Pavel Prata, founder of Murph Capital, shares his unconventional journey from Belarus to Silicon Valley and across the venture ecosystem—from startup fundraising and venture investing to investor relations and allocating capital to emerging fund managers. Pavel shares the first-principles framework he uses to evaluate emerging managers: understand whether venture is a natural extension of their journey, look for genuine conviction, identify their unique superpower, and keep the strategy simple. He also explains why the best VCs focus on serving founders and how LPs can determine whether an investor adds value beyond capital.
Pavel Prata, founder of Murph Capital, shares his unconventional journey from Belarus to Silicon Valley and across the venture ecosystem—from startup fundraising and venture investing to investor relations and allocating capital to emerging fund managers.
Pavel shares the first-principles framework he uses to evaluate emerging managers: understand whether venture is a natural extension of their journey, look for genuine conviction, identify their unique superpower, and keep the strategy simple. He also explains why the best VCs focus on serving founders and how LPs can determine whether an investor adds value beyond capital.
In this episode, you'll learn:
[05:25] How Pavel found his natural advantage by recognizing what he was—and wasn’t—best at in venture.
[10:31] Why an unconventional background can become a feature rather than a disadvantage.
[12:11] Why Pavel started Murph Capital to back the next generation of emerging fund managers.
[18:16] Why the best VCs should focus on serving founders and bringing value beyond capital.
[24:22] What LPs should understand before investing in emerging managers.
[29:40] How Pavel evaluates fund managers through first-principles thinking, their natural path, and genuine conviction.
[32:40] Why every emerging manager needs a clear superpower—and a strategy simple enough to understand.
About Pavel Prata
Pavel Prata is the founder of Murph Capital. His experience spans startups, venture investing, fund operations, investor relations, and the LP side of venture. Originally from Belarus, Pavel built his career across different parts of the venture ecosystem before launching Murph Capital, where he focuses on the emerging-manager market.
About Murph Capital
Murph Capital is a new media, research, and community platform for emerging venture fund managers and LPs. It combines curated industry insights, original research and open-source data with a community designed to build stronger relationships between emerging managers and capital allocators.
Subscribe to our podcast and stay tuned for our next episode.
[00:00:00] Pavel Prata: And you also mentioned that pedigree matters. That's right. And sometimes you just need to be a little bit retarded. You shouldn't know how the ecosystem works, 'cause if you know that, you see a lot of restrictions and risks, et cetera. And I was like pretty new to the US. I had nothing to lose, so I just wanted to build things on my own, and I didn't care what other people will think about it.
[00:00:33] Gopi Rangan: You are listening to The Sure Shot Entrepreneur - a podcast for founders with ambitious ideas. Venture capital investors and other early believers tell you relatable, insightful, and authentic stories to help you realize your vision.
[00:00:54] Welcome to the Sure Shot Entrepreneur. I'm your host, Gopi Rangan. My guest today [00:01:00] is Pavel Prata. He is the founder of Murph Capital.
[00:01:04] Now, over the years, the venture ecosystem has grown a lot. There's a lot of fresh blood, new thinking, young people who have come into the ecosystem. It's great to see the ecosystem growing. So we have Pavel, who's actually from Belarus, and he moved to Silicon Valley a couple of years ago. He's the founder of a firm that invests in venture capital funds.
[00:01:28] We're gonna find out from him what he sees in today's market, how he makes investment decisions, and what gets him excited, and how does he choose the GPs or VCs he chooses to work with. Pavel, welcome to The Sure Shot Entrepreneur.
[00:01:43] Pavel Prata: Yeah, thanks for inviting me, man. Really appreciate that.
[00:01:46] Gopi Rangan: So you're from Belarus, and a couple of years ago, you moved to the US, and now San Francisco Bay Area is your home. Can you walk us through that journey?
[00:01:55] Pavel Prata: Yeah, totally. I can start from the very beginning. Not so many people know about Belarus [00:02:00] in general, but I was born there, I grew up there, and to give you some context, what is Belarus, because it actually impacts my whole life and my whole journey.
[00:02:10] So it's more like Wisconsin with a lot of like forests, lakes and swamps, big farming industry, but nothing interesting in particular to do there. So in the late two thousands, I think, due to the huge impact of USSR legacy, we had so many people with great background in math and physics, so we got so many engineers, and many of these engineers founded their own companies, and after that, that was the main catalyst for all of the younger generations to start doing some tech stuff, and I wasn't the exception.
[00:02:44] So I graduated from the School of Business there, but I had this huge impact of like tech guys around me. So when I was on my last year in college, I was like, "Okay, I wanna learn more about like engineering, design, et cetera," 'cause my goal [00:03:00] was I wanna be a product manager. I wanna build products. I wanna do something really cool and then probably launch my own company.
[00:03:06] And I thought that is gonna be a great way to get some hands-on experience first and then start my own journey. And by the way, I also traveled to the US for the first time back in these days and I was so impressed. So after getting back, I started thinking a lot about how to move there and how to do some things there in particular.
[00:03:24] And I was lucky 'cause I was hired by one guy from Silicon Valley, and he was building a company called Archipella, and they were building something like Copilot does nowadays, like code discovery engine, like AI Helper, which helps you write code faster and more efficient. And that was like 2020, and back in those days, capital was relatively cheap.
[00:03:48] I think that was the beginning of ZIRP era. And when I joined the company, I was like, "Okay, I'm gonna be a product manager." But immediately after I joined, I realized that I'm gonna be more like chief of staff [00:04:00] doing all of the things. And one of the thing I was focused on was fundraising. So the founders, they just tell me like, "Hey, you know what? So we're gonna raise. You just need to help us with that."
[00:04:11] So I got lucky to help them with the seed round, and I think we raised around like five million dollars when I was in the company, and eventually twelve. And we raised from Eric Yuan, who is the CEO of Zoom, Bill Tai, Michael Dell from Dell Computers, and some other investors, and I was like, "Oh, fundraising is really cool."
[00:04:31] And actually, that was my first experience with a fundraising game. I really liked it, and I was like, what if I switch the side, and if I start investing in companies instead of helping founders raise capital? So I joined one company in Europe called Parallax. That was like 2021, 2022 probably, and there was a huge hype of, like, on venture studios, and everyone was trying to build something like that.
[00:04:56] So I was the guy who was running the venture arm and venture [00:05:00] studio. I had a lot of experience there, but I wouldn't say that that was the most interesting thing. And the biggest, like, outcome of that is I realized that I'm not the best hunter in the market. And what I mean by that is, like, I think if you work on the investment side, doesn't matter whether you're like an analyst, associate, or principal, you should be, like, a real hunter, hunting, like, the best deals, and I wasn't the bad guy.
[00:05:25] And moreover, I wasn't really interested in any specific domain, whether it was, like, a fintech or VR, IR back in these days. So I started spending time trying to find my authenticity, and I traveled to the US and participated in 500 Global program for fund managers. And that was super cool 'cause I discovered that, "oh, I can actually do an operations and something like that, and I can tread firm building as a product building" 'cause you also have your own customers, which are founders, you have your own [00:06:00] investors, which are LPs.
[00:06:00] You need to build a brand doing all that stuff. And I was like, "Oh, cool, I can build that kind of company." So I started doing operation/investor relations, and I fell in love with that business. And after that, I worked for a couple of venture funds and ended up doing LPs relations at R136 Ventures, which is a multi-stage firm based in Silicon Valley.
[00:06:27] We invested early in eToro. We were the second-largest investor. We invested in Airwallex, invested in some other companies as well. And I've fell in love with the job, just like talking to LPs all days, different types from small high-net-worth individuals to big institutions. And I moved to the US during that time.
[00:06:53] And after that, I was like, "Okay, I spent like two and a half years. I helped them to raise a new fund." So their AUM today is [00:07:00] both $500 million. So what I would like to do next? And I've been having that idea to work on the LP side 'cause I've been spending so much time with them. They ask me a lot of questions like, "Hey, what's going on with the portfolio? What's going on in the market?" But at the same time, I ask them many questions in exchange, like, "How do you source funds? How do you do diligence fund managers? What drives your conviction?" And over time, I think I got some critical mass of experience, and I was like, "I think I'm ready to do something next."
[00:07:31] And during that time, I started Murph Capital, initially as a side hustle project, but right now it's my full-time business.
[00:07:39] Gopi Rangan: Wow, what an amazing journey, and great to see that your side hustle has become your full-time thing. So you started in the role of as an operator at a company, and then you started looking at investing in startups yourself as a, an investor, VC investor, and then you moved to the other side of the table as a [00:08:00] limited partner.
[00:08:00] So you've kinda touched every aspect of the ecosystem. What do you like most about this?
[00:08:06] Pavel Prata: So for me, I think that was a very natural path 'cause I've been talking to a lot of LPs, and many of them, they were like, "Oh, I graduated from the top college in the US, then I started working in investment banking," or something like that, and there was the intentional desire to become an allocator or just working in a high finance.
[00:08:28] That wasn't my story 'cause I didn't think about it, and as you know, like, I moved, like two times at least in my life. I'm like two times immigrant. And for me, that was just a natural extension of my career. I've been really curious about one thing, building products, but then I raised capital, so then I was like, "Oh, that's really interesting. I wanna switch to that." So I started working for a firm and realized that I don't like the investment side, I wanna switch to something different. So I think if you imagine that pyramid of like LPs, [00:09:00] VCs, founders, and final customers, I've been seeing that all, and now I'm like on the top of my pyramid. I'm not bragging about this, but for me, that was something cool.
[00:09:11] And another thing is I've been always dreaming about building something really big and just overcome really hard challenges, working on the hardest problems possible. And when I first time started talking with LPs and they asked me like hundreds of questions about like portfolio construction, how you do this, how you do that, the valuations, what's happening in the market, and you need to have that puzzle in your head, I was like, "Hell no, I can't do that."
[00:09:39] But over time, it's just because that was so complex for me, I started like taking everything into small pieces, and I realized, like, "okay, this is how it works." And when you have this understanding, like you know how that works, and you now can see the connections, you can make some bets, you can try to predict the future, that was [00:10:00] super impactful for me, I would say.
[00:10:03] Gopi Rangan: Very, very interesting. The whole Silicon Valley ecosystem started with the idea that pedigree doesn't matter. You don't have to have graduated from certain schools. You have a sharp mind, and you're very interested in executing. Small group of people come together and build great things. That was the culture.
[00:10:21] But over the years, now people have started building brands and pedigree matters a lot more. It's delightful to see that you're actually going back to the roots of let's build from passion.
[00:10:31] Pavel Prata: I would say that, to be frank, like, I got some requests to go to the interview and being interviewed for investor relations role or something like that, but I've been realizing the competition is insane.
[00:10:45] First of all, like, English is not my first language. I'm from Belarus. Not so many people know about that country. And when you talk to people, I was like, with the hustle mentality, I'm still with the hustle mentality, but I was trying to tell them like, "Hey, this [00:11:00] is how I see the world. This is how it should work."
[00:11:02] Mm-hmm. I had my own view on that world. So I was super passionate about that, but at the end of the day, they made a choice to, like, hire someone with a better background- Mm-hmm ... more like native culturally, et cetera. And then at some point, I realized that actually, that can be my benefit. So I can just use my own, not mentality, but the way how I speak, the way how I think, the way how I reflect, the way how I see this world as a feature, not as a bug.
[00:11:29] And after that, I started Murph, and I was like, "Okay, I'm gonna give myself like three months," 'cause I think that VC LP world is really archaic, but at the same time, I'm so passionate about that, I just wanna change, like, how it should look like, and I wanna make venture, like, sexy again. So I was like, okay, I started with my own vision of the industry, and I would say that that was the best decision of my life so far.
[00:11:55] Gopi Rangan: I see that you're living your dream.
[00:11:57] Pavel Prata: Yeah, kind of.
[00:11:59] Gopi Rangan: So you started [00:12:00] Murph Capital as a side project.
[00:12:02] Pavel Prata: Yeah.
[00:12:03] Gopi Rangan: What inspired you to start Murph Capital? What is the vision that took you to the point to say, "I think the world needs to see something like this"?
[00:12:11] Pavel Prata: So there are two things. First of all, maybe for listeners, like what is Murph Capital?
[00:12:17] So we're building like a brand first fund of funds to back the next generation of emerging managers, like fund one, fund two, sub $100 million. The second thing is like where the inspiration comes from, and I would say it based on two things. The first one is like passion, and I've already like mentioned that.
[00:12:41] Like, I've been really passionate about talking to LPs all days. I just love this world, and this is the best thing about this job, just talking to a lot of like wealthy and interesting people about like what's going on. And the second thing is opportunity. So I've been like [00:13:00] super focused on that small world, and I saw an opportunity when I just moved to the US.
[00:13:05] And my first impression was like VC/LP world is really archaic. I thought that it should work differently. For me, it was more like high finance world with a lot of really like wealthy guys doing deals based on their relationships and introductions and legacy networks. And at the same time, I've been having a lot of friends who are emerging managers and founders, and specifically in New York and SF, you can feel that vibe, like what kind of like exciting things, crazy and interesting things happening between them.
[00:13:39] So they're like digitally native, spending a lot of time on X, writing essays on Sub Stack, hosting dinners, creating residencies, consuming insights like daily from TBPN, MTS or any other shows, whatever. And I was like, "Oh, that's cool." And at the same time I was [00:14:00] like, "Why nobody builds that for fund managers and LPs?"
[00:14:04] And for me, that was the answer, and I started, like, digging deeper and more, and I noticed that there is a new generation of emerging managers coming. I mean, like guys in their thirties raising their small funds, and they don't need to be in one hundred percent of the cases, like successful exited founders like it was twenty years ago.
[00:14:26] Today, they might be like engineers, operators, or just doing any other job. And then if they have this unfair edge, they can become venture capitalists, and access to become a venture capitalist has democratized. So now they can launch their ten million dollars vehicle really quickly on AngelList, let's say.
[00:14:46] And I was like, "Cool." So these guys, they have a different mindset, and I think allocators, they should talk to them differently, and they should build a different brand for them. And the last thing [00:15:00] was, so at Murph Capital, we're really like research-driven. We spend a lot of time doing data drops, researches, analysis, like on what's going on in the industry, and we recently dropped the second part of our big fund of funds research.
[00:15:13] And one of the thing was like how fund of funds started in general. In like roughly eighty percent of the cases, big guys from endowments and institutions who spent like decade and more there, they spun out, they started their own firms, and they were like, "Okay, now we have capital." 'Cause in the most cases their previous employers backed them, they gave them money, and now fund of funds managers, they're like, "Okay, now we're gonna split that capital into small chunks and gonna invest in emerging managers."
[00:15:47] And there was no competition on that level, 'cause if you're an emerging managers, you will actually take money from anyone in the market. And I was like, "Nobody builds a brand the way how this started." It's, [00:16:00] it's not ridiculous, but a little bit strange for me, and I wanna fill that gap. I saw the old boys club, real archaic world.
[00:16:08] Nobody builds a brand, but the new generation of emerging managers is coming. What if I build something like FirstRound did in two thousand and six? Or what Andreessen started in two thousand and nine when they had a team of like twenty marketers, and they've been building a platform from the day one, and now they have a16z New Media.
[00:16:28] What if I do something like that for fund managers? Would it be cool or not? So I gave myself like three months to start at least with something, and when I started like doing what I want to do, like actually execute the things to make this world the way how I see it, I got a lot of feedback from both GPs and LPs.
[00:16:49] They were like, "Oh, what you working on? 'Cause it looks really cool. We love your reports. We love your newsletter. And I felt like, okay, this is the first single, kind of like product market fit, but [00:17:00] I realized that people love that. They're really curious about that, and I could build something bigger with that.
[00:17:05] So I think that was the inspiration, like deep focus with a huge passion and the opportunity I saw to change this VC/LP world. And you also mentioned that pedigree matters. That's right. And sometimes you just need to be a little bit retarded. You shouldn't know how the ecosystem works, 'cause if you know that, you see a lot of restrictions and risks, et cetera.
[00:17:33] And I was like pretty new to the US. I had nothing to lose, so I just wanted to build things on my own, and I didn't care what other people will think about it.
[00:17:43] Gopi Rangan: Fantastic. I'm really enjoying this conversation. I see a thoughtful approach to how you launched Murph Capital, starting with the gap in the market and data-driven thesis approach that shows how the ecosystem works, and then you find opportunities [00:18:00] using that information.
[00:18:01] I heard you say a little earlier that founders are your customers as a VC, and LPs provide capital, but now you're an LP. When you hear a VC say that, how does it make you feel? They don't make you feel like you're the customer. The founder is actually the customer.
[00:18:16] Pavel Prata: Yeah, I think it's fair. I think the GP's job is to do two things: raise capital from one side and deploy capital to the other side.
[00:18:27] This is like a two-side job, and I'm fine with that, and I would be much more happy when GPs spend time serving their founders rather than serving me. I'm fine with that because at the end of the day, that's the only thing that matters, like how close GP is to the founders and what access they have, what power of network they have, and how they serve them.
[00:18:54] 'Cause this industry is about trust, and it's a decade-long game. So [00:19:00] you should be best at serving founders. And by being best, I don't mean to, like, actually ask them like, "Hey, where do you need help? Where do you need help? I can help you with this or with that." It's like be really thoughtful about who you back and how you help them.
[00:19:16] And in many cases, you just don't need to help them until they ask for the help. So I'm absolutely fine when GPs say that like, "Hey, this is how we serve founder." And many GPs, I spoke with many of them, like emerging managers, their main artifact when they're saying like, "Hey, you can check our deck and data room, all of these things, but the best way, just talk to our founders, both maybe who are written off, maybe with some potential fund returners, and ask them about, like, whether I was useful and helpful to them or not, whether I brought them some value besides capital."
[00:19:55] So that's the main indicator.
[00:19:57] Gopi Rangan: Great. I see how you articulate this [00:20:00] complicated thought process. Who's your real customer? You published two reports, and the second report recently was released. What are some insights you found through the analysis when you -- researched this data?
[00:20:12] Pavel Prata: Our goal was actually to look at the market and understands how it works, whether it's a new thing or old thing, how they allocate, what kind of questions they ask, where do they get capital from, and what drives the investment decisions.
[00:20:29] And the first thing, and this is very basic. Actually, I would like to use some numbers, but I'm not like well-prepared for this conversation in terms of numbers. You can definitely check out with Substack. But the first thing is like eighty percent of all allocations are happening on the US market, and it's just because of the nature of that country, its laws, and how historically it's been evolved.
[00:20:52] So there's so many players here, starting from high-net-worth individuals, going to family offices, [00:21:00] big institutions, and endowments. And all of them use their capital as a fuel for the next generation of emerging managers. So there are a lot of transactions happening specifically here. And if you look in any other markets, let's say China, it's only driven by the government, especially over the last couple of years.
[00:21:18] So it's impossible to launch your own firm there, which not gonna be controlled by the government. In the Europe, it's a kind of like not similar thing. It's a little bit different, but the main concept is the same. Like government plays an important role there. There are not so many institutions that I think the European Bank plays a crucial role there 'cause it backs all of the brightest emerging managers there, and the whole ecosystem of LPs is not that active.
[00:21:48] And there are a lot of like legal restrictions also in terms of like fundraising, whether you can disclose whether you're raising or not, which is kind of like similar to five oh six [00:22:00] regulations in the US, whether you can say publicly that you're raising a fund. Another thing is that backing emerging managers, it's kind of like new thing.
[00:22:08] I don't remember the exact number, but around like seventy-five percent of fund of funds were founded after 2020. And there are some, like, real old guys starting in, like, '90s. I might be wrong, but Accolade is a great example and some other firms. Then in two thousand and ten, we had Sindona and Michael Keem, how it started, and they got pretty successful.
[00:22:31] But all other fund of funds, they started like much later, maybe starting from two thousand and seventeen. And there are a bunch of reasons for that, but I think the main one is like there were no cases like of successful emerging funds.
[00:22:47] You just couldn't compare the data between like big mega funds and small emerging funds. And there were some real great examples, like probably the most famous one is like Lowercase with Chris Sacca and his [00:23:00] first fund, two hundred and four X DPI, allegedly he got in that fund, and starting from that, there was like early two thousand and ten.
[00:23:10] We got a new wave of emerging managers with the first funds. And because of the lifetime of the fund, like ten years, close to 2020, we could check the benchmark and realize like, oh, these funds, they play a different game, but they can drive alpha. And after that, a lot of players, they started like thinking about launching their own fund of funds.
[00:23:36] And some like big endowments and institutional players, they started looking at that even before, but that was just a small part of their mandate. And for some of them, it's growing. And based on my conversations over the last like year or two, so many family offices and institutions in the US, they're increasing their mandate to emerging managers. At least they just [00:24:00] want to play this game for a while.
[00:24:02] Gopi Rangan: The ecosystem has grown a lot, and it's great that you're bringing more transparency through your research reports. I want to ask this question both from the LP perspective and from the VC/GP perspective. What is your advice to new LPs entering the ecosystem?
[00:24:18] What are things that they can do right to establish themselves?
[00:24:22] Pavel Prata: I can tell you from the like theory perspective, from the practical perspective as well. Of course, there are some basics like venture asset class and like backing emerging managers in particular, which is like a sub-class, I would say, it's like high risky, which is obvious. The lifetime like ten years and now it's gonna be more like twelve or fourteen. Highly illiquid, and you should keep that in mind first. The second thing is like you should actually understand what kind of game you are playing when you back emerging managers and when you back established funds.
[00:24:59] [00:25:00] Nowadays, in like 2026, based on our previous research, we dropped it like couple of days ago, seventy percent of capital is allocated to mega funds. And that's fine because LPs want to make safe bets. Nowadays, mega funds, they accept really small checks starting from one million.
[00:25:20] Capital is not cheap anymore, and probably for lack of capital they're trying to raise as much as they can for the AI era. So now these mega funds, they can do everything from seed until like pre-IPO, and they can do everything in different verticals where it could be like an AI infrastructure, biotech, crypto, or something other.
[00:25:44] So for most of the LPs, that's the safe bet. But if you wanna back emerging managers, you should understand that this sub-asset class is different. The rules how to underwrite fund managers is different. It's much more risky, and you should have like your [00:26:00] own strategy. You should work on that full time.
[00:26:02] That's my personal opinion. It's a full-time job to find out the best fund managers, emerging managers. And I think what's also changed is like ten years ago, if you're an LP and you wanna invest in emerging manager, there is no competition. So if someone is raising, you can say like, "Hey, I wanna join. I wanna give you a small LP check." They will accept it for sure. Nowadays, the competition has increased And the best fund managers I spoke with, they're pretty selective about like what kind of LPs they would like to work for, for fund one, and when they're raising for fund one, they also think about like fund two and fund three.
[00:26:43] Like they re-upraise who will support them in the next fund or not, and in the most cases is like, "I wanna have one anchor, like thirty percent of the fund, then couple of institutional family offices, some other investors, and the rest ten percent I will reserve for my early supporters [00:27:00] like ex-colleagues, friends, whatever."
[00:27:03] So what I mean by that is like competition is high, so just do that full time, keep all the risks in mind, and if you do that properly, you will get access to the best fund managers 'cause it's still a lot of like not legit GPs who are just chasing this desire of being a venture capitalist.
[00:27:26] Gopi Rangan: Not all VCs are of the same type. The ecosystem is very nuanced. There are bigger funds, there are emerging managers, and even within emerging managers, fund one, fund two, fund three, and sector-focused, geography-focused, or solo GPs, not solo GPs, many other nuances. And pick your lane and specialize, focus on that, get really good at understanding that ecosystem, and then you start investing in those venture funds.
[00:27:52] Pavel Prata: Yeah. I would say that nowadays there are three like types of funds. First are like emerging funds. There are a lot of definitions like [00:28:00] who's emerging manager, but for me and my thesis at Murph is like fund one, fund two, sub $100 million, doing pure early stage like pre-seed and seed. Another category, and this is the third bucket actually, mega funds like firms with the AUM above one billion dollars with established brands and now, as I said, they're doing almost everything.
[00:28:20] And in between them, they're like multi-stage generalists on like fund four, fund five with a mediocre performance, not any AI hot companies in their portfolio, which might be okay, but still they're having a lot of troubles just to survive 'cause they're stuck in between. They're not emerging anymore. LPs can judge them based on their performance, not just what they show in the decks and their narratives, and they're not like mega funds with like huge established brands anymore.
[00:28:57] Gopi Rangan: Let's talk about GPs. Their main job is [00:29:00] to find alpha. What are some mistakes that you've seen emerging managers make? How can they avoid them?
[00:29:06] Pavel Prata: To be frank, I can't judge them, and only time will show who actually made any mistakes and who was right. 'Cause it's like the same principle. You should follow, like, non-concensus ideas and maybe underwrite outliers. But I follow, like, some basic principles how I evaluate fund managers. And frankly, I just had a conversation this morning with another LP, and we had, like, the same idea. So my taste, my underwriting taste is evolving over time.
[00:29:40] But I follow a few foundational principles I developed so far. The first thing is I really look at first principles thinking, like how fund managers understand their place in the ecosystem and whether they have the puzzle in their head, kind of like the [00:30:00] equation with a lot of numbers and variables.
[00:30:02] The best people first, they're really good at articulating ideas, their past investment decisions, how they look at the markets, what mistakes they made. And the second thing, this is very basic, but I think it's important just to see whether people decided to be a venture capitalist, which is a natural extension of their career, or whether they're just chasing that dream to become a VC.
[00:30:30] And in the best scenarios, so these guys, of course, they might have different backgrounds, but the way how they decide to become venture capitalists is like, "I've been doing something for a while. I've been, like, investing for a while, and I realized that at certain point, I don't have enough capital to back founders I believe at, and my bets, they're, like, partially rise.
[00:30:57] I have some markups or whatever, so I need, [00:31:00] like, an external leverage in the form of capital. So I don't wanna use my own money right now. I can raise something from the outside." And that's why I usually start from, like, very, very beginning, even, like, with a childhood years, something like that, in college years.
[00:31:17] Like, what was your path to venture? How did you realize that you wanna become a venture capitalist? I can find a lot of information through their career and understand where they're jumping from one thing to another, or whether that was, like, an organic path. I can also look at their, like, early ages 'cause, you know, you can find a lot in people's stories about their early school years or something like that.
[00:31:41] Some of them want to just become really successful 'cause they wanna prove something to their parents or their friends. And there are a lot of essays on the internet, you can find them, about child traumas, something like that. But I just love people's stories and how they articulate these ideas. So natural path is a crucial thing for [00:32:00] me.
[00:32:00] And then conviction, and this is kind of like a broad definition, like what is conviction? But I think it's very connected with the first thing I said, like how people articulate their ideas. And you can just start asking them a lot of questions about, like, what kind of founders you backed in the past?
[00:32:17] Why you backed them? What deals you missed? What are the best deals? How you think about the future of your portfolio, et cetera. So you can ask a lot of those questions, and you can listen how people articulate their decisions, and you can just learn a lot from them and then distinguish people who are actually, like, high conviction or whether they're just using these words for their decks just to sell their fund.
[00:32:40] And the last two things are pretty simple. The first one is superpower, which is, like, really obvious. Something should trick during the first meeting, like, "Hey, this guy is special." They have something like an unfair advantage. They're better at picking, they're better at sourcing, they're better like, at getting access to the most [00:33:00] interesting founders on the market.
[00:33:01] And what most GPs miss is like they just don't understand it, and this leads to the last point, which is simplicity. And this is like the thing I would like to tweet about maybe next week, but a lot of fund managers, they just overcomplicate and over-engineer their funds and their strategy and what they're trying to build.
[00:33:22] But it should be literally like really simple, like how you think that was a natural path, you have high conviction, you have a superpower, you're better at sourcing, picking, winning, helping, something like that, one of these things. And yeah, it should be like easy to read like this.
[00:33:39] Gopi Rangan: It's great to see you step by step articulate what you look for in a GP, and it's very rare to hear an LP say these things. You want to see the simplicity despite all the positives that you notice in the VC, including their superpowers, their ability to form high conviction when there's so much ambiguity in investing, and your focus on the [00:34:00] natural path, the authentic focus on why they are VC, not just carried away by glamour.
[00:34:05] And some VCs do get carried away by glamour, and you can see that, the superficial aspect. The depth matters a lot for you.
[00:34:12] Pavel Prata: Yeah, but it doesn't mean that I'm looking at spin-outs only, let's say. It's not my case. So by natural, I mean like that was the only thing they could do in their life. So they reach a specific milestone. They realize, like, "my network is really nice, and people from my network, they start companies, these companies grow super fast, and I would like to benefit from this, so I want to start my fund." Or if you're like a great research person from, let's say, OpenAI, Anthropic, you're really good in the AI space and you know what's going on in the industry, so you can better evaluate best scientists in this domain.
[00:34:54] So that's also the natural path 'cause sometimes LPs are really confused by that word, and they [00:35:00] think that the only natural path is like to like being a successful exit founder, then starting doing like some angel investments and then becoming GP, or just been working for a big firm for a while, then start doing your own fund. But there are much more ways to do that, especially now.
[00:35:19] Gopi Rangan: I like how you started with first principles thinking, and I strongly believe in that philosophy as well. You are a new entrant into the LP world. You understand the VC ecosystem. You were at a VC firm. You've also been on the startup side. So you've seen a full spectrum of the ecosystem.
[00:35:35] What is one thing that you would like to see change in this ecosystem to make it better?
[00:35:41] Pavel Prata: That's a good question. I don't think that I have a very, like, detailed answer. I'm just thinking about it all the time, what could be better. But there are so many things going on first, and there are so many different levels, like LP level, GP level, [00:36:00] founders level, and all of these players, they have their own incentive.
[00:36:03] Of course, I'm dreaming about, like, allocating more capital to emerging managers 'cause they actually are the guys who are, like, backing startups really early, taking the risks and making venture as venture as it should be. But as I said before, I totally understand the incentive of LPs. They can now back only mega funds, and they're fine with that.
[00:36:27] It's really safe. They can get hot logos. They can cover all of the rounds, like from early stage to late stage and different verticals. So that's the thing I would like to change. It's just because I'm a huge believer in, like, emerging managers industry. But there are some other things, like companies should go to IPO faster, management fee structure and like GP commit should be different for mega funds in comparison with emerging funds. There are a lot of ideas, I think, and, uh, probably I need to [00:37:00] write something about this in the future.
[00:37:01] Gopi Rangan: This is very exciting. You're getting started now, and I hope that you make a lot of these changes happen.
[00:37:07] Structurally, there are things that we can improve in the ecosystem. We're coming towards the end of our conversation, and I want to ask you about your community involvement. Is there a nonprofit organization you are passionate about? Which one?
[00:37:20] Pavel Prata: I'm doing a lot of things like hosting like dinners and events and generally connecting GPs with LPs right now. The goal of the event is actually to connect GPs with LPs. And as I usually say, that industry is about like trust, and it's a decade-long game. What I usually say to fund managers, always get on the plane and talk to LPs in real life.
[00:37:49] I'm just trying to be like a connector for them because when you do something like this for them, and let's say you facilitate transactions between them, someone is raising, someone is investing, you [00:38:00] build your aura, something like that, and it's compounding over time.
[00:38:05] Gopi Rangan: Well, the sector is getting competitive. It's good to have a lot of these things supporting every LP, just like how VCs fight for deals and just like how founders are also in a very competitive world.
[00:38:16] Pavel, thank you very much for spending time with me. Thank you for sharing a lot of insights from your personal experience and specific examples on how you think about the ecosystem, how you make investment decisions, and why you started Murph Capital. I look forward to sharing your nuggets of wisdom with the world.
[00:38:32] Pavel Prata: Yeah, thanks, Gopi. Thanks for the invitation. I appreciate that.
[00:38:37] Gopi Rangan: Thank you for listening to The Sure Shot Entrepreneur. I hope you enjoyed listening to real-life stories about early believers supporting ambitious entrepreneurs. Please subscribe to the podcast and post a review. Your comments will help other entrepreneurs find this podcast.
[00:38:53] I look forward to catching you at the next [00:39:00] episode.