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A Texas Viking's avatar

As a new subscriber, I have enjoyed reading your work. However, this post rubbed me raw. As a GP perhaps I might offer a different perspective. Rather than evaluate the GP’s contribution as a % of the capital stack, try evaluating as a % of the GP’s liquidity and net worth. You might find the GP is “all in” even though they don’t have a trust fund to allow them to invest at an “ideal” level. Further, I can honestly say that my effort towards a deal has never been influenced by a couple % more or less of capital that I’ve put in, and further the idea that I would treat F&F is worth less than my own is simply offensive. At the end of the day, people do business with people and trying to quantify an ideal GP based on an average, I believe, is a flawed analysis. I’m not an average GP regardless of my skin in the game.

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Steve Smith's avatar

This is a great and much needed post. I like to ask the non CEO employees how much they and their families invest in every deal and if not why?

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