tenacity tests
Q4.25 LP update excerpt
Tenacity is one of my favorite words, and feelings. There’s nothing like being presented with an opportunity to be brave and taking it. It pushes you out of your comfort zone inch by inch until one day you open your eyes and realize you’ve completely changed your position on what you believe you can do.
This past year has been a real test of my tenacity. I went from struggling to raise my second fund to running full force at what I always wanted to build with Moth, but thought I needed to wait several years to actualize.
The truth was that my first fundraise spoiled me. It was anchored by people I respected who had mostly made their own money, and I didn’t have to work that hard to convince them to back me. I assumed Fund II would work the same way — just do it again at a larger scale with some institutional LPs mixed in.
I quickly learned how wrong I was. Raising from capital owners (typically HNWs) versus capital allocators (institutions) is a completely different game, and I didn’t know how to run an institutional fundraise process. After two months of spinning my wheels, I paused, closed on what I’d raised, and deployed it. That gave me time to consider my options.
Once I started to see the signs that I could be leading rounds, I decided it was time to go big or go home. I rebuilt the fund model and through trial and error, taught myself how to sell to capital allocators. It’s been a learning curve, but after a few months of pitching the new strategy I saw it start to work in a big way.
There are a few things that I attribute this shift to. One, I started asking for help, even when I felt intense shame discussing what felt like my personal inadequacies and every fiber of my being wanted to run away. Two, I started taking more responsibility for the situation and made an effort to root out my victim mentality.
Lastly, I practiced my pitch a lot. Both with my target audience (LPs) and with my peers (GPs). Getting Moth and my story to a place where I could say it in my sleep allowed me to show up with more ease in conversation. Being more fully present lets me tap into my genuine excitement for what I’m doing, as well as feel more generative and open to the possibilities of where the conversation could go. Practicing with friends right before important pitches helps kickstart this attitude and show, not tell, where my edge comes from.
Fundamentally, I like the proximity investing gives me to incredible people. I like how much autonomy I have. I like how I can exert my taste on the world through the people I fund. I like learning more about humans every single day. But what I don’t like is fundraising, nor the majority of people who call themselves VCs.
Authenticity and tenacity are my most durable advantages — both in fundraising and in backing founders. I’ve been running Moth Fund long enough to have plenty of data points on the lived reality of doing this job. I intimately know the parts I don’t like but also, crucially, why I choose to stay.
The showing vs. telling is so key. I was gonna write that you just can’t fake it. But then again, plenty of people seem to fake it. (Still, I can usually pick up on their inauthenticity.)
Glad you’re still enjoying it, despite the annoying parts.
Hi Moth,
How can I take the tenacity test? I may have been too tenacious. My experience is similar to the example were tenacity helped shift your awareness in the example you shared. The article "Assessing Porter's (1980) Model in Terms of Its Generalizability, Accuracy and Simplicity" published by Gregory G. Dess and Alex Miller brings to light startup tenacity. I would like to look carefully at what tenacity means to institutions.
The article explains strategies during the startup lifecycle. Growth stage sales revenue is also a stage of the startup cycle and in this case the market size is gaining slower sales revenue. In the early stage returns are most important. Early stage startups are about outliers. Startups that are unique. These startups are so many standard deviations away from market allocations. These startups must be reconciled to shear misses from capital allocation.
I talked about capital allocation in college. What I learned is that capital allocation is a poor strategy for early in the startup lifecycle. Allocations inherently lack awareness for new startups. I have always seen hyperscalers as startups in the maturity of their lifecycle fighting for market capitalization. Is venturing away from this tens of trillions of dollars mess a good idea?
Allocations are important to scaling startups but must account for more of the cycle. The problem with allocations is they are so close to market capitalization because money has been “allocated” to a market. Startups create markets. In fact, startups should not even have a market. Let me explain. Created markets aren’t yet capitalized. Capital allocations are a near indicator to market capitalization. The back propagation of capital allocations doesn't pick up on the newly created market.
The problem with allocations being their closeness to market capitalization because money is “allocated” to a market. This link between markets and allocations is important to how startups create markets. In fact, startups should not even have a market. Created markets have zero capital. Further, allocations are indirectly related to market capitalization. Allocations using a back propagation strategy that doesn't account for a created market.
Great example and glad to see your tenacity. You are working hard to document your process. Thank you for the insight. How does one purchase an interest in a Moth Fund Series? May I write money to the Fund's blockchain address? If not, I would love to see an LP update with your instructions.