Bonus Episode: GTMfund Hires a New Partner!

Jason Demant just joined GTMfund as Partner, Head of Networks after 6 years at Foundation Capital where he reviewed over 1,000 emerging manager funds and invested in 100+.In this episode, Max (GP), Paul (GP), and Jason break down what separates the VC firms that survive from the ones that quietly die, why the best founders today are skipping mega funds at pre-seed, and what LPs are excited in about emerging managers.What we cover:

• The real reason raising from mega funds at pre-seed can backfire
• Why less than 10% of VC firms ever make it to Fund 3
• What makes an emerging manager fundable (sourcing, founder support, durability)
• The media flywheel that gives certain funds an unfair advantage
• How LPs should think about mega funds vs. emerging platforms (the barbell approach)
• Why founders are the ones now choosing their investors, not the other way around

Connect with Jason:   / jasondemant  

Connect with Max:   / maxaltschuler  

Connect with Paul:   / paulsirving  

GTMnow is the media extension of GTMfund, a venture capital firm investing in early-stage B2B companies. Every episode features operators, investors, and founders on the front lines of go-to-market.

Timestamps:

0:00 Intro

1:54 Jason's Background at Foundation Capital

3:07 Why Jason Chose GTMfund

4:35 How Media Has Evolved in the VC Ecosystem

6:20 What Separates Winning Emerging Managers from the Rest

8:28 GTM Fund's Flywheel: Fund, Community & Media

10:41 Building a VC Firm Is Like Building a Startup

12:31 Emerging Managers vs. Mega Funds (a16z, Lightspeed)

14:01 Why Top Founders Are Picking Emerging Managers for Early Rounds

The GTMnow Podcast
The GTMnow Podcast is a weekly podcast featuring interviews with the top 1% GTM executives, VCs, and founders. Conversations reveal the unshared details behind how they have grown companies, and the go-to-market strategies responsible for shaping that growth.

Visit gtmnow.com for more episodes and other interesting content. 

Transcript

SPEAKER_01 0:00

We've seen over a hundred emerging managers over the last few years.

SPEAKER_02 0:03

What sets the winners and the losers apart? First off, you've gotta want it. It is so incredibly hard to stand out when you're an emerging manager of pitching LP. Jason Demon is joining us as GTM Fund partner and Hetem Network.

SPEAKER_00 0:18

Jason, I'll kick it to you on what the journey was like at this point in the decision to join the fund.

SPEAKER_02 0:22

The combination of great people with a immediate superpower and the GTM operator network just makes the formula undeniable.

SPEAKER_00 0:32

We're seeing quite a bit of movement from investors, whether it's investors leaving to start their own firms or investors joining different firms.

SPEAKER_01 0:39

And Jason's raising 15 billion, light speed at 59. Where do you think emerging managers fit into this mega fund ecosystem?

SPEAKER_02 0:48

Founders are smart. I think they realize that raising money from these mega funds, raising$3.5 million, you're a call option for that.

SPEAKER_00 0:56

The running joke internally or is that one day we would be lucky enough to attempt to bring Jason on board full time.

SPEAKER_01 1:26

So usually every other week on the podcast, we're chatting about the market, what we're seeing with my partner, Paul Irving, and usually another investor. We've had Bill Binch on, we've had Brett Queener on, we've had Amanda Robson on, Alex Clayton, some amazing VCs so far. But this is a special episode because today we are announcing that we have a new partner. Jason DeMont is joining us as GTM Fund uh partner and head of networks. Welcome, Jason. Thank you so much. So excited. Yeah, it's a big moment for the fund and a big moment for our founders and our RLPs because you're gonna be bringing so much value to so many different areas of the of the firm. We've had this platform now since our inception, and it's always been kind of a part of a lot of people's jobs, never formally kind of you know a platform or a network or anything that we've you know staffed to this extent. And we had to be opportunistic. And you know, dating back a couple months ago, we got to talking, and it seems like it was a great time for both of us to make this move. So glad we did it. And uh today we're gonna talk a little bit about what you're bringing to the table here and what that means for you know our GTM fund family, and as well as kind of what we're seeing in the marketplace when it comes to emerging managers and some of these bigger funds. So I'll kick it over to Paul to fill in some blanks there.

SPEAKER_00 2:41

Yeah, we're very, very excited uh to be having Jason join us. You know, what's interesting about this is to me it mirrors so much of startup ecosystem generally, is it's so much work, it's long-term relationships, and then all of a sudden you have these incredibly important catalytic moments that change the face of a company, change the trajectory of a company, or change the trajectory of a firm. And we used to joke internally, um, we've gotten to know Jason for years now. The running joke internally is that one day we would be lucky enough to attempt to bring Jason on board full time. He ran the accelerator program at Foundation Capital. He was partner head of networks there uh six years, did some incredible work, ran the accelerator program, ran their emerging manager investing program, invested in over 100 emerging managers over a five-year period of time, helped run their executive network. So connecting the platform and all of the valuable nodes in the network at Foundation to Foundation founders, founder events, lots of stuff that he's built to zero to one if you're uh getting a little bit of a trend here. I mean, also just one of the smartest, most genuine, and strategic people that we've been lucky to work with over the years. He seemed to deeply understand the GTM fund mission when we pitched him on it back in like late 2022, been able to catch up monthly for you know multiple years in a row. And as Max alluded to, you're gonna be running some really important programs, gonna be running the platform side. So our network of go-to-market operators, founder events and programs, going to be supporting the fundraising side and LP relations and is going to be helping to build some of the most important programs that are part of the GTM fund platform as it scales. I know Jason isn't one for the spotlight, he's more of an uh executor and builder behind the scenes. So I'm putting him on the spot with some kind words right off the bat. But Jason, I'll kick it to you if you have any more details on what the journey was like to this point and the decision to join the fund.

SPEAKER_02 4:22

Appreciate both of your kind words, so flattering, humbling. It's such an honor to be working more closely with both of you and the rest of the GTM team. You know, as you mentioned, most of my time at foundation was spent, you know, in the emerging manager ecosystem, investing in emerging manager funds. And as I thought about you know my career and where I wanted the the next uh stage to be, there were very few names at the top of that list. And you were very clearly at the top of that list. And so it's wonderful. And obviously there's multiple angles here that you could think about with these sorts of things, whether it's personal growth, the interpersonal things with uh how we all get along. But I think the biggest factor for me is just putting my founder hat back on. Yeah, I've started a couple of companies previously, and anytime I was looking at an emerging manager or fund, the first thing I would ask myself is if I was a founder again, would this be the sort of firm that I would want on my cap table? And the answer for me with GTM fund was just such a resounding yes. I think the combination of you know great people with a media superpower and the GTM operator network just makes the formula undeniable. And the fact that you know the results have been so strong on fund one and fund two show the potential of all of that. And so that to me was really the uh the key to wanting to join you you all and really hopefully take all of it to the next level, of course.

SPEAKER_00 5:52

So yeah, on the on the media side, uh specifically, Jason, I kind of wanted to double-click on that because we talked about your background at Foundation Capital, but didn't mention, you know, you did work previously with the launch accelerator and Jason Calicanus and This Week in startups and that ecosystem in in the early days of it growing. Would love to know your just get your two cents on how you've seen media evolve in the VC ecosystem. Because obviously Jason in the This Week in Startups and Launch program did such a great job early on, I think ahead of where the market has gone the last little while.

SPEAKER_02 6:22

Yeah, I agree. And I was joking with our uh head of marketing, Sophie. My first job in startups and tech was selling podcast ads. Uh so uh things have things have come full circle a bit. You know, I was part of a launch in Jason, Jason's media company first, before there was a fund, before he was really that active as an angel investor. And the platform provided such immense opportunities from an investing, from a supporting founder perspective, that the whole investing part was a no-brainer. It was, you know, why would he leave these things on the table? And so seeing that in action and then subsequently having the fund, having the accelerator, and having again this flywheel between the whole thing just really worked. It helps on deal flow because you you're getting your thesis, you're getting uh your name out there, you're getting the whole firm out there. And then, of course, after you invest, to be able to bring those founders back onto the platform to help them with their first customers, to help them announce their fundraising, to help them recruit talent. It's really like the definition of a flywheel. And seeing you all operate, I could see that in full effect here too. And so it's a very powerful combination between the two.

SPEAKER_01 7:35

Excellent. I'm glad that's shining through. I know we've worked together for a little while now, but you know, you've got to see it from a lot of different angles. You know, you've seen over a hundred emerging managers over the last few years. You know, from your perspective, kind of what sets the winners and the losers apart and kind of what's the graduation rate from fund one to fund two from fund three from what you've seen to date? Yeah.

SPEAKER_02 7:55

I I'd love to hear your thoughts on this too. Obviously, being active emerging managers yourselves, I'm sure you've thought a lot about how do you make sure to survive beyond fund one and fund two. You know, I guess a few thoughts. A, the graduation rate is very low. Uh, I think there's, you know, fund one to fund two is sub 50%. Can you make it to fund three is obviously lower. Uh, you know, really making creating a generational firm is probably sub 10%, would be my guess. But the things that really stand out to me, having met with so many emerging managers, is first off, you've got to want it. It is so incredibly hard to stand out when you're an emerging manager pitching LPs. You know, I invested in a hundred funds. I saw hundreds and perhaps even a thousand or so over the time there. And man, it is just so hard to stand out and you know, in this in the 10-page slide deck that folks send it across to LPs. So, anyway, the like how do you stand out? There's probably two big things that come to mind. One is sourcing, of course. I think you can't just rely on a network, you've got to be a founder of a company with with folks spinning out, maybe a large angel investor uh with referrals. Obviously, a media following helps a lot, but it just has to be something that really is differentiated. And then the other big one that I saw folks uh really stand out is how they help founders, you know, helping your founders raise your next round and be a sounding board, total table stakes. Like every every investor says they do that, and I'm sure they're good at that. But can you make talent intros? Can you maybe a particular function? Can you help with customer intros? These are probably the two biggest things that founders want. Uh, media attention obviously helps too. These are the things that founders want beyond the obvious, and this is how I I've seen emerging managers stand out. So again, yeah, I'd love to how have you thought about standing out to, you know, making sure that you can go from fund one, fun two, fun three? We'll love how you guys think about this too.

SPEAKER_01 9:45

Yeah, definitely. I mean, we have a product person, my background in uh, you know, as an operator, and we think about our fund as a product, and because of that, we have our flywheel. So we have fund, community, and media. And each one of those powers the other one. I think it's imperative to have a flywheel and kind of whatever it is that you're doing, uh, you're marketing your fund, you're getting access to deals, you're doing diligence, you know, you're leveraging your community, your network to do that diligence, you're leveraging all the tentacles of ability to do research that you could possibly do. And then, you know, it's supporting your portfolio companies, whether that means promoting them, helping them sell, you know, whether them it's, you know, introducing them to one customer or teaching them how to go get many customers, whether it's introducing them to candidates, maybe those are account executives, maybe those are engineers, maybe those are executives. There's so many different things you can do to support those portfolio companies in a truly meaningful way. And I think, you know, each thing that we have, whether it's our community, our media, and our fund, allows us to spin that flywheel and do those things at a level that, you know, most funds can't. So if we have a portfolio company that's building their first customer community, we're able to tap in our GTM leader community and surface probably a dozen or so folks that have had experience building communities at scale that can go in and talk to that company. We had diligence on the Friday of Thanksgiving for a hardware company, and we were able to not like it's not an LP and R fund, but through an LPR fund, one degree of separation away, be able to get access to the CEO of a pretty big hardware company that's a perfect, not only fit for customer fit for the company we're diligenting, but perfect person for us to talk to be able to see if you know this is an investment we want to make. And then you ask our portfolio companies, go for it. But we're able to source a ton of candidates for them, customer intros for them, and really support them in a meaningful way across advice, you know, along their journey. So I think that's important to be able to do all those things. To your point about having prior networks, absolutely to be able to tap into networks or create networks, absolutely necessary. For us, it's about playing our game and finding kind of our grooves that line up well for us. And, you know, it's what what we've done well to this point.

SPEAKER_00 11:55

I I think you guys covered a lot of the really important ones, but to call back something, Jason, you mentioned at the top, it is amazing what a differentiator it is, the people who are really, really willing to put in the work, like who wants to do this. I think historically there's a sentiment that venture is what good operators do when they want to retire off into the sunset and hey, I'm just gonna invest. I helped, or founders, you know, built the company, sold the company. And you quickly realize just how incredibly competitive that this is in its own right. How you are not just investing, but you are building a startup, you are building a firm which has all of the characteristics of building a new company as well. There's competitors, there's a market, there's customers on either side of it, whether they're your LPs or the founders that you're servicing. You need to be differentiated, you need that differentiation to be defensible. I mean, all of those same principles are true. And the people who we see in the emerging manager ecosystem who do incredible work, who are not coincidentally at all the same people we hear from founders are their favorite people on the cap table, or the ones that are on planes or at events, like meeting founders in person, going the extra mile, getting on the phone late at night on a weekday, talking to the founders through the weekend and hustling. Cause at the end of the day, like our customers are our founders and they're working 120 hours a week often, and the least we could do is is try to match that intensity as we build our own firm. And then the second part about it, and you meant we we mentioned a few of those different things, is yeah, what's your differentiation? But what's also durable? Things like media, you can't just spin up overnight. Things like community that are truly genuine, you can't just spin up overnight. You know, being the alumni from a particular school is great, but is that durable and is that defensible when you talk about, you know, others who are maybe starting their own funds who might work a little. I mean, that stuff is is it's not really different than company building, at least. And I think those are the stuff that stands out to me when, or at least in the conversations we have internally about where we're building GTM fund and in the direction we want to take it.

SPEAKER_01 13:48

In a world where Andreesen's raising 15 billion, Lightspeed, I think is nine, and uh, you know, let's call it a handful of other funds are raising close to$10 billion funds. Where do you think emerging managers fit into this mega fund ecosystem?

SPEAKER_02 14:03

Yeah, it's definitely something we uh we thought a lot about foundation as well. You know, let's why don't we break this into two different parts? We'll talk about founders and we'll talk about LPs, the the whole ecosystem. So first on the founder side, founders are smart. I I think they realize that raising money from an Andreson, a Sequoia, an Excel, Lightspeed, these mega funds, raising three, four, five million dollars, you're a call option for them. They're doing that to to get access so that if you break out, they can put in 25, 50, 75 million dollars into a subsequent round. But there's a risk in that because if they don't follow on, then you've got everybody asking, hey, what is what does Sequoia know? What do they realize that that I don't? And they're the ones with the most insider access. And so I think founders realize there's a bit too much risk in doing that. And the other piece of this is who's gonna roll up their sleeves? If you're a call auction for uh a larger fund and that the partner that you're working with is on two dozen boards and has to run a firm and hire and do strategy, like all of these things, like they don't they don't have as much time. And so who has time? It's the emerging manager ecosystem. These are the founders of VC. These are the people that are hustling harder and gonna answer your call. They have more to they have more to lose, more to prove. And so, you know, I think founders today, the best founders pick their investors, and I think most founders today are picking emerging managers for those early rounds. How do you think founders think about this?

SPEAKER_00 15:37

I I think you've touched on a couple of points that we hear pretty often and in conversations that we have. And look, we're an emerging firm, so we're we'll talk our book here and and uh I'm happy to do so. But I think the last point that you mentioned is a really important one, and there's a sort of secondary part of it too, which is you know, we're seeing quite a bit of movement from investors, whether it's investors leaving to start their own firms or investors, you know, joining different firms, which is you know always going to be a characteristic of this ecosystem. But what you get with emerging managers is is these people are they are the firm. And you know, founders ask us too when we're talking about leading a pre-seed or leading a seed, they're like, How can I guarantee that you know you or Max is still gonna be here when I need your help five years from now? It's like we're going nowhere. Like, this is everything to us. We're we're sort of living and dying by, you know, not only every investment we make, but also the firm's success. And so I think when you have that level of alignment of incentives where, you know, we are only as successful as the support we provide, you know, our founders doing incredible work on the front lines of their business, you just get this deeper level of I think buy-in of effort, of showing up day in, day out, uh, if founders need you to. And I think that's especially important in the early days. I mean, as you grow, companies need different things and an incredible amount. I think the larger funds do provide a great product and service for the ecosystem as a whole. When a business is really working and you need capital and you need resources, it's incredible to have that optionality available to you. But in the earliest days when it's a little gritty and grimy and everyone's you know, who's gonna who's gonna go the extra mile for you? And I think that's where some of the emerging platforms can shine.

SPEAKER_01 17:11

And you can certainly have both, you know, in those early rounds, but also like go with emerging managers for your pre-seed seed, and then now you're raising from some of the bigger funds after that. And you know, when you have a$15 billion fund, putting a five million dollar check to work really doesn't move the needle. So getting to be able to make a call at a series A instead of a pre-seeder seed when you've got more information and there's you know, uh possibly uh first place and a second place that is, you know, becoming a parent, you can make one large bet on a first place horse versus picking too early and then maybe getting excluded from the rest of that category. So I think it makes sense on on many levels there.

SPEAKER_00 17:51

Jason, what do you what do you see on the LP side? I I know there's there's sort of two different layers to it. And and you sat in that seat as well, but it'd be interesting to know what what your takeaways were.

SPEAKER_02 17:59

Though there have been a bunch of studies and analysis that have come out that show that the emerging manager funds one through three have historically and consistently been the top performing funds from multiple vantages in a row. And if you're an LP, the opportunity to find a 5X, a 10X, a 20X fund with an Andreasen and Excel LightSpeed, it's just not going to happen. Obviously, there are positives about those because you could put larger checks to work, larger money to work. But if you're really focused on multiple, on the highest possible IRR, emerging managers within venture give you the largest likelihood to do that out of any asset class, not just venture, we're talking all privates, private credit, you know, across all asset classes. This is the part of the ecosystem with that potential. Now, from an LP perspective, the challenge of picking an emerging manager is not easy because there are so many. But if you're as an LP able to look through the broader ecosystem, identify those highest potential funds, that is your ability to get those largest possible outcomes. Again, curious, as you all have talked with LPs, how do you feel like they've thought about emerging managers versus more platform funds? What have you guys seen?

SPEAKER_00 19:15

What I hear more commonly, and if I was in an LP uh, you know, sitting in an LP seat, this is this is probably what I would do. Um, obviously, every institution is going to have its their own mandate and and you know rules of engagement around this, but an almost barbelled approach where if you need to deploy a certain amount of capital to the asset class, there is an advantage to being able to put a significantly larger check into some of these platform funds that have proven their ability to do it. I mean, proven their ability to back great generational companies and put quite a bit of money into them. Do you get the extra alpha, like you mentioned, Jason, the real chance at a five to 10x fund? I mean, that seems unlikely, but can you generate really high quality cash on cash and IRR-based returns? I think so. And so you would see this barbell approach where you have your sort of larger core checks that you write, and then you have a pocket of capital that's for the emerging platforms. Like, can you invest in the early days of first round or SUSE or Floodgate or some of these other great sort of seed funds today that were emerging platforms of yesterday and catch them when they they really are returning incredible, incredible multiples on capital and in at reasonable fund sizes? The difficulty is picking, and I think that's where the additional work for the dollars that you deploy equation comes into the fray. But if you're able to manage that properly, uh, that sort of barbell approach is the way I would look at it.

SPEAKER_01 20:30

Yeah, I agree. You know, I I do it in my personal portfolio kind of a similar way. It's like, what do you want to you've got kind of high risk, high reward buckets or higher risk, high reward buckets, and then you've got the growth stage opportunities where it's like you already know what this company is gonna do. There's revenue there, they're growing fast. And I think there's there's certainly a validity to saying, okay, well, look, let me go buy a basket of anthropic and open AI and SpaceX and a bunch of these kind of later stage growth stage things that I still think can multiply in value. Now, do I think that they have a hundred X potential from where they're at today? No. Ted X potential is even pretty hard. But like 5x potential, probably there. And, you know, maybe TEDx potential in a very, you know, long term, but you're probably not going to go to zero on any of those. Whereas early stage investing, you'll have more zeros, certainly, but you can thousand X. And, you know, that's kind of the beauty of it. That is why I love this so much. And I've been doing this as an angel since 2015 and now, you know, through the fund is because you get to support founders and be in the trenches with them from the early stages and watch them turn nothing into billion dollar companies. It's incredible. I mean, our Modest systems are such a good example of this. I mean, we invested when it was a pitch deck. Now they have containerized data centers in production. Like it, like it's it's out there in the world and working. And with that comes revenue and value, you know, and value growth, equity growth. But it's just so fascinating to see and be a part of, even if we are playing a rather small part in the journey. Anyway, with that, Jason, welcome to the team. Uh Uh if you're out there listening to this, definitely send him a note on LinkedIn. And yeah, stay tuned for future episodes of the GTM Now podcast, especially these special VC editions that we do. And uh, Paul, Jason, thank you so much. Pix. Pickball. Let's go. That was another fantastic episode of the VC series on the GTM Dow podcast. Head over to Apple, Spotify, or YouTube. Give us a like and subscribe. Well, we'll see you on the next.