Semil Shah is the Founder of Haystack, an institutional venture capital firm that backs outlier founders at the earliest stages. Semil started Haystack in 2013, and has since invested in X unicorns like DoorDash, Instacart, Figma, HashiCorp, Ironclad, Carta, Applied Intuition, and Opendoor.

This episode takes us behind the scenes of Semil’s two decade journey building Haystack from scratch. We’ll dive into how he raised and deployed each of the first six Haystack funds, including all the mistakes made along the way, plus the details around Haystack’s new $75 million and $25 million funds announced the date this episode was published.

Read Haystack's announcement here: https://semilshah.com/2023/09/10/announcing-haystack-vii-same-model-fresh-funds-and-new-era/

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Topics discussed include:

Juggling multiple jobs while living paycheck to paycheck his first eight years in Silicon Valley
Failing to get his first job in venture three times
Investing in the Seed rounds of unicorns DoorDash, Instacart, Hashicorp, and Envoy within the first six months of starting Haystack
Why he initially thought Haystack would be a short-term thing
Turning down multiple lucrative job offers two years in
How the best LPs evaluate VC funds on the “Entry Ownership to Fund Size” ratio
Semil’s strategy of “crawl, walk, run” to increase Haystack’s check sizes over time
The pain he felt failing to hit his target fund size on the first four fundraises and how he handled it
Why everyone should “pre-market” a fundraise, and how to do it
The things most founders don’t appreciate about raising a venture fund
Fighting to invest in Ironclad’s Seed round before he had his next fund raised
How LPs reference VCs, and how a VC can become referenceable
Why Haystack Fund IV was the scariest fund to raise
How Semil builds relationships with LPs
The hardest questions he faced raising each fund and what other VCs should anticipate while raising their own fund
How LP investment committees make decisions
What’s going on behind the scenes at most large venture LPs today
Why the traditional advice of “finding an anchor LP” makes no sense
Spilling his secret on the best quarter to fundraise
Why VCs should fundraise with a hard cap on fund size
Why every VC should appreciate and remember how LPs supported them through the pandemic
All the details on Haystack’s new $75 million and $25 million funds
Semil’s plan for the next 10 years
Three pieces of advice for emerging fund managers

Where to find Semil:

Twitter: https://twitter.com/semil
LinkedIn: https://www.linkedin.com/in/semilshah/

Where to find Turner:

Newsletter: https://www.thespl.it
Twitter: https://twitter.com/TurnerNovak

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How Semil Shah Built Haystack

The Peel with Turner Novak