I want to keep growing Embracing Emergence into its full potential. And as I keep going, new avenues have been revealing themselves. One of these avenues is successful fundraising announcements of the best Emerging Managers.

The goal is to provide a unique announcement channel for the world’s best emerging funds to you 1,100+ readers who are all LPs or GPs.

Secondly, these announcements are not typical press announcements. I sit down with the GPs to ask them: what worked for fundraising, what didn’t? How did you manage to raise in the current environment? It’s these transparent answers that will provide guidance and value to both GPs and LPs.

For this first fund announcement, I got to enjoy a conversation with one of my favorite Emerging Managers: Dan Kimerling, who just raised his third fund with Deciens at $93.33M.

In our conversation, Dan shares how the fundraising process for Fund III has been different from his previous funds. What he has been proving with Fund I and Fund II. What Deciens stands for. How he is thinking about building a firm that deserves to exist. And decisions he made early on that have proven to be foundational to where Deciens is today.

With this volume I am excited to announce an exclusive workshop partnership with Sydecar. The binding theme of Embracing Emergence is the discovery of convergence between GPs and LPs. Every volume I write is either a positive or negative movements towards this convergence.

And Sydecar is the perfect partner for this story, since it helps GPs operate their fund in such a way that the relationship between the GP and their LPs can thrive. All the way from legal set up, to tax documents, KYC for LP onboarding, etc.

But to get to this partnership with LPs, GPs first need tell their story and strategy to LPs in such a way, that makes them stand out from the crowd and earns the trust of investors.

This interactive workshop will be for max. 20 Emerging Managers. I will lead through what LPs are looking for, how to connect with LPs in a meaningful way, how to position your fund, and how to refine your pitch.

You can sign up here for the workshop.

Questions We Cover:

Benedikt: I remember one of the first things you said when I first met you: “Everyone is trying to prove something with their first fund.”

You now successfully closed your third fund with Deciens. What did you initially set out to prove when you started Deciens? What do you feel you have been able to prove with the journey traveled thus far and what are you wanting to continue to prove?

Dan: That’s a great question.

What I needed to prove in Fund I was that I could lead financings. Before starting Deciens, I had been a pretty active angel investor and knew that I could find interesting companies while being a good collaborator with entrepreneurs and co-investors. I had confidence in that because I had done it 30-something times.

But I had never led a financing. So for me, there was a big leap in my own practice to prove to the world what I already knew: that I could successfully be a lead investor. And proving that was more of a logistical or administrative nature. It’s very binary. You can either do it or you can’t. You either put term sheets down and get them signed or you don’t. It’s demonstrable.

But I think, ultimately, what happened, especially during Fund II, is that I came to have a particular view of the venture capital industry. And that’s when things started to crystallize. I call that view “defying orthodoxy,” and it’s become pretty synonymous with what Deciens stands for now.

What I want to prove today is that there is an alternative way to do venture capital. One that’s far more aligned with all stakeholders and far less extractive than the status quo.

I want to prove that this model is not just possible, but that it delivers better outcomes. That it’s not difference for the sake of difference, but difference for the sake of excellence.

In a lot of ways, I feel like I’m creating a movement. And I want that movement to have real impact—not just be a self-congratulatory, intellectual exercise. I want it to actually make a difference in the lives of all our stakeholders.

Benedikt: First of all, I love that your fundraising announcement lists the full $93.33M you raised, not a flat $93M. That’s very representative of how you value your LPs and your scrappiness.

So, what did it take for Deciens to manage to raise a $93.33M Fund III in the current fundraising environment? Was there a learning curve to interacting with LPs this time around vs. Fund I and Fund II? If so, what changed and what did you have to adapt?

Dan: Well, the first thing is that “.33” in $93.33 million? That’s real. Every dollar counts. Every dollar matters. Every dollar is somebody’s dollar. It’s not an intellectual exercise. Whether it’s an institutional LP or a non-institutional LP—it’s someone’s money. And that means something. It’s not something to be taken lightly or with frivolity. It’s serious.

With each fundraise, you learn new things. Fund III was raised in a totally different macro environment than Fund II. When we raised Fund II, it was an ebullient market, right after COVID, the stock market was ripping, interest rates were low, optimism was everywhere. Fund III? We were staring down rising rates, inflation, a lot more skepticism and anxiety on the LP side, with good reason. That changed the kinds of questions LPs were asking.

And not just for us. In general, LPs are much more focused now on liquidity generation. That’s become one of the most frequent topics. Another aspect that has come up repeatedly is the rate sensitivity for certain business models in the world of financial services, which is our world. Some business models are more rate-sensitive than others. Some are pro-cyclical, some are counter-cyclical. So LPs wanted to go deeper: How would our companies perform in a higher-rate world? What’s the real value of future cash flow when the discount rate actually matters? In an environment with higher inflation rates, people care more about the dollar today than the promises of dollars tomorrow.

There is also a meta shift happening in venture. You’ve got mega-platforms out there writing $20 million checks like they’re call options. They want growth at all costs—5x, 8x, 10x every year—and they’re happy to burn capital. But that’s not Deciens. We run a small fund where capital efficiency is everything. That distinction becomes more visible and important in this kind of environment.

And then, there’s the people side of this. What we’ve seen is that our LPs are the ones who treat partnership with us the same way we treat partnership with our founders: seriously. With intention. Not casually. And that kind of trust and alignment takes time. It takes reps. It takes showing up.

And that’s where the real sacrifice comes in.

This job is insane and I love it so much. I was literally thinking this morning that I want to die at my desk, as an old man, still doing this. But the cost of that? You have to be on the road. Constantly. You’ve got to be out there with your people. You can’t sit in the Bay Area and only fund Bay Area companies and only raise from Bay Area LPs. That’s a path—some people choose it—but that’s not how I’ve chosen to operate.

So yeah, I’m on the road a lot. But I have this incredible community around the world. Friends. Collaborators. And I never, ever want our founders, or our LPs, to think that we don’t work as hard as we possibly can for them.

Benedikt: I had initially thought about calling this volume “What it really took from Dan Kimerling to raise a $93.33M Fund III”. But I decided that this wouldn’t be the most reflective title for what you are building.

You always mention your team and the firm you are building. When I think about financial services, I think about Deciens. You have managed, for me at least, to associate the firm with something before I focus on one individual. Not because there is not a star in the firm, that is obviously the case, but because you are building something that is bigger than you.

You sacrifice a lot of time, you travel almost non-stop, we have exchanged notes about the care you have for your team, etc.

Why do you care to such an extent about building up a firm? What makes Dan Kimerling care so much about everything the firm does and is associated with?

Dan: I think in some ways, it’s actually very simple. If you want to do big things—and I do want to do big things—you have to be willing to work on the same set of problems for years, decades even. And to do that, you have to operate with a level of sustainability that allows for that kind of long-term commitment. I don’t even love the word “sustainability”, since it sounds a little soft, a little loose, but it’s true. If you’re not physically, psychologically, spiritually, and financially sustainable, eventually something breaks. And when that happens, all the compounding you’ve put into building something becomes worthless.

That’s why I talk about our team so much. Without them, we’re not sustainable. And without that sustainability, we’re not going to have the longevity required to achieve anything meaningful. You just won’t last.

Right now I’m reading Snowball, the biography of Warren Buffett. When you read about what he was doing in the ’50s and ’60s, you start to understand why it’s called Snowball. Because you see what happens when you let something compound for 40, 50, 60 years. That’s the game we’re playing. And you can’t play that game if your foundation isn’t solid.

My partner Vishal was in the Air Force Reserve, and one of the things we talk about often is the big impact of small things. He tells stories about how his superiors would be obsessive about the details—beds made a certain way, shoes shined a certain way, uniforms exact. And he always says: it’s not actually about the bed or the boots. It’s about what happens when you’re putting the jet engine back together. If you miss a part, someone dies. If you fold the parachute the wrong way, someone dies. That’s why the little things matter. It’s about discipline, respect, care, attention.

And I think about that in everything we do. It’s not really about the newsletter—we could cut corners. It’s not really about the Zoom call—we could make it sloppier. But if we do those small things with a high standard of excellence, then when it comes time to make a big call—or to ask our LPs to give us the benefit of the doubt—we’ve earned that right. We’ve proven we’re worthy of their trust because we bring that level of intentionality to everything. That’s the culture. And it has to be pervasive. It has to show up everywhere.

That’s why I care so much. Because it’s not just about me. It’s about building something that lasts. Something that gets better every year. Something that actually deserves to exist.

Benedikt: I want to touch on a few particular things that make Deciens stand out. You call it “Defying Orthodoxy”. Two items, which form this manifesto of “Defying Orthodoxy” fall under this category that I would like to highlight:

I would like to touch on those two, since they play a role in what makes Deciens and how you have managed to stand for something. Which clearly helped you to raise your third fund. 

“Value-add” is something that is publicly acknowledged to be a platitude. What enables Deciens to change the trajectory of a company and what does that practically look like? 

You make big bets and assertively double down when you see them breaking out. What enables you to be good at identifying winners and structuring AND winning your ownership? 

Dan: There’s this idea Ishan, my partner, often talks about: we try to be the X + 1 co-founder. If a founding team has two co-founders, we aim to be the third. If they have three, we want to be the fourth. That’s how we think about partnership.

Starting an early-stage company is insanely lonely. Even if you have co-founders, there’s still this weight that’s hard to share. And your employees—while critical—aren’t the right place to unload the full truth of the pressure, the fear, the uncertainty. There’s only so much transparency you can have with them.

We try to be in the trenches. And what that looks like in practice is different for every company, but for me personally, I always say: 50% of my job is being an investment banker, 50% is being a management consultant, and 50% is being a rabbi. The math doesn’t work, but that’s the job.

Sometimes that means stepping in as an accountability partner. There’s a company we’re working with right now on a critical issue. I told the CEO, “You’re going to hear from me every single week until this is resolved.” So I put 30 minutes on his calendar every week. Some weeks it’s a quick check-in: “Cool, progress.” Other weeks, I’m sweating him—“Why the hell haven’t we moved faster?” It’s not about micromanagement. It’s about alignment. It’s about building momentum together.

And then there are the structures we put in place. Every one of our companies does a board meeting every quarter. But those meetings aren’t for us. They’re for the founder. It’s their chance to pull back, assess, take stock, think long-term. It’s a small window to zoom out from the chaos of execution and get clarity. That’s part of what value-add really is—being present in a way that makes the founder better at what only they can do.

People throw around the term “value-add” like it’s a given. Most of the time, it’s not. It’s a platitude. But we don’t show up to impress—we show up to do the work.

The other part of this is our ownership strategy. We double and triple down when we see something working. And the reason is simple: we’re students of history.

If you study the greatest success stories in investment management, they don’t come from being kind of right across 50 names. They come from making a few concentrated bets—and being very right. That’s where the outsized outcomes come from.

Charlie Munger—my hero—has this quote: “The way to get rich is to put all your eggs in one basket and then watch that basket very carefully.” And the truth is, he’s right. That’s not just good advice, that’s historically accurate.

The winners in venture outperform by more than most people think is possible. And when we find one, we want to own a meaningful piece. We want to be great partners to the company and have that partnership be economically meaningful for ourselves and for our LPs.

Part of the reason this works for us is because most of our LPs don’t need more diversification - most of the time they already are sufficiently diversified. They come to us for what we call pure alpha. They’re looking for uncorrelated, concentrated outperformance—not more expensive beta with a fancy story wrapped around it.

So yes, we make big bets. And we stay close enough to the companies to know when we’re right. That’s how we operate. That’s what Defying Orthodoxy looks like at Deciens. And that’s what we think it means to actually stand for something.

Benedikt: Both Fund I and Fund II are top-quartile performers by TVPI, and Fund I ranks in the top decile for its vintage. Additionally, this third Fund brings the firm’s AUM to $290M. It is fair to say that Deciens is here to stay to do venture at the highest level.

I would like to use some of our time to draw out wisdom from our conversation that might provide some guidance to both GPs and LPs on things that are oftentimes overlooked or not talked about when it comes to what it takes to build a firm.

While you are in the middle of fundraising or strategizing for your first, maybe second fund, oftentimes Emerging Managers are still trying to figure out what matters. Sometimes leverage is hiding in seemingly low-stakes choices.

Can you think of a decision you made early in Deciens’ journey that felt small at the time but turned out to be foundational to the firm?

Dan: One decision that ended up being foundational for Deciens happened even before Fund I.

I was preparing to launch the firm and sent one of my early pitch materials—maybe the term sheet or the deck—to Roger Ehrenberg, who’s been an informal mentor to me. Roger started IA Capital Partners, and I’ve always respected how he’s built his firm.

At the time, I had structured the economics so that if we hit certain aggressive return hurdles, we’d get premium economics. It was a “we win big, we get paid more” setup. Pretty common thinking.

Roger came back to me with something simple, but it’s stuck with me ever since. He said: “If you are extra fair with your limited partners, they will be extra fair to you.”

That hit me. Because the inverse is also true—if you’re extractive with your LPs, and then one day you need flexibility or help, you can’t expect them to say yes.

That was eight years ago, and it still guides how I think. In the moment, it felt like a small design decision about economics. But it’s turned into a core principle: treat LPs generously and with integrity, and you create the kind of partnership that endures. That mindset has been foundational to how we’ve built Deciens.

Benedikt: It’s not a secret that you have opinions. Opinions that are not always consensus. And I’m sure that brought several “NOs” with it when you started your journey with Deciens.

How did you learn to separate personal ego from principled conviction early on when people “didn’t really get it”?

Dan: I have a lot of ego. I’m human and humans have ego. I’ve come to see that, and I’m not pretending otherwise. I’m sure if you asked around, there are LPs who’d say I’m overly egoistic. Maybe they’re right. But I don’t try to hide it.

That said, I’ve also learned to distinguish between ego and conviction. In all my time doing this, no one has ever given me a compelling quantitative or qualitative argument for why our approach at Deciens won’t work. And if someone could, I’d gladly change it, because I’m not only intellectually invested in our strategy, I’m a massive stakeholder in it. I want it to succeed, and I care about results more than dogma.

Now, a lot of people have told me that what we do isn’t for them. That’s fine. I’ve come to see that as very different from saying it doesn’t work. There are plenty of reasons someone might not want to partner with us and most of them are valid. We’re not the right fit for many people, and I’m not trying to be. I’m trying to be the right thing for our people.

But let’s be clear, I’m not reinventing venture capital out of thin air. There’s this famous quote from Isaac Newton about standing on the shoulders of giants. What people don’t talk about enough is: whose shoulders are you standing on?

That choice matters. And I know whose shoulders I’m standing on.

When I talk about removing existential funding risk from a business model, that’s not some radical idea. That’s Buffett. That’s Munger. When I emphasize compounding, tax efficiency, low dilution, and capital efficiency—I’m borrowing from Gurley, Moritz, Galbraith, Keynes. These are principles that have stood the test of time.

So when people say, “Dan’s kind of radical,” I actually think I’m rather conservative. I’m talking about building concentrated ownership in companies that grow quickly without raising a ton of dilutive capital. So that when they go public and become titans of industry, the founders still own real stakes. The management teams own real stakes. And our capital partners, the LPs who trusted us, share in that upside.

That’s what this business is supposed to be about. And that’s what we’re building at Deciens.

Benedikt: What did you learn in Fund I and Fund II that had little to do with capital allocation but everything to do with becoming a GP who is building a firm?

Dan: One of the most important things I’ve learned through Fund I and Fund II, something that has nothing to do with capital allocation but everything to do with building a firm, is this:

You have to stand for something.

There are too many venture capitalists in the world. We don’t need more VCs. What we need are courageous capitalists. People with the courage of their own convictions and the capital to back them up. People who are actually building something meaningful, not just following the herd or chasing what’s hot.

This career is hard. It demands an extraordinary amount from you. It requires sacrifice: time, energy, family, travel, psychological endurance. And it’s too damn hard to go through all of that just to be milk toast, or just to be another name on a cap table with no real point of view. If you’re going to do this, you better stand for something that matters.

I’ve always loved Hamilton—the musical. I know I’m not the only one. But there’s this one line that’s always stuck with me. It’s from the dialogue between Alexander Hamilton and Aaron Burr. Hamilton says to Burr: “If you don’t stand for something, what will you fall for?” And I think about that all the time.

Because even having top 5% performance in this business isn’t enough. It’s necessary, but it’s not sufficient. Excellence is the entry point. What separates you is whether or not you have the guts to be about something. To take a stand. To build a firm with a real identity and a real purpose and then back that up by delivering the goods.