Limited Partner Spotlight: Nico Mizrahi, Pattern Ventures

Nico Mizrahi is a Co-Founder and General Partner at Pattern Ventures, a specialist fund of funds and co-investment platform exclusively focused on emerging managers. He has over 20 years of experience launching and managing emerging manager fund of funds (FoF) across a range of strategies including long/short equity hedge funds, long-only funds and specialty credit funds. He previously served as Partner and Portfolio Manager at FPA (First Pacific Advisors), serving on the firm’s Management Committee. He started his career at Bear Stearns. He’s also a passionate advocate for underserved youth and mental health advocacy, serving on the boards of OUR House Grief Support Center and College Match Los Angeles.

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EVCA: What was your motivation for starting Pattern Ventures?

Nico: Alex Kassan and I founded Pattern because we saw a once-in-a-generation opportunity to build a firm that operates differently. Our goal is to become the most sought-after partner for top emerging and undiscovered talent in venture capital. Our approach combines decades of experience in both fund of funds and direct investing — Alex in direct investing and me in fund of fund investing.

Pattern isn’t aiming just to be an LP in a fund. Rather, we seek to become an emerging manager’s most productive partner as they establish relationships with long-term capital and build positions in their breakout winners.

Data is a big part of our approach. Over the past year, we built a platform from the ground up that specifically addresses pain points and needs of today’s emerging managers and also allows us to discover hidden talent early. We added a third General Partner, Kyle Thorpe, to bolster our data expertise and capital formation practice.

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‍EVCA: What were a few of your key learnings as you have built and expanded the fund?

Nico: One key learning is that there is a lot of demand for what we’re offering to emerging managers and investors who want to support them. We’re getting phenomenal feedback, which is exciting.

Another key learning is that you only get one chance to lay the right foundation. That led us to bring on Kyle Thorpe as our third General Partner, adding crucial data expertise to our team. His data-driven approach strengthens our sourcing and diligence capabilities. We’re taking an intentional, long-term approach to building infrastructure that improves outcomes across the industry.

For example, last week we launched HARDCAP, a simple platform that streamlines the way emerging managers get in front of the investors that want to invest in them. Fund managers build a profile in sixty seconds and automatically get added to a database of pre-vetted investors who are actively sourcing deals. Our goal with HARDCAP is to make fundraising more intentional. It’s not exclusive to Pattern. We made it intentionally collaborative across a range of supporters of the emerging manager ecosystem. We’ve accumulated an incredible Advisory Board for HARDCAP with a range of impressive organizations and individuals and look forward to sharing more about that shortly.

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What are the most important factors you consider when evaluating emerging managers and funds?

Nico: When evaluating emerging managers, we look beyond just fund strategy and performance. We get a sense of their motivation and personal backstory — where are they from and what drives them to be great investors? We look for managers who have persevered against challenges. For example, an immigrant journey or being the first in the family to graduate college or being raised by a single parent are examples of things that can lead to grit and drive, which is essential in this cutthroat industry.

Their fund model is key, too, of course. We focus on smaller early stage funds with exciting strategies and limited capacity for new LPs. Alignment, vision and scaling discipline also matter. Just as GPs diligence founders, we expect emerging managers to have a clear vision for building an enduring, outperforming franchise.

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What is one piece of advice that you would give to investors considering launching their own funds?

Nico: My advice to investors considering launching their own fund is to stay laser focused on your strategy and strengths. Make absolutely sure this is your passion, as you’ll be a fiduciary responsible for people's money. There will be tough times when you feel alone, but stick to your convictions. Build unshakable confidence in your investment thesis to stay resilient.

Also, recognize you can demonstrate fund-market fit, even before officially launching, through thought leadership and dealflow. The path of a fund manager requires grit, integrity and commitment. Ensure you have what it takes, then stay true to your investing North Star.