# Letter #88: Ho Nam  ## Metadata - Author: [[KG from A Letter a Day]] - Full Title: Letter #88: Ho Nam - Category: #articles ## Highlights - Like most early stage VCs, we typically reserve one dollar for every dollar invested in the initial round.  In practice, however, across 100+ companies over 20+ years, we’ve ended up investing far less than the amount reserved (about 60 cents to the dollar, or 0.6x the initial investment, on average). ([View Highlight](https://read.readwise.io/read/01h23vkx6hbdbknwv1hwxnjkz3)) - We have committed 5 to 10x, and, in a couple of cases, more than 100x our initial investment (rather than 0.6x). We may invest across multiple funds and through [SPVs](https://substack.com/redirect/f5eaf6bf-d5b2-4c80-a39a-31adaaa46e96?j=eyJ1IjoiMmM0azZkIn0.fKTpwcSrHIeXRiRPxDM-ZUpMrqSfLy7-EDL3pQvEmq4) that may be larger than entire funds, just to invest in a single round. Some people might think that is nuts.  Given the history of bubbles and crashes in the venture industry, paper gains are viewed with great suspicion.  For LPs, what counts is “ [the moolah in the coolah](https://substack.com/redirect/55671606-6456-40a7-b0cf-82edaa625733?j=eyJ1IjoiMmM0azZkIn0.fKTpwcSrHIeXRiRPxDM-ZUpMrqSfLy7-EDL3pQvEmq4) .”  So why would we not take some money off the table, return capital to LPs, and increase [DPI](https://substack.com/redirect/ce6e3965-eaed-4fa4-a7e5-e6c35cf0d358?j=eyJ1IjoiMmM0azZkIn0.fKTpwcSrHIeXRiRPxDM-ZUpMrqSfLy7-EDL3pQvEmq4) ? ([View Highlight](https://read.readwise.io/read/01h23vpg5qdre18h9ebw2yvc69)) - Does the company generate cash ([View Highlight](https://read.readwise.io/read/01h24rwyv73d8f9x1hb702j9r5)) - What is the moat (or competitive advantages)? ([View Highlight](https://read.readwise.io/read/01h24rx3k405ns1y6996v77zg3)) - How do we feel about the relationship? ([View Highlight](https://read.readwise.io/read/01h24rx7w0sw52epsk9cra0kjx)) - How much liquidity do you need?  How much liquidity do you want? ([View Highlight](https://read.readwise.io/read/01h24ryxxyd5x5dt26xsf1eyrd))