Episode Summary
Executive Summary: The episode pairs VC Sunday School on fund sizing and mega-fund dynamics with a deep interview of Taj Eldridge, co-founder of Include Ventures. The conversation argues that fund size should match stage, that late-stage capital has become crowded and relationship-driven, and that climate investing should be treated as a cross-sector, justice-centered opportunity requiring public, private, and philanthropic capital.
Main Topics: VC Sunday School: Fund size should match stage (Priority: 5/5): Jason argues that optimal venture fund size depends on the stage being targeted: seed funds need smaller pools, A funds need more, and billion-dollar vehicles only make sense when deploying larger checks into later-stage companies. Mega-funds, crossover funds, and market distortion (Priority: 5/5): The discussion explores how large funds can distort pricing, push companies too early toward scale, and become unwieldy when their return targets and fee structures encourage ever-larger capital deployment. Relationship capital and downstream access (Priority: 4/5): The hosts explain how venture is a network business: seed managers can create value for growth investors by providing access to promising companies, while later-stage firms build relationships to secure future deal flow. Include Ventures’ structure and thesis (Priority: 5/5): Taj outlines Include as a multi-part platform: a $125M fund-of-funds, a $125M direct investment vehicle, and VC Include, a training program for emerging fund managers, all aimed at supporting diverse climate-focused managers and founders. Climate as a cross-sector and justice issue (Priority: 5/5): Taj argues climate intersects with health, fintech, edtech, media, transportation, food, and fashion, and that it is inseparable from public health, environmental racism, and economic opportunity. Hardware vs. software in climate investing (Priority: 4/5): Taj sides with the view that climate capital must fund real-world solutions, not only tracking software, while acknowledging room for different strategies and capital stacks across the ecosystem. Capital stack innovation and public-private partnerships (Priority: 4/5): The conversation closes on the need for venture, debt, PE, grants, government, and philanthropy to work together, especially for infrastructure-heavy climate solutions that may not fit traditional venture economics.
Key Arguments: Fund size should be aligned with investment stage; oversizing a fund can force inappropriate check sizes and distort company strategy. Late-stage investing worked during a period of multiple expansion, but public-market compression has made those bets harder, pushing big firms earlier. Venture is fundamentally relational: warm introductions, reciprocal deal flow, and syndicate trust matter as much as formal diligence. Include Ventures is designed to solve both access and representation gaps by backing diverse climate managers and founders and training new fund managers. Climate investing should not be siloed; it touches public health, equity, labor, consumer products, transportation, and energy. Taj argues that climate solutions must be understandable, mainstream, and framed through an '8 to 80' storytelling lens. Donnell Baird’s critique is valid: software-only climate investing is insufficient if it doesn’t produce actual solutions. Not all climate opportunities fit venture; some require debt, project finance, grants, or public-sector support. Geographic diversity is as important as racial and gender diversity because founders and managers exist outside traditional hubs. The industry needs a changing of the guard, with new thinkers and capital models that can move faster than the climate timeline.
Data Points: New fund size: $250 million - Taj Eldridge/Include Ventures fund platform announced in the interview intro Fund-of-funds size: $125 million - Include’s vehicle to back fund one, fund two, and fund three managers Direct investment vehicle size: $125 million - Include’s co-investment/direct startup investing arm Team size: 9 people - Include Ventures team operating across Los Angeles and Northern California VC Include graduates: 14 fund managers - Cohort graduated in Berkeley in the prior year Climate funds supported: 10 funds - Taj says Include had announced support for 10 climate funds led by diverse managers in the U.S. and Europe LinkedIn lead gen form usage: 89% - LinkedIn representative says 89% of startup advertisers use lead gen forms Typical conversion rate: 2% - LinkedIn rep says only about 2% convert after sending traffic to a signup page Bubble listener offer: 1 month free - Sponsor promotion for Bubble paid plans Bubble discount range: $29/month to $529/month - Bubble paid plans mentioned in sponsor ad LinkedIn ad credit: $100 - Sponsor promotion for first LinkedIn marketing campaign Climate fund management fee example: 2.5% per year; $25 million annually on a $1 billion fund - Jason explains fee economics for large venture funds Typical venture return target: 20% per year - Jason contrasts venture with public markets Historical stock market return: 7% per year - Used as benchmark for alpha discussion Wiley textbook cost: $57 - Jason notes the cost of 'The Business of Venture Capital' textbook Kauffman Fellowship cost: $80,000+ - Taj cites the expense of fund-manager training as a barrier Founder networking cadence: 10 VCs per month / 120 per year - Jason’s 'pop-up network strategy' for building deal flow Potential response rate: 20% - Jason estimates response to outreach from the pop-up network strategy Climate target horizon: 10 years - Debate over whether climate solutions can fit venture timelines In-person events frequency: 12 to 24 times a year - Taj says he tries to say yes to one-hour asks that help others One-off dinner example: $200 to $300 per person - Jason suggests hosting a relationship-building climate dinner One-off dinner total: $2,000 to $3,000 - Estimated total cost of the proposed dinner gathering
Pivotal Quotes: "The fund has to match the stage." — Jason Calacanis: VC Sunday School discussion on why oversized funds can be inefficient or distorting "Climate is nothing that's like a, you know, we used to talk about things happening in 20, 30 years from now, but no, climate is. It's a public health issue." — Taj Eldridge: Taj explains why climate investing is urgent and personally relevant "We are venture capitalists, not... we do, we have to take measured risks. But at the end of the day, they are a risk in what we're doing." — Taj Eldridge: On balancing venture returns with climate mission and hardware risk
Implications: Listeners should expect climate capital to keep broadening beyond software and tracking into real-world solutions, with more role for grants, debt, and public capital. For venture, the episode argues that stage discipline, relationships, and diversity of geography and background will matter more as the market resets.
About This Week in Startups
Jason Calacanis covers startups, tech, markets, media, and all the hottest topics in business and technology. He also interviews the world’s greatest founders, operators, investors, and innovators.