The Biggest Mistake Investors Make When Building a Venture Capital Portfolio
In this episode of “How I Invest,” host David Weisburd sits down with Michael Larsen, Partner at Cambridge Associates, to discuss the nuanced challenges and opportunities in venture capital portfolio construction. Drawing on decades of experience advising leading institutions and family offices, Michael explores why venture portfolios behave differently from other asset classes and highlights the most common mistakes investors make when allocating to venture.
The conversation covers key topics such as the importance of longevity in venture investing, the impact of allocation size, and the often-overlooked role of governance. Michael also shares practical guidance on defining an illiquidity budget, understanding the risks and rewards of co-investing, and why elite limited partners are comfortable with “spiky” returns.
Whether you’re an experienced investor or new to venture capital, this discussion offers valuable perspectives on building a thoughtful, resilient portfolio in a complex and evolving market.
Watch the full conversation below to gain deeper insights into effective venture portfolio construction.
Michael Larsen - Michael is a Managing Director in the Private Client Practice at Cambridge Associates.
About Cambridge Associates
Cambridge Associates is a global investment firm with 50+ years of institutional investing experience. The firm aims to help pension plans, endowments & foundations, healthcare systems, and private clients achieve their investment goals and maximize their impact on the world. Cambridge Associates delivers a range of services, including outsourced CIO, non-discretionary portfolio management, staff extension and alternative asset class mandates. Contact us today.