Venture Capital/Interview/

Podcaster-turned-VC Harry Stebbings raises two funds totalling $140m

The boy wonder has raised one of the biggest funds run by a solo VC partner of all time — and landed an impressive set of LPs.

By Amy Lewin

Harry Stebbings

Earlier this year, podcaster-turned-VC Harry Stebbings went through his first big breakup.

He told his partner Fred Destin that he wanted out of Stride, the VC firm they’d set up together in 2018, so he could focus on his own fund, 20VC. And Destin told the world via a somewhat amusing Twitter thread.

“I’ve never broken up with anyone — my dating life is woeful — so it was really tough to do,” says 24-year-old Stebbings, who has built an impressive network amongst VCs in Europe and Silicon Valley via his popular podcast, The Twenty Minute VC.

He’s moved on pretty quickly though. Today, Stebbings is announcing that he’s now raised two 20VC funds — a $33m early-stage fund and another $107m growth fund — which he will lead as a solo general partner. That’s one of the biggest solo VC partner funds either side of the Atlantic.

His investors are a notable bunch too, including institutional investors MIT and RIT Capital Partners; founders of many tech companies, from Atlassian, Unity and Mercado Libre to Calm, Alan, Rappi, Hopin and Nubank; alongside prominent VCs and angels, like Index’s Danny Rimer and Prima Materia’s Shakil Khan.

So what magic do they see in this boy wonder?

It’s all about the network

The simple answer is the network he has built up through his podcast. Since launching in 2015, he’s produced over 2.6k episodes and regularly speaks to the kind of founders and investors folks in the tech industry would kill to sit next to at a dinner party — people like Spotify’s Daniel Ek and Coinbase’s Brian Armstrong. (Women are, however, notably few and far between on the guestlist.)

These days, that means his inbox is full of investors and founders sharing deals they’re interested in — as well as PRs pitching their clients to appear on a show (“a nightmare for my email”).

He reckons he sees between 25 and 40 “high-quality, vetted” deals per week. Dealflow comes from two sources: “Rounds coming together and people [bringing me] in proactively, or me finding something interesting and being proactively outbound on that market.”

As far as outbound goes, at the moment (post-fundraise) his focus is on the KYC and AML (know your customers and anti-money laundering) sectors: “It’s a completely broken industry.”

When other investors invite Stebbings to join a round, the motivation is simple: he’s a pretty useful PR machine.

“I bring something very different.”

“A lot of times a Series B or C [stage startup] approaches us — or their investors do — and say, ‘Hey, we’re thinking about distribution, the content machine, the founder brand…’ and then I write a $3-5m cheque in a $30-50m round,” he explains. “It’s a small part, but it’s super collaborative, and I bring something very different.”

He says he can also bring something to the due diligence process. “Because of all the shows and relationships, if we’re looking at a payments infrastructure business, we can speak to the founding team at Stripe or Nubank [an LP in the fund] and pull in the best minds to help me analyse this business. I bring my thesis, and they improve it with theirs. They meet the coolest companies, and the founders go, ‘Oh my god, we’re meeting the founder of Nubank.’ It helps on both sides of the table, and we can really win deals because of that.”

Collaborate, not compete

It’s the focus on collaborating, rather than competing, which really sets 20VC aside from Stride, says Stebbings. Unlike Stride, 20VC does not lead deals and does not take board seats.

“I don’t love being on the board. I love founders calling me up at midnight. Being on the board is difficult — you lose that intimacy,” he says.

From the $33m early-stage fund, Stebbings will write cheques of $250-500k in a $3-4m seed round. From the $107m later-stage fund, he’ll be writing cheques of $3-5m in $30-50m Series B or C rounds, “in the very best companies” from Europe and the US.

He’s also not planning on expanding his team massively. He already has a head of finance — “it’s important to build the best LP product as well as the best founder product” — and he’s currently hiring a head of operations and an executive assistant. But that’ll be it.

“The trouble with teams is you need to create culture, you need to manage, do 1-1s, reviews, give feedback… and anything that takes me away from meeting the next Stripe or Hopin, that time could be used meeting companies.”

The best founders

Stebbings thinks that great founders are often “systems thinkers” — “they view the business in component parts, and each one unlocks the next one”. Take Johnny Boufarhat at Hopin (one of those founders who would call him up at midnight): “The events platform is just one element of the product that unlocks a lot more.”

Turnoffs include founders who lack ambition, who try to cover things up and who aren’t great at fundraising (“it’s part of their job”), he says.

“A fundraise is like a science experiment — you’re not raising money to meet a timeline, you’re raising it to try to prove a set of hypotheses you have”

“A fundraise is like a science experiment — you’re not raising money to meet a timeline, you’re raising it to try to prove a set of hypotheses you have,” he says. “‘What are you trying to prove or disprove with this round?’ The answers will show how well you understand the business and funding environment.”

Leadership skills aren’t so important — although if they don’t have them, they need to be figuring out how to gain them. “What is their rate of growth to becoming a great leader? How do they think about putting a structure in place to grow into their leadership?”

The long game

Meanwhile Stebbings — still a relatively new kid on the block in VC — says he’s learning how to be a great fund manager via his LPs.

“Danny [Rimer], one of the very best VCs of our generation, is a mentor to me. He’ll say, ‘Harry, your deploying pace is too fast, or you’re sizing too big’.”

As for what he needs to learn, he thinks it’s “mental plasticity” — changing strategy based on what the market is up to, especially given the emergence of fast-deploying funds like Tiger.

“Bluntly, Tiger has changed the game for venture. Now funds are deployed in 12 months — and you have to play the game on the field.”

But he’s confident that investing is his true calling.

“I don’t consider myself a media person, I’m an investor first. I love the podcast, now I love being a VC — but I always wanted to be a VC.”

Amy Lewin is Sifted’s deputy editor. She covers VC, foodtech and diversity in tech, and tweets from @amyrlewin. She’s the coauthor of our weekly Startup Life newsletter, which you can subscribe to here.

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