Aydin Senkut: How I Scaled from a $4M Angel Fund to $900M AUM | 20VC #890

Felicis Founding Context:

• Aydin Ocalle transitioned to venture capital after six years at Google (as Product and Strategic Sales Manager), feeling the company had outgrown his entrepreneurial capacity as it scaled from 30 to 100,000+ employees.
• Felicis began as an angel activity before Ocalle launched the firm after facing rejections from established VC firms, a circumstance he describes as forcing him to "burn bridges" and succeed independently.
• The firm's first fund (2008) raised $41 million; Ocalle notes that early checks were massive relative to the fund size (e.g., investing in Rovio's whole round, Shopify's A round, and Fitbit's B round).
• Felicis explicitly rejected the orthodox "first money" seed strategy to avoid crowded markets, opting instead for a broad, global, multi-disciplinary approach from the outset.

Investment Philosophy & Market Analysis:

• Valuation vs. Quality: Ocalle argues that despite inflation (approx. 2x to 4x over the last 10–16 years) and rising capital requirements, Felicis prioritizes securing positions in the "world's best companies" over optimizing for ownership percentage or entry valuation.
• Deployment Strategy: The firm is willing to start with small checks to enter high-conviction deals, planning to double down or triple down later to build ownership as the company demonstrates value.
• Fund Size & Pace: Felicis has grown from a $41 million fund to a $900 million+ fund family to accommodate market inflation (round sizes increasing 50–150% in 2021) and allow for a higher volume of deals (targeting 40–50 companies rather than 20).
• Crossover Fund Impact: Ocalle predicts crossover and public market funds will move earlier into Series A/B due to valuation compression in late-stage deals, potentially inflating early-stage prices, but notes their reliance on data makes them less effective at identifying pre-signal, stealth-stage opportunities.
• Vintage Diversification: Influenced by LP board feedback, Felicis focuses on diversifying across vintages (not just one year) and geographies to mitigate volatility and manage risk in a "Darwinian" market environment.

Team Dynamics & Firm Building:

• Culture: The firm's guiding principle is "success with empathy," contrasting with the industry norm of "performance at all costs," aiming to maintain internal energy for founder support rather than internal friction.
• Hiring Priorities: Ocalle emphasizes that hiring for "growth mindset" and cultural fit is "100 times harder" and more critical than raw IQ or experience, especially when scaling from a solo operator to a "team of teams."
• Mentorship Model: Felicis actively supports other fund managers via a fund-of-funds effort, driven by Ocalle's lack of early mentorship and a desire to "pay it forward" by providing strategic nudges to GPs with complementary strategies.
• LP Board Structure: The firm intentionally placed skeptical, tough LPs on its board to force rigor and growth, rather than selecting compliant investors.

Lessons from Mistakes & Hindsight:

• Missed Deals: Ocalle cites missing Airbnb and Uber as personal catalysts for founding Felicis, leading to the discovery of Adyen. He acknowledges that the biggest regrets are often deals where they said "no" but should have said "yes" due to a lack of conviction in the upside.
• Decision Process: He asserts that the "A game" of investing is not about predicting market prices but managing portfolio strategy and construction; regret is mitigated by ensuring the decision-making process was sound at the time, even if outcomes were uncertain.
• Stock Distributions: Felicis often distributes public stock directly to LPs rather than selling it for cash, acknowledging that LPs have different liquidity needs and that managing public stock is not the VC's primary responsibility.

Future Outlook & Product Strategy:

• Investment Focus: Felicis is currently excited about Living Carbon, a company that biologically enhances trees for carbon capture and fire resilience, viewing it as a critical solution for climate change.
• Key Insecurities: Ocalle identifies the hardest part of his role as the inability to say "yes" to founders with whom he feels a deep connection but who do not meet the firm's strict process or risk parameters.
• Market Warning: He expresses concern regarding $250–500 billion late-stage rounds with minimal revenue, viewing them as "cash going to die" and likely to trigger a migration of capital toward earlier, more profitable stages.