Oct 2, 2023, 4:59 AM ETInterview, Fireside Chat

Phin Barnes: The Services Model of Venture Capital is Broken, The Best Founders Do Need Help | E1067

Finn Brosius and co-founder Dan Portillo launched "The General Partnership" (GP) after departing First Round, driven by a desire to escape institutional constraints and prove their individual capabilities beyond predefined career ladders.
The core thesis of the new firm is that the modern venture capital business model is broken because "platform" services (recruiting, go-to-market) have become cost centers rather than revenue generators, leading to diluted, low-context support.
GP operates on an "unbundled" model where services are delivered in exchange for equity (or via a separate scout/fund vehicle) rather than funded by management fees, aligning the firm's financial incentives directly with founder success.
The firm focuses on a concentrated portfolio of approximately 30 early-stage companies rather than a "coverage" model, allowing for high-intensity, one-to-one engagement with founders.
GP explicitly targets "mature" second-time founders who recognize the value of high-quality operational support over the brand prestige and larger check sizes offered by multi-stage mega-funds.

Brosius ranks investment priorities as: 1) Founder, 2) Early Traction, 3) Market Timing (ability to acquire the first users), and 4) Market Size.
The firm distinguishes between "market" (the category) and "market timing" (the specific readiness of the user base to adopt a solution), prioritizing the founder's ability to execute and surprise the market.
Founder selection relies on identifying "spikes" (exceptional strengths) while rigorously screening for critical weaknesses that could multiply to zero, particularly in operational execution for sales-focused founders.
Brosius advises against applying rigid "rules" derived from past hits or losses (e.g., avoiding emerging markets or hardware based on single failures), advocating instead for plasticity and evaluating each company's unique context.
The team utilizes a "rifle-shot" recruiting approach, where senior operators sit with founders to deeply understand technical and product roadmaps before engaging, avoiding the "game of telephone" common in traditional VC support.

Services are delivered via formal "Statements of Work" lasting 6–15 months, covering recruiting, product engineering, and go-to-market, where the founders pay via equity rather than fees.
The firm unbundles services based on trust in the founder's judgment, allowing companies to reject help they do not need or engage only for specific challenges (e.g., integrating large language models into legacy business processes).
Data indicates that 15 of the firm's first 19 portfolio companies engaged with services, with four initially rejecting services later returning to engage specific teams for acceleration.
Brosius emphasizes that "best founders don't need help from VCs," but they do need access to top-tier operators who can execute specific tasks, often through GP's network of expert partners.
The firm has structured separate funds for "20 Sales" and "20 Product" to ensure these specific vertical expertise areas are not diluted by the general partnership's capital deployment.

Brosius identifies the "co-founding moment" as Dan Portillo leaving Greylock to launch Sweat Equity Ventures, proving that services could be uncoupled from capital to generate returns through equity alone.
He advises new VCs to focus on the technical art of interviewing founders (learning to detect ground truth, priorities, and operating styles) rather than chasing the goal of becoming a partner.
Brosius distinguishes between "happiness" (freedom to do as one pleases) and "joy" (fulfillment derived from supporting others, particularly within family and mentorship contexts).
His daily routine prioritizes work-life integration, including early mornings with his daughter, running 40–60 miles a week for meditation, and strict date nights with his wife to maintain relationships amidst a high-demand career.
Brosius views the "one-to-one" high-context relationship as the only viable path to building exceptional companies, criticizing the industry's shift toward productized, scaled services that fail to address critical, nuanced founder needs.

Brosius remains optimistic about the Seed stage, noting it is immune to macro cycles but has raised the bar for founders to stand out due to increased competition and higher capital expectations.
The long-term goal for the General Partnership is to become a respected institution known for a specific "taste" in founders and a proven track record of creating the best opportunities for talent in Silicon Valley.
He respects niche-focused firms like Pace (Chris and Jordan) and HF0 (Dave Fontenot), citing their ability to maintain focus and quality over scale as models for the industry.
Brosius notes a trend where founders increasingly recognize that raising excessive capital too early can damage company culture and execution, reinforcing the value of a partner focused on sustainable growth.
The firm's investment in "software-only" and high-margin infrastructure reflects a belief in the opportunity cost of capital and the difficulty of scaling low-margin hardware or service businesses.