👋 Hi Reader,

I am Renga and I run LetterStack.

I also invest in a number of startups through VC fund syndicates. What this means in simple terms is, I handoff a pot of money and then wait for 6-8 years for the (if it happens) payoff.

Now and then, I would get a quarterly/bi-annual update from the fund saying in as many words ‘your money is doing the work’.

And I am devastated to see that play out.

And apparently a lot of folks agree with that emotion, especially on LinkedIn.

Why? Two reasons.

VC Interest is running at a YoY low

With Claude, Clawd, and its misspelt cousins, the cost building a software product has come down to zero. A large portion of capital in the initial days of building a startup comes from hiring engineers and spending months building the product, so that cost is saved upfront with Claude Code and its brethren.

Natually early-stage founders would like to keep the alpha, so no one is beating down the doors of these VC funds, except for startups which need huge capex investment like a hardware startup.

Angel investments are a 6-8 year play

VC is a 6-8 year play.

Once an angel or limited partner in a fun has provided the capital to a venture fund, they are putting money into a void. The only thing convincing them to part with the money is the conviction of the general partner in that VC fund.

And there lies the rub.

The problem of long-term conviction on a bet, and the unwavering faith in that conviction.

A VC Fund Partner can solve both problems at once: by speaking to their angels and limited partners regularly.

Now all these angels and limited partners are immensely wealthy and busy people, so good luck getting them to attend an event or a Zoom call without prior trust built.

But a well-written weekly newsletter can do what the event or the call cannot: keep the bridge strong.

You want to let your investors know that the reason behind them investing the money continues to stay strong over 6-8 years, despite market conditions.

And that you have unwavering faith over your investment thesis, and here’s why:

By showing them what your portfolio is working on, behind the curtains.

Now all of these updates can be sent discreetly over a private invite-only setup, and need not be open to the public.

So my question is:

What’s stopping fund GPs from making the investor update deeply satisfying?

If you are one of these funds reading this and would like a sounding board on how to fix this problem with your newsletter, I would love to talk to you.

Let me know by hitting ‘Reply’ on this email, or send a note to marketing@letterstack.co.

This newsletter is sponsored by The Alien Design

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Cheers,

Renga from LetterStack

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