The Firm

Q1 2023 LP Letter

by Dan Povitsky ( 4 min read )
May 16, 2023

A friend recently told me that Vine’s approach to working with founders is like “building up a deep well of positive karma.”

In our Q1 2023 letter to LPs, we described how we create conditions for positive outcomes, who is the most important stakeholder in early-stage companies, and what it’s like to feel heard in a founder-investor relationship.

If you’re thinking about starting a company and our approach resonates with you, don’t hesitate to reach out.

On Elevating our Founders

May 16, 2023
Re: Q1 2023 LP Update

On Elevating our Founders

This is an intense period for many of us and many of you; and our entrepreneurs are no different. Our team has dedicated immense time and energy this quarter in service of our founders. We got into this business because we believe by exercising Vine’s hands-on and bespoke approach to early-stage investing we can move companies further up the power law distribution curve and generate superior venture returns. Working closely with founders is something we have done since Vine’s inception. In the current business environment for startups – one defined by volatility in demand and uncertainty in financing – these conversations and the decisions being considered to create stability (by managing talent, finances, product breadth) and architect scalable growth (by managing customer acquisition, spending relative to milestones, fundraising) carry more urgency and importance. 

It is our belief that founders, like all people (and perhaps even more so due to their passion), will ultimately do what they want to do. We have partnered with them because after a thorough process (albeit often in sprints of a dozen meetings in the span of two to three weeks) we have established sufficient belief in their vision, faith in their judgment, and confidence that the size (and risk) of the opportunity will yield an outsized return. Like in any partnership, we seek to be heard and (as fiduciaries) have agency in the direction of our shared investment. Relative to founders, our minority ownership places natural limitations on our agency. We believe we have at most ~10% influence (sometimes more, sometimes less) on a founder’s decisions. 

We do not take this responsibility lightly. We devote substantial time to our entrepreneurs over the first 180 days of an investment because we want to set the tone for the relationship. The likelihood of our future recommendations being heard (and acted upon) goes up if from the outset we fulfill commitments, deliver on promises, and demonstrate reliability. This begins with monthly strategy calls, introductions to hires, advisors, and customer leads, and eventually evolves into coaching (sometimes in fleeting moments, sometimes routine). 

When the latter happens, it means not only are we executing Vine’s hands-on approach, but we are doing it well. It means we have built sufficient mutuality to discuss the foundations of what makes a person who they are. It allows us to perceive how founders will respond to future stress and be better equipped to support them when the next issue arises (and it always does). If we can do this part of our job well, then we can help the highest agency stakeholders in our investments, the founders, perform at their best. 

The good news is that, three years into Vine, by-and-large this is the relationship we have with our founders: exercising our agency constructively, helping individuals move their companies further up the power law distribution curve. The topics we address vary in criticality and duration; and even an action as simple as identifying and introducing a customer for an emerging product requires nuance. Few of these topics were as existential as cash trapped in an account at a closing bank two days before payday. During the March 13-15 SVB crisis, we were involved in many calls, texts, and zooms across the portfolio supporting our founders with cash recovery and management. Below we have listed (non-exhaustive to preserve confidentiality) examples of the work we did this quarter (and are still doing), typically in pairs. 

Funds I & II
  • Company (Eric, Dan): co-investment with LPs to support Series B
  • Company B  (Dan): guidance in preempted M&A process. 
  • Company C  (Eric, Dan): reference for new Series A lead, Brewer Lane Ventures. 
  • Company D (Dan, Eric, Demren): revitalizing the company amid founder transition with new & old members of the leadership team;  Sales & GTM consultant, ex-VP.
  • Company D (Dan, Eric): supporting Series A fundraise.  
  • Company D (Dan): closing interview for VP Eng. candidate (offer accepted); introduced potential customer; advised on acquihire. 
  • Company D (Demren, Dan): advising and structuring preempted Series A2; introduced potential strategic advisor to the team; brought in co-investors who doubled the total demand for investment.
  • Company D (Dean, Dan, Demren): supported public launch including drafting press release, advising on founder’s public profile; hosted prospective customer dinner with friends of the firm: Sr. Dir. Eng. @ Databricks, Head of Eng. @ Uber, Sr. Dir. Eng. @ Okta, Dir. Eng. @ Square, Head of Eng. @ DoorDash, Sr. Dir. Eng. @ Roblox. 
  • Company D (Dean): sourced VP Eng. candidates, including the eventual hire. 
  • Company D (Dean, Demren): introduced potential customer.


There is no better time than the present to address our individual agency – after all, it surfaces in our personal and professional relationships. The reason we mention it in Q1 2023 is because its presence (when rooted in reality) is needed and its absence is felt. The VC industry has seen turnover, strategy-shifts, pullbacks, and today many a board meeting can be found with absent or absent-minded investors unwilling to tackle difficult conversations, instead participating in temporal popularity contests (or simply looking past the current portfolio and onto the next fund). We believe this is a moment when reputations will be made. This industry is highly competitive and we welcome the opportunity to stand out by exercising our agency in service of our founders. 


With gratitude,
Team Vine