Peter Walker

Never do this.

A lot of GPs hold everything until the very end because selling a winner is psychologically hard bc it always feels like “leaving money on the table.” But LP patience isn’t infinite, especially in the post-ZIRP era. So I actually believe selling a small slice of a winner (like 15–25%) can make a lot of sense. But the nuance matters. Case 1 (aka good portfolio management). A GP holds a position with a strong markup, there’s real secondary demand, and the company has already proven the core model. Trimming ~20% is simply rational: locking in some upside, slightly reducing concentration risk, while still staying meaningfully exposed to the rest of the curve. DPI improves almost as a side effect of good portfolio management. Case 2 (aka fundraising optics) A GP is raising Fund II, there’s one company that looks promising but hasn’t fully proven scale yet, and suddenly selling a slice becomes less about portfolio math and more about having a DPI number on the slide. The narrative improves, but the GP might be cutting into the position that could actually define the fund. On paper those two decisions look almost identical. Economically they’re very different. In the first case DPI emerges from disciplined portfolio management. In the second case the GP is trading some deal-level carry for franchise momentum by improving distributions today in exchange for making the next fund easier to raise. That is also why LPs should also check the nature of DPI (when liquidity happened, how much of the position was sold, and what drove the decision).

the default yc round this batch (W26) seems like 4m on 40m I remember when I first started in venture exactly three years ago (W23 batch) and most venture ppl were complaining about YC pushing their founders to do 2m on 20m in 3 years the market went from a very begrudging 2 on 20 to a more neutral 4 on 40 interesting to think about where things land 3 years from here