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Ho Nam20 June 2021

Special: Ho Nam from Altos Ventures — A Different Approach to VC

3Frameworks
13Insights

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Frameworks in this episode

Strategy6 steps

First Base Capital Efficiency Discipline

Get curious at $10-20M, protect founder control, and target acceleration past $100M.

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Leadership5 steps

The Hedgehog vs. Fox Founder Filter

Find the founder who found their one true life's mission, not just another clever operator.

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Finance4 steps

The 'How Do You Know?' Three-Question Test

Money, moat, and relationship — the three filters Altos uses before going all-in on a company.

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Insights & moments

The myth-busts, hot takes, explainers, and tools worth keeping.

Hot Take· 1

Hot Take

Zero Fees, Zero Copycats: Why No One Steals the Buffett Partnership Model

Ho expresses bafflement that more fund managers don't copy Buffett's original partnership structure (no management fee, carry only above a hurdle) despite it being publicly known and philosophically superior in his view.

  • Altos runs SPVs with zero management fees, charging only carry.
  • Ho contrasts this with typical hedge/PE funds that prize guaranteed 2% fees over aligned incentives.
  • He argues adopting this structure requires ideological conviction, not just belief in one's stock-picking skill.

“I cannot believe people do not copy the Buffett, the BPL partnership structure.”

Ho Nam

“No one seems to want to copy me.”

Ho Nam
#fund structure#management fees#Buffett Partnership#alignment

Explainer· 3

Explainer

Why Selling Secondary Shares Forces VCs to Become RIAs

Ho explains the SEC technicality that triggered Altos's registration as a Registered Investment Advisor: once secondary purchases exceed 25% of any single fund, the entire platform must register.

  • VCs are normally exempt from SEC registration because they're seen as job creators.
  • If 25% of any one fund is secondary purchases, that triggers RIA registration for the whole platform.
  • The $30M Woowa Brothers SPV was 100% secondary, which triggered Altos's registration.

“if 25% of that one fund happens to be secondary, then that triggers the registration requirement for the entire platform.”

Ho Nam
#RIA registration#SEC rules#secondary shares
Explainer

Cross-Fund Investing: From LP Taboo to Trusted Tool

Ho describes how Altos moved from apologizing to LPs for cross-fund investing (widely considered bad practice) to earning enough trust to raise a dedicated Korea fund built around doubling down on Woowa Brothers.

  • Cross-fund investing is considered a VC/LP taboo, often a sign of poor reserve planning.
  • LPs initially resisted but gradually gave Altos more rope as results improved.
  • Altos raised a Korea-only fund specifically to keep investing beyond the 15-17% international cap in its US funds, leading first with Woowa Brothers.

“cross-fund investing is a no-no. It's a no-no, people really don't like it.”

Ho Nam
#LP relations#cross-fund investing#fund structure#Korea fund
Explainer

Venture as 'The World's Greatest Discovery Mechanism'

Ho reframes early-stage venture not as a series of investments to flip, but as a discovery process that requires committing to build alongside a company for a decade or more after finding it.

  • Early venture deals have no real metrics, so Ho treats the portfolio as a discovery mechanism rather than a series of bets.
  • Discovering an opportunity is only the start — the next 10-20 years determine whether it pays off.
  • The alternative to building long-term is flipping to someone willing to pay for future cash flows today, which he avoids.

“I just no longer even think about the venture deals as investments. I I think about venture, my the venture portfolio as it's just the…”

Ho Nam
#long-term investing#venture philosophy#compounding

Story· 6

Story

How Altos Found Roblox Before Anyone Else

Ho Nam recounts how Altos discovered Roblox through a referral, a partner's 'next Club Penguin' thesis, an exponential engagement growth chart, and a YouTube search that revealed passionate kid-made fan videos.

  • Deal was referred by Mark Weinstrut, who later became Roblox's general counsel.
  • Partner Anthony had a thesis based on Club Penguin's success and Han's daughters' obsession with it.
  • A weekly 7% compounding engagement growth chart translated to 33x annual growth, signaling something real.
  • A YouTube search for 'Roblox' found ~200 shaky camcorder videos of passionate kid creators, a strong qualitative signal.

“If you grab that out in Excel, that is a classic exponential curve that just grew 33x in a year.”

Ho Nam

“And some of these were really shaky videos, camcorder recordings of the computer screen.”

Ho Nam
#Roblox#early-stage sourcing#due diligence
Story

Turning Sellers Into Buyers: The Roblox Secondary Playbook

Altos repeatedly bought secondary shares of Roblox across six separate occasions and multiple SPVs, flipping from considering a sale to becoming a buyer whenever prices seemed newly attractive relative to growth.

  • Altos bought Roblox secondary shares on six separate occasions as opportunities arose.
  • When a buyer's offer came in below what Altos deemed fair value, they decided to buy more instead of selling.
  • The firm ran its own no-fee, no-carry tender process for LPs to choose liquidity or rollover.

“we said, Well, geez, at that price, we're not gonna sell. Actually, we said, at that price, we should be buyers, right?”

Ho Nam
#Roblox#secondary shares#SPV#concentration
Story

The Woowa Brothers CEO Who Kept Growing Into the Role

The founder of Korean food-delivery company Woowa Brothers repeatedly told Altos he wasn't the right CEO to scale further, only to grow into the role each time — from $10M to $100M to a stated ambition of $10B.

  • The non-consensus founder, a designer with debt from a failed first company, built Woowa from scratch.
  • He twice offered to step aside for a 'real' CEO, and both times ended up leading the company to the next order of magnitude.
  • He became the first person from Korea to sign the Giving Pledge, selling shares early to fund giving commitments.

“He came to my partner Han recently and said, uh, you know, look, I think we're gonna take this thing to 10 billion. Like, it's…”

Ho Nam
#Woowa Brothers#Korea#founder development#Giving Pledge
Story

Buying Mattresses in a Crisis: The Select Comfort Bet

Ho shares a public-market example from the 2008 crisis, when Select Comfort's stock cratered and pundits assumed no one would buy expensive mattresses in a downturn — a mispricing Altos judged incorrect.

  • Market commentary claimed no one would buy $3,000-$4,000 mattresses during a crisis.
  • Select Comfort still sold roughly $650 million worth of mattresses during the crisis.
  • Company had management missteps (an overreaching SAP/ERP implementation) but wasn't going to zero.
#public investing#2008 crisis#Select Comfort#margin of safety
Story

'Here Are the Keys': Negotiating With Lenders in 2008

Ho recalls a tense 2008 negotiation where he offered a nervous banker the literal keys to a struggling portfolio company, betting correctly that most lenders don't actually want to operate the business.

  • A struggling portfolio company had stopped payments and needed renegotiated debt terms.
  • Ho offered to hand over the keys entirely rather than be pushed around.
  • Distinguished 'loan-to-own' lenders (who do want control) from typical debt providers (who just want to be repaid).

“I literally, I think I pulled out the keys. Like it's like a mythical keys out of my pocket. It's like, here it is.”

Ho Nam
#debt negotiation#2008 crisis#portfolio management
Story

From Lurker to Tweetstorm: Ho Nam's Twitter Awakening

Ho explains how re-engaging with Twitter to follow IPO sentiment led him to accidentally discover tweet-storming, replying to himself in a stream of consciousness that unexpectedly went viral.

  • Ho re-engaged with Twitter to follow sentiment and analysis around upcoming tech IPOs.
  • He found some Twitter analysis more insightful than professional equity research.
  • A spontaneous thread about investor Arthur Rock turned into a tweetstorm with 700,000+ impressions.
#Twitter#personal brand#public markets sentiment

Q&A· 1

Q&A

Value vs. Growth: 'Two Sides of the Same Coin'

Ho relays teaching from Jack McDonald and Warren Buffett that value and growth investing are not opposing camps, since growth is simply one input into a company's overall value.

  • Buffett reportedly told the class value and growth are 'two sides of the same coin.'
  • Jack McDonald framed growth as just one component of value, not a separate discipline.
  • Altos uses rough revenue multiples only when it doesn't yet know a business deeply; deep knowledge replaces formulas.

“isn't growth just a component of value? Like, of course it is, right?”

Ho Nam
#value investing#growth investing#Buffett#valuation

Takeaway· 2

Takeaway

Practice Public Investing With Your 401(k) Before You Manage Billions

Ho explains why Altos partners self-manage their 401(k)s as public-market practice, arguing VCs should be their own best money managers rather than outsourcing that skill entirely.

  • Altos structured partners' 401(k)s to allow individual stock management as deliberate practice.
  • Ho was surprised early in his career that many VCs, despite being professional money managers, outsourced their personal public portfolios.
  • Decades of small-stakes practice built the conviction needed to now hold serious concentrated public positions.
#public investing#deliberate practice#personal finance
Takeaway

Find the People Who Bet On You With No Track Record

Closing the episode, Ho credits early backer Larry Morris, who honored a fund commitment made in 2003 through a two-year fundraising delay, and reflects on why some LPs back you before a track record while others never will regardless of results.

  • Larry Morris committed to Altos's first institutional fund in 2003 but waited until it closed in 2005.
  • Ho notes some backers commit for personal reasons unrelated to pure data, both before and despite a good track record.
  • He's made peace with permanent doubters, comparing it to skeptics of Warren Buffett despite a 55-year record.

“Find the people who believe in you, who will back you no matter what.”

Ho Nam
#fundraising#LP relationships#resilience