Today I listened to Marcelo Claure and Shu Nyatta discuss their new growth-stage fund, Bicycle Capital. Both of them had spent several years investing at SoftBank’s $7.6 billion Latin America Fund (source).

Claure shared that $200+ million of the new fund’s $500 million capital target will come from Bicycle partners. He and Nyatta went on to explain that venture capital partners investing a significant amount of their own net worth in a fund has an impact on how the funds are invested. When they’re investing their own money, it becomes more personal. They’re not just allocating other people’s capital; rather, they’re looking for people they can partner with who will be good stewards of the partners’ capital. The investing goes from thinking in terms of bets to thinking in terms of partnership. Also, the returns matter more because they affect the personal wealth of the venture capital partners.

I agree with Claure and Nyatta. I’ve learned best and focused more on partnering with entrepreneurs when I’ve had skin in the game via my own capital.