Welcome back to the Alt Goes Mainstream podcast.

His career started when someone said to him, “well, have you thought about venture capital? We don’t think that you’d be any good at it.”

The rest is history.

Today’s episode features one of the legends of the venture capital industry.

Peter Barris joined New Enterprise Associates in 1992 after a storied operating career as President and COO at Legent Corporation and an executive at GE Information Services. He served as Managing General Partner and Chairman of NEA from 1999 to March 2024. Under Peter’s leadership, NEA saw tremendous success, growing into one of the world’s largest venture capital firms and raising the largest-ever venture capital fund a number of times. Today, NEA’s AUM stands over $25B.

Peter was responsible for investing in a number of foundational and industry-transforming technology companies, including Salesforce.com, UUNET, Groupon, WebMD, Workday, CareerBuilder, Tempus, and more.

It was an honor to talk with Peter, who has such rich perspectives as both an operator and investor.

We had a fascinating discussion about the early days of venture capital and how the industry has evolved. We covered:

• The inside story of how almost every other Partner said no but Peter's investment turned out to be a 75x return.
• What's the “best characteristic and the death characteristic” of an entrepreneur?
• In today's hypercompetitive market, do VCs have enough time to make good decisions?
• Why the world of venture capital is about influence.
• What does it mean to earn an entrepreneur’s trust as a VC?
• Why VCs with operating backgrounds can bring unique value to startups.
• How NEA came up with the term "Venture Growth Equity."
• How can a VC tell that a founder is good at experimentation and that they have the good judgment?
• Why specialization and domain expertise are prerequisites in today’s venture industry.
• The importance of relying on instinct to make great investments.
• Why the business plan that is bet on is not always the business plan that ultimately succeeds.

Thanks Peter for coming on the show. It was an honor and a pleasure to hear your views on the evolution of an industry and for you to share your wisdom and experiences.

Show Notes

00:00 Introduction and Sponsor Message from Ultimus

01:55 Guest Introduction: Peter Barris

01:59 Peter Barris' Career Beginnings as an Operator

03:43 How Peter decided to join NEA

04:31 Early Days at NEA

12:30 First Investment Experience – The world of venture capital is about influence

15:07 How to Influence a Company when You Don’t Control the Company

21:48 Scaling Businesses: When Scale Can be a Moat - The Groupon Example

26:41 The Art of Experimentation

29:16 The Most Important Characteristic of Successful Entrepreneurs and the Death Characteristic

30:40 The Groupon Investment: A Case Study

33:08 The Evolution of Venture Capital Decision Making

33:58 Specialization and Competition in Modern Venture Capital

38:10 How NEA Came Up with the Term: Venture Growth Equity

46:04 The Impact of Scale in Venture Capital

50:49 The Future of Venture Capital and Industry Evolution

59:16 Lessons Learned in Venture Capital

01:02:08 Conclusion and Final Thoughts

A word from AGM podcast sponsor, Ultimus Fund Solutions

This episode of Alt Goes Mainstream is brought to you by Ultimus Fund Solutions, a leading full-service fund administrator for asset managers in private and public markets. As private markets continue to move into the mainstream, the industry requires infrastructure solutions that help funds and investors keep pace. In an increasingly sophisticated financial marketplace, investment managers must navigate a growing array of challenges: elaborate fund structures, specialized strategies, evolving compliance requirements, a growing need for sophisticated reporting, and intensifying demands for transparency. 

To assist with these challenging opportunities, more and more fund sponsors and asset managers are turning to Ultimus, a leading service provider that blends high tech and high touch in unique and customized fund administration and middle office solutions for a diverse and growing universe of over 450 clients and 1,800 funds, representing $500 billion assets under administration, all handled by a team of over 1,000 professionals. Ultimus offers a wide range of capabilities across registered funds, private funds and public plans, as well as outsourced middle office services. Delivering operational excellence, Ultimus helps firms manage the ever-changing regulatory environment while meeting the needs of their institutional and retail investors. Ultimus provides comprehensive operational support and fund governance services to help managers successfully launch retail alternative products. 

Visit www.ultimusfundsolutions.com to learn more about Ultimus’ technology enhanced services and solutions or contact Ultimus Executive Vice President of Business Development Gary Harris on email at gharris@ultimusfundsolutions.com.

We thank Ultimus for their support of alts going mainstream.