The Twenty Minute VCRyan Akkina: How MIT Builds Their Venture Fund Portfolio & How MIT Approach Direct Investing | E1109
At a glance
WHAT IT’S REALLY ABOUT
Inside MIT’s Endowment: How Ryan Akkina Selects and Backs VCs
- Ryan Akkina of the MIT Investment Management Company explains how MIT builds and manages its venture fund and direct co‑investment portfolio in a much more competitive, complex venture landscape. He outlines their evaluation framework for managers (“see, pick, win, serve”), the challenges of sizing commitments, staying loyal while funds scale, and deciding when to pare back or stop re‑upping. Akkina also details MIT’s growing use of direct co‑investments, the importance of structure and price discipline, and the incentive misalignments within traditional endowment models. Throughout, he reflects on mistakes (errors of omission like OpenAI, and bad direct bets), the half‑life of all venture firms, and what it now takes for emerging managers to successfully raise from top LPs.
IDEAS WORTH REMEMBERING
5 ideasTop LPs now evaluate VCs on ‘see, pick, win, and serve,’ with winning and servicing increasingly decisive.
Many GPs can access deal flow and make good picks, but sustained access to iconic companies requires repeatedly winning allocations and being a strong, referenceable partner to founders.
Fund size and growth speed can quietly destroy a previously great firm’s edge.
When managers raise too much, too fast, they’re pushed out of their historical sweet spot; combined with success‑driven arrogance or fading motivation, this often causes once‑excellent firms to go sideways.
Track record matters less for emerging managers than qualitative factors and founder references.
For new funds, MIT emphasizes likability, founder fit, work ethic, and early angel track records over backward‑looking fund metrics, because early performance data is sparse and noisy.
Direct co‑investments are attractive when MIT already knows the company and can secure protective structures.
Deals like Coupang and Rippling worked for MIT because they had a ‘prepared mind,’ trusted the lead GP, and invested via senior or otherwise well‑structured instruments that limited downside while preserving upside.
Endowment incentive structures are poorly aligned with taking smart risk, especially in directs.
Akkina openly notes that traditional endowment compensation gives staff little economic upside from big wins, so only strong culture and leadership can motivate people to pursue higher‑effort, higher‑impact co‑investments.
WORDS WORTH SAVING
5 quotesWhen things are going well, you're never as smart as you think you are, and when things are going poorly, you're never as dumb as you think you are.
— Ryan Akkina
Every firm, no matter how great, has a half-life. No firm is gonna be great forever.
— Ryan Akkina
Frankly, if people have a spell of success, sometimes they become arrogant. They start to make worse decisions and treat people worse.
— Ryan Akkina
Our scarcest resource is our time. Figuring out how you allocate that is really the first constraint; everything else flows from that.
— Ryan Akkina
Honestly, I think the answer is no. The traditional endowment or foundation doesn’t have an incentive to be good at this stuff.
— Ryan Akkina (on whether endowment incentives are ‘right’)
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