When IVP recently announced the closing of its 18th fund, I called Eric Liaw, a longtime general partner with the growth-stage firm, to ask a few questions. For starters, wringing $1.6 billion in capital commitments from its investors right now would seem a lot more challenging than garnering commitments during the frothier days of 2021, when IVP announced a $1.8 billion vehicle.

I also wondered about succession at IVP, whose many bets include Figma and Robinhood, and whose founder and earlier investors still loom large at the firm – both figuratively and literally. A recent Fortune story noted that pictures of firm founder Reid Dennis remain scattered “in all sorts of places throughout IVP’s San Francisco office.” Meanwhile, pictures of Todd Chaffee, Norm Fogelsong and Sandy Miller – former general partners who are now “advisory partners” – are mixed in with the firm’s general partners on the firm’s website, which, visually at least, makes less room for the current generation.

Not last, I wanted to talk with Liaw about Klarna, a portfolio company that made headlines last month when a behind-the-scenes disagreement over who should sit on its board spilled into public view. Below are parts of our chat, edited for length and clarity. You can listen to the longer conversation as a podcast here.

Congratulations on your new fund. Now you can relax for a couple of months! Was the fundraising process any more or less difficult this time given the market?

It’s really been a choppy period throughout. If you really rewind the clock, back in 2018 when we raised our sixteenth fund, it was a “normal” environment. We raised a slightly bigger one in 2021, which was not a normal environment. One thing we’re glad we didn’t do was raise an excessive amount of capital relative to our strategy, and then deploy it all very quickly, which other folks in our industry did. So [we’ve been] pretty consistent.

Did you take any money from Saudi Arabia? Doing so has become more acceptable, more widespread. I’m wondering if [Public Investment Fund] is a new or existing LP. 

We don’t typically comment on our LP base, but we don’t have capital from that region.

Speaking of regions, you were in the Bay Area for years. You have two degrees from Stanford. You’re now in London. When and why did you make that move?

We moved about eight months ago. I’ve actually been in the Bay Area since I was 18, when I came to Stanford for undergrad. That’s more years ago than I care to admit at this point. But for us, expansion to Europe was an organic extension of a strategy we’ve been pursuing. We made our first investment in Europe back in 2006, in Helsinki, Finland, in a company called MySQL that was acquired subsequently by Sun [Microsystems] for a billion dollars when that was not run of the mill. Then, in 2013, we invested in Supercell, which is also based in Finland. In 2014, we became an investor in Klarna. And [at this point], our European portfolio today is about 20 companies or so; it’s about 20% of our active portfolio, spread over 10 different countries. We felt like putting some feet on the ground was the right move.

There has been a lot of drama around Klarna. What did you make of The Information’s reports about [former Sequoia investor] Michael Moritz versus [Matt Miller], the Sequoia partner who was more recently representing the firm and has since been replaced by another Sequoia partner, Andrew Reed?

We’re smaller investors in Klarna. We aren’t active in the board discussions. We’re excited about their business performance. In many ways, they’ve had the worst of both worlds. They file publicly. They’re subject to a lot of scrutiny. Everyone sees their numbers, but they don’t have the currency [i.e. that a publicly traded company enjoys]. I think [CEO and co-founder] Sebastian [Siemiatkowski] is now much more open about the fact that they’ll be a public entity at some point in the not-too-distant future, which we’re excited about. The reporting, I guess if accurate, I can’t get behind the motivations. I don’t know exactly what happened. I’m just glad that he put it behind them and can focus on the business.

You and I have talked about different countries and some of their respective strengths. We’ve talked about consumer startups. It brings to mind the social network BeReal in France, which is reportedly looking for Series C funding right now or else it might sell. Has IVP kicked the tires on that company?

We’ve researched them and spoken to them in the past and we aren’t currently an investor, so I don’t have a lot of visibility into what their current strategy is. I think social is hard; the prize is massive, but the path to get there is pretty hard. I do think every few years, companies are able to establish a foothold even with the strength of Facebook-slash-Meta. Snap continues to have a strong pull; we invested in Snap pretty early on. Discord has carved out some space in the market for themselves. Obviously, TikTok has done something pretty transformational around the world. So the prize is big but it’s hard to get there. That’s part of the challenge of the fund, investing in consumer apps, which we’ve done, [figuring out] which of these rocket ships has enough fuel to break through the atmosphere and which will come back down to earth,

Regarding your new fund, that Fortune story noted that the firm isn’t named after founder Reid Dennis as proof that it was built to outlive him. Yet it also noted there are pictures of Dennis everywhere, and others of the firm’s past partners, and now advisors, are very prominently featured on IVP’s site. IVP talks about making room for younger partners; I do wonder if that’s actually happening. 

I would say without question, it’s happening. We have a strong culture and tradition of providing people in their careers the opportunity to move up in the organization to the highest echelons of the general partnership. I’m fortunate to be an example of that. Many of my partners are, as well. It’s not exclusively the path at the firm, but it’s a real opportunity that people have.

We don’t have a managing partner or we don’t have a CEO. We’ve had people enter the firm, serve the firm and our LPs, and also as they get to a different point in their lives and careers, take a step back and move on to different things, which by definition does create more room and responsibility for people who are younger and now are reaching that prime age in their careers to help carry the institution forward.

Can I ask: do those advisors still receive carry?

You can ask, but I don’t want to get into economics or things along that dimension. So I’ll quietly decline [that question]. But we do value their inputs and advice and their contributions to the firm over many years.

There’s obviously a valuation reset going on for every company seemingly that’s not a large language model company, which is a lot of companies. I’d guess that gives you easier access to top companies, but also hurts some of your existing portfolio companies. How is the firm navigating through it all?

I think in terms of companies that are raising money, the ones that are most promising will always have a choice, and there will always be competition for those rounds and thus those rounds and the valuations associated with them will always feel expensive. I don’t think anyone has ever reached a great venture outcome feeling like, ‘Man, I got a steal on that deal.’ You always feel slightly uncomfortable. But the belief in what the company can become offsets that feeling of discomfort. That’s part of the fun of the job.