How LPs Gauge GP Follow On Discipline

How do limited partners assess a venture capital firm's discipline when it comes to follow-on investments? We dive into the data: a 2025 study from Cambridge Associates shows that follow-on rounds account for nearly 60% of total capital deployed by early-stage VCs, yet they drive over 80% of net returns. Lucas and Luna discuss the key indicators LPs look for—like concentration trends, hold vs. sell patterns, and how a GP handles underperformers. Drawing on real-world examples from firms like Sequoia and Bessemer, they explore why follow-on discipline is often the biggest differentiator between top-quartile and bottom-quartile fund performance. They also share how LPs can request portfolio company round-level data to evaluate a GP's decision-making process. A must-listen for anyone committing capital to a venture fund. #FollowOnInvesting #LPDiligence #VentureCapital #GPEvaluation #CambridgeAssociates #SequoiaCapital #BessemerVenture #PortfolioManagement #ReturnDrivers #DueDiligence #LimitedPartner #GeneralPartner #Business #Finance #FexingoBusiness #BusinessPodcast #VCPodcast #LPStrategy Keep every episode free: buymeacoffee.com/fexingo