Venture Fund-of-Funds: Emerging Managers

Interview Snapshot

Rohit Yadav: Jamie, thank you for joining us. Let's begin with the basics. What is Screendoor, and what makes it unique?
Jamie Rhode: Screendoor was started in 2021 by 10 established venture capitalists who recognized a white space in the market. Emerging managers (EMs) needed not just capital but guidance and mentorship. That’s where Screendoor comes in—we provide anchor capital and pair each manager with one to two of our GP advisors. Today, we have 14 such advisors. Our goal is to back first institutional funds. We invest in new fund managers who operate in pre-seed and seed in North America. What we really look for is the manager’s lived experience—something that gives them an edge in sourcing, selecting, and winning deals. If that edge doesn’t come through clearly, we pass.

“We back first institutional funds, not first-time investors…. Being ‘emerging’ doesn’t mean inexperienced—it means untapped…. Emerging managers aren’t struggling because they underperform—it’s LP comfort bias.”

Rohit Yadav: Mentorship from GPs is a core part of your model. How have EMs responded to this?
Jamie Rhode: The response has been very positive. Founders deal with real-life situations—breakups, deaths, reporting issues—and our managers get access not just to me and my partners but also to seasoned VCs who’ve been there and done that. It’s a safe, nonjudgmental support system. We're backing people looking to build enduring firms—whether that’s staying under $50 million or scaling to $500 million over time.

Rohit Yadav: The term “emerging manager” gets used a lot but can mean different things. Can you paint a data-driven picture of this ecosystem?
Jamie Rhode: Definitely. In 2010, there were about 1,000 VC funds in the U.S. By 2024, that number has exploded to over 3,600. Over 1,200 of those were Fund I vehicles launched since 2021. Screendoor has reviewed over 1,000 of those Fund Ones—that’s about 90% of PitchBook’s stat. The median fund size we see is around $30 million. The average is closer to $95 million, largely due to some larger spin-outs we evaluate. But here’s the catch: despite the number of fund launches, access to capital hasn’t scaled. EMs only raised 15% of total capital, even though they accounted for 45% of launches. That number is dropping further.

Rohit Yadav: Why do you think that gap exists?
Jamie Rhode: It’s a combination of market conditions and human behavior. Nobody gets fired for investing in IBM, right? There’s career risk in backing Fund I or Fund II GPs without established DPI. But that’s also the opportunity. The real innovation risk in VC isn’t backing a Fund I—it’s ignoring it. Most brand-name funds were Fund I’s at some point. Skip the early vintages and you’re likely locked out later. I’ve seen this in public markets and hedge funds too—there’s always a consolidation phase after explosive growth.

Rohit Yadav: You emphasize enduring firms. Do you segment EMs internally—by fund size, strategy, geography?
Jamie Rhode: We avoid hard-and-fast rules. Venture punishes rigidity. A $15M Fund I might be more “institutional quality” than a $50M one, depending on the GP’s experience, strategy alignment, and ability to build a durable firm. We ask: Can this person crawl, walk, run? Do they understand operational needs like LPACs, tax reporting, portfolio construction? We’ve backed Fund Is, IIs, and IIIs. Median fund sizes rise predictably—$30M for Fund I, $50M for Fund II, $60M for Fund III. But since 2023, fund sizes have been shrinking. That’s reflective of the fundraising environment. Still, being “emerging” to us doesn’t mean inexperienced—it means untapped.

“The innovation risk in venture isn’t backing Fund I—it’s ignoring it…. Most brand-name firms started as Fund I’s…. We avoid hard and fast rules—venture punishes rigidity.”

Rohit Yadav: How do you think about thematic exposure—AI, climate? Do you tilt your portfolio based on trends?
Jamie Rhode: I’d ask questions if I didn’t see AI in a deck—it’s everywhere. But we’re not tactical. We think in multi-vintage, long-term terms. You want exposure to all the sectors of today and tomorrow. If you lean in too heavily on one hype cycle, you risk overconcentration.

Rohit Yadav: Can you index venture?
Jamie Rhode: If you could build an ETF of early-stage venture, you'd capture the mean return—which is highly attractive. The mean return across startups is about 90% correlated to top quartile—so statistically, if you invest in a large enough sample set, you’ll likely capture the mean or top quartile. But access is the real challenge. That’s where fund-of-funds come in.

“You can’t lean too heavily into one sector like AI—you risk hype cycle exposure… We want consistent vintage year exposure to all sectors of today and tomorrow…. If you could index venture, you’d capture the mean—which is near top quartile.”

Rohit Yadav: What should LPs expect from early stage focused EMs in terms of risk, returns, and liquidity?
Jamie Rhode: Higher dispersion, more volatility—but also higher upside. Early-stage venture offers significantly more return potential than late-stage. Think 5-8x higher historically, depending on the vintage. But you need to size it properly—it’s illiquid and longer duration. And not all volatility is bad. Some of it is upside volatility. That’s the beauty of dispersion—you can actually compound capital meaningfully if you choose well. That said, EMs need support. They may lack experience in exits or DPI strategy. That’s where our GP advisors step in.

Rohit Yadav: For LPs who want exposure, how should they think about fund-of-funds, especially with extra fee layer?
Jamie Rhode: In most asset classes, fund-of-funds don’t outperform net fees. But in early-stage VC, the dispersion is so wide that a good FoF can beat direct strategies—even net of fees. You also get help with sourcing, diligence, and back-office. We’ve had family offices come in thinking they can do it alone, only to realize they’re buried in K-1s and missing reporting deadlines. We provide structure and access—especially when check sizes are larger than many fund sizes.

Rohit Yadav: What kind of questions do you typically get from family offices?
Jamie Rhode: Many want to be close to innovation. They’re drawn to VC for the returns and the excitement. But the back-office, compliance, and reporting realities hit hard. That’s why we encourage our LPs to invest directly alongside us. Screendoor can't be the only LP on a cap table. We need partners who share our conviction in this part of the market.

Rohit Yadav: Where do you think we are in the cycle? What’s the outlook for EMs in the next 1-2 years?
Jamie Rhode: Fund I closings are down almost 50%. Established firms dominate—raising 80% of recent capital. The macro environment, public market drawdowns, DPI slowdown, and exit droughts have created friction. But this is also a sorting mechanism. Durable firms will survive. LPs who stay active now are likely to access the best vintages in a decade. I think secondaries will play a bigger role. Managers need to think strategically—if you’re sitting somewhere between 500 million and 1.5 billion valuation, you don’t need to necessarily wait for the big exit to return your fund.

Rohit Yadav: Debate one: specialist vs generalist?
Jamie Rhode: It’s a mixed bag. We see both. Specialists can create exposure risks in hype cycles. If you only back FinTech  and that sector crashes, your outcomes suffer. That said, some sectors—like climate—might require specialization. But generalists with unique networks can still find breakout founders. EMs, in a way, are specialists by nature. They often have fresh access—to a founder network, a geography, or a platform like the Thiel Fellowship—that legacy firms don’t.

“Fund-of-funds offer access, infrastructure, and portfolio support…. Family offices love the shine of VC but often underestimate the back office…. EMs aren’t struggling because they underperform—it’s LP comfort bias.”

Rohit Yadav: Debate two: Are there too many EMs?
Jamie Rhode: There are a lot, but many are undifferentiated. During the ZIRP years, the bar was too low. At Screendoor, we ask: What gives you the edge to spot non-consensus opportunities and be right? But we always need more high-quality EMs. The established GPs who helped start Screendoor wanted to fund their competition—to keep the ecosystem healthy.

Rohit Yadav: So the bar to start a VC fund should be higher, but it should be easier to build it after starting?
Jamie Rhode: Exactly. There’s room for Fund Zeros and part-timers, especially for certain LPs. But to build an institutional firm, yes, the bar needs to be higher. That’s why Screendoor exists—to help fund managers make that leap.

Rohit Yadav: Are we entering a world where more EMs shut down?
Jamie Rhode: Some are maturing faster. Others are shutting down sooner. This is why operational due diligence matters—LPAs, succession planning, LPAC setup. When things go wrong, that stuff is crucial. The shakeout isn’t just about capital scarcity—it’s about operational maturity. The managers who treat Fund I like Fund IV will win. Only 20% of early-stage funds deliver a 3x or greater. If you’re locking up money for 10–15 years, you need to be in the right funds.