The Full Ratchet: Venture Capital Demystified

Shawn Carolan of Menlo Ventures joins Nick on a special Crisis Coverage installment to discuss the Four Fundamentals of Investing; the Future of Micro Mobility; and Hunting Consumer Unicorns. In this episode, we cover:

  • Tell us about your background and path to venture.
  • What's the thesis at Menlo Ventures?
  • Can you explain the "Four Fundamentals" framework for investing and give us a brief description of each?
  • What are you looking for in terms of unit economics?
  • You like to invest in technologies that change everyday life for the better.  Do you have a sense for the needed technologies and then find founders in those areas, or do you identify compelling entrepreneurs that then guide you to emerging technologies that will shape the future?
  • Have you been in the situation where you identified the right consumer trend and technology required to deliver but you picked the wrong startup?
  • Is there a priority of importance amongst the four?
  • Which do you think investors most often get wrong? 
  • Let's talk about consumer a bit...Many VCs think that consumers and consumer behaviors evolve quickly in unpredictable ways.  And b/c of that many VCs avoid consumer.  What's your response?
  • We’ve seen an explosion in Cloud and SaaS recently, and some question whether there’s room for another big consumer company, what is your response to this and which areas do you see the biggest opportunities in?
  • Before the pandemic, the future of scooter companies was murky with challenging unit economics and fleet maintenance... while governments were, in some cases, were imposing regulations and putting a halt to deployment.  What does the future hold for the scooter companies?
  • How do you view these situations, like scooters, where there’s low differentiation and a number of players trying to scale and grab share quickly?
  • Any other micro-mobility trends that you’re watching closely, aside from scooters?
  • Changing gears away from micro mobility and into AI for a bit, why do you think we haven't seen many unicorns in consumer AI?
  • Where (sectors, categories) do you think the initial consumer AI unicorns will come from?
  • Let's say that you have a micro mobility company that is currently operating in 3 cities within one region, grossing $500K monthly and growing 30% month to month.
    • Which 3 data points do you ask for and why?

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