When IVP not too long ago introduced the closing of its 18th fund, I known as Eric Liaw, a longtime basic companion with the growth-stage agency, to ask a number of questions. For starters, wringing $1.6 billion in capital commitments from its buyers proper now would appear much more difficult than garnering commitments in the course of the frothier days of 2021, when IVP introduced a $1.8 billion car.

I additionally questioned about succession at IVP, whose many bets embrace Figma and Robinhood, and whose founder and earlier buyers nonetheless loom giant on the agency – each figuratively and actually. A latest Fortune story famous that photos of agency founder Reid Dennis stay scattered “in all types of locations all through IVP’s San Francisco workplace.” In the meantime, photos of Todd Chaffee, Norm Fogelsong and Sandy Miller – former basic companions who at the moment are “advisory companions” – are blended in with the agency’s basic companions on the agency’s web site, which, visually no less than, makes much less room for the present technology.

Not final, I needed to speak with Liaw about Klarna, a portfolio firm that made headlines final month when a behind-the-scenes disagreement over who ought to sit on its board spilled into public view. Right here’s a part of our chat, edited for size and readability. You’ll be able to hearken to the longer dialog as a podcast right here.

Congratulations in your new fund. Now you’ll be able to calm down for a few months! Was the fundraising course of any kind of troublesome this time given the market?

It’s actually been a uneven interval all through. In the event you actually rewind the clock, again in 2018 once we raised our sixteenth fund, it was a “regular” atmosphere. We raised a barely larger one in 2021, which was not a standard atmosphere. One factor we’re glad we didn’t do was elevate an extreme quantity of capital relative to our technique, after which deploy all of it in a short time, which people in our trade did. So [we’ve been] fairly constant.

Did you’re taking any cash from Saudi Arabia? Doing so has develop into extra acceptable, extra widespread. I’m questioning if [Public Investment Fund] is a brand new or current LP. 

We don’t usually touch upon our LP base, however we don’t have capital from that area.

Talking of areas, you had been within the Bay Space for years. You might have two levels from Stanford. You’re now in London. When and why did you make that transfer?

We moved about eight months in the past. I’ve really been within the Bay Space since I used to be 18, after I got here to Stanford for undergrad. That’s extra years in the past than I care to confess at this level. However for us, enlargement to Europe was an natural extension of a method we’ve been pursuing. We made our first funding in Europe again in 2006, in Helsinki, Finland, in an organization known as MySQL that was acquired subsequently by Solar [Microsystems] for a billion {dollars} when that was not run of the mill. Then, in 2013, we invested in Supercell, which can be primarily based in Finland. In 2014, we grew to become an investor in Klarna. And [at this point], our European portfolio in the present day is about 20 firms or so; it’s about 20% of our energetic portfolio, unfold over 10 totally different international locations. We felt like placing some ft on the bottom was the suitable transfer.

There was lots of drama round Klarna. What did you make of The Data’s stories about [former Sequoia investor] Michael Moritz versus [Matt Miller], the Sequoia companion who was extra not too long ago representing the agency and has since been changed by one other Sequoia companion, Andrew Reed?

We’re smaller buyers in Klarna. We aren’t energetic within the board discussions. We’re enthusiastic about their enterprise efficiency. In some ways, they’ve had the worst of each worlds. They file publicly. They’re topic to lots of scrutiny. Everybody sees their numbers, however they don’t have the forex [i.e. that a publicly traded company enjoys]. I feel [CEO and co-founder] Sebastian [Siemiatkowski] is now rather more open about the truth that they’ll be a public entity sooner or later within the not-too-distant future, which we’re enthusiastic about. The reporting, I assume if correct, I can’t get behind the motivations. I don’t know precisely what occurred. I’m simply glad that he put it behind them and may give attention to the enterprise.

You and I’ve talked about totally different international locations and a few of their respective strengths. We’ve talked about client startups. It brings to thoughts the social community BeReal in France, which is reportedly searching for Sequence C funding proper now or else it would possibly promote. Has IVP kicked the tires on that firm?

We’ve researched them and spoken to them prior to now and we aren’t at the moment an investor, so I don’t have lots of visibility into what their present technique is. I feel social is tough; the prize is very large, however the path to get there may be fairly onerous. I do suppose each few years, firms are capable of set up a foothold even with the energy of Fb-slash-Meta. Snap continues to have a robust pull; we invested in Snap fairly early on. Discord has carved out some house out there for themselves. Clearly, TikTok has achieved one thing fairly transformational around the globe. So the prize is massive but it surely’s onerous to get there. That’s a part of the problem of the fund, investing in client apps, which we’ve achieved, [figuring out] which of those rocket ships has sufficient gas to interrupt via the environment and which is able to come again right down to earth,

Relating to your new fund, that Fortune story famous that the agency isn’t named after founder Reid Dennis as proof that it was constructed to survive him. But it additionally famous there are photos of Dennis in every single place, and others of the agency’s previous companions, and now advisors, are very prominently featured on IVP’s website. IVP talks about making room for youthful companions; I do surprise if that’s really occurring. 

I’d say with out query, it’s occurring. We’ve a robust tradition and custom of offering folks of their careers the chance to maneuver up within the group to the best echelons of the final partnership. I’m lucky to be an instance of that. A lot of my companions are, as properly. It’s not completely the trail on the agency, but it surely’s an actual alternative that folks have.

We don’t have a managing companion or we don’t have a CEO. We’ve had folks enter the agency, serve the agency and our LPs, and likewise as they get to a unique level of their lives and careers, take a step again and transfer on to various things, which by definition does create extra room and accountability for people who find themselves youthful and now are reaching that prime age of their careers to assist carry the establishment ahead.

Can I ask: do these advisors nonetheless obtain carry?

You’ll be able to ask, however I don’t wish to get into economics or issues alongside that dimension. So I’ll quietly decline [that question]. However we do worth their inputs and recommendation and their contributions to the agency over a few years.

There’s clearly a valuation reset happening for each firm seemingly that’s not a big language mannequin firm, which is lots of firms. I’d guess that offers you simpler entry to prime firms, but additionally hurts a few of your current portfolio firms. How is the agency navigating via all of it?

I feel when it comes to firms which are elevating cash, those which are most promising will at all times have a selection, and there’ll at all times be competitors for these rounds and thus these rounds and the valuations related to them will at all times really feel costly. I don’t suppose anybody has ever reached an amazing enterprise final result feeling like, ‘Man, I received a steal on that deal.’ You at all times really feel barely uncomfortable. However the perception in what the corporate can develop into offsets that feeling of discomfort. That’s a part of the enjoyable of the job.