagres)

The more an investment matters to an investor, the better investor they will be for you.

— Mo Koyfman

The best thing you can do for an entrepreneur who is working on a business that you know is not going to work is to tell them, in the nicest way possible, why.

— Mo Koyfman

Mo Koyfman’s personal and professional journey into venture capital and founding ShineFund structure: partnerships vs clear-leadership investment firms and internal governanceWhy smaller, constrained early-stage funds can outperform larger fundsPortfolio construction, ownership strategy, and use of opportunity fundsReserves philosophy: “deserves” vs fixed reserves and nuanced pro rata decisionsFounder–investor alignment, syndicate building, and the impact of megafundsMarket cycles, overcapitalization, and the coming rationalization in venture

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