20VC: From Kitchen Table to $134M Fund II; Raising Your First Time Fund: Lessons from 400 LP Meetings, How To Find New LPs, What Materials to Use, How To Get LPs To Commit, The Challenges on Minimum Check Sizes and GP Commits and more with Henri Pierre-Ja
Henri Pierre-Jacques is Managing Partner of Harlem Capital, on a mission to change the face of entrepreneurship by investing in 1,000 diverse founders over the next 20 years. From a kitchen table with his Co-Founder, Jarrid, Henri has scaled Harlem in just a few years to their latest fund last year of $134M, well over-subscribed from their $100M target. Prior to Harlem, Henri was in Private Equity at ICV Partners, and before PE was an Investment Banker at Bank of America Merrill Lynch.
In Today's Episode with Henri Pierre-Jacques
1.) From Kitchen Table to $134M Fund:
How did Henri make his way into venture having had the idea for Harlem at the kitchen table with his best friend?
How did Henri use his angel investing strategically to position him to raise Fund I?
How did Henri's mindset change when making the transition from angel to VC?
2.) The First Fundraise: Harlem I
How long did it take to raise the first fund? How many meetings did they have?
What were the most common reasons LPs said no for the first fund?
What were their biggest lessons around what potential LPs did and did not like?
How does Henri advise new managers when it comes to meeting new LPs?
How does Henri use past deal memos to serve as discussion material with LPs?
3.) Building the Firm: The Strategy:
What was the portfolio construction for the first fund?
How does Henri separate the world of funds into 3 distinct groups?
How did they approach reserves management with the first funds? What are some of Henri's biggest lessons when it comes to effective reserves management?
How does Henri assess his own relationship to price and ownership? How does that change with fund size?
What are some very important nuances that Henri does not believe many managers think about?
4.) It Is Time For Change:
Specifically, what are Harlem street doing to ensure the next generation of investors is much more diverse? How do they leverage their intern program to achieve this?
What would Henri like to see change in the world of LPs when it comes to allocating to more diverse managers?
What legacy does Henri want to leave with Harlem? What will be a success for Henri?
Items Mentioned in Today's Episode with Henri Pierre-Jacques:
Henri's Most Recent Investment: Mueshi
How to invest in overlooked ideas with Harlem Capital's John Henry
On this episode Abadesi talks to John Henry, venture partner at Harlem Capital and host of Hustle on VICELAND.
In this episode they talk about...
How he got into entrepreneurship and how the expectations for today’s entrepreneurs have changed
“I think the world of business and entrepreneurship can seem pretty scary these days. There's so much at stake, you got to get it right, you got to raise money, you got to go public.“
John got his start as an entrepreneur through trying to help out his family when he was young, starting a dry cleaning service in New York. He says that he didn’t have big aspirations at the time and that he didn’t come to entrepreneurship with visions of a glamorous lifestyle in his future.
He says that these days entrepreneurship can seem very daunting and that rather than feeling the weight of the expectations that people have you should instead take the approach of doing something creative and fun and then see if you can sell it to folks.
“I have to be honest, if I were starting now versus a decade ago when I started I might feel like the weight of the the expectation might have crushed the seed of enthusiasm that I had to start.”
Why he says getting a regular job is riskier than starting a company
“There are a lot of macroeconomic changes and not only are older corporations cutting jobs but you also see it in new companies. For me taking a normal job felt riskier because your own income was not in your own hands.”
When John started working he realized that it would be better for him to put his time and effort into building a company instead of putting it into working for someone else at a conventional job. He says that although it can take years to get off the ground, it’s nevertheless better to work at something that you own entirely.
How he discovered financial literacy and how to be a “multi-dimensional earner”
“I’ve discovered this entirely new way of earning that I never would have known about when I was a doorman ten years ago because back then my best understanding of how to earn income was clocking in.”
John says that he is investing in assets rather than experiences these days. He says that through doing so he wants to “build something for your family that can’t be taken away.” He explains how he learned about how to effectively invest his money after coming from a disadvantaged background where he didn’t normally have much exposure to those types of concepts.
He also talks about how to find a good business idea for aspiring entrepreneurs and how he has diversified his income streams so that he’s not reliant on any one of them. He explains that he is making sure to “circulate” the funds that he earns so that he’s always re-investing and putting them to work instead of just stashing them away in a savings account.
“You have to meet the moment. For anyone who is listening who is curious for one reason or another what they can do to earn income, look around at the moment. There are a lot of changes that are specific to right now, to 2020.”
The history of VC and how they’re changing the flow of capital to underrepresented founders at Harlem Capital
John explains some of the ins-and-outs of venture capital and the history of the space including how it came to be that a “handful of zip codes and a handful of schools determine which companies go public.” He explains what kinds of barriers to entry exist for people who find themselves outside of the networks of privileged people with connections to the large institutions that normally contribute to venture capital funds (yes, venture capitalists have to fundraise too!).
He also talks about how he invests in personal development and talks about some of the products he’s loving right now.
We’ll be back next week so be sure to subscribe on Apple Podcasts, Google Podcasts, Spotify, Breaker, Overcast, or wherever you listen to your favorite podcasts.
Companies and Products Mentioned on This Episode
LED Ring Light — Beautifully lit photos and video calls.
Nespresso — The connected espresso machine.
Sodastream — Carbonated water, at home.