The Full Ratchet (TFR): Venture Capital and Startup Investing Demystified

Nikhil Basu Trivedi of joins Nick to discuss Agglomerators vs. Specialists, the Rise of the Solo-Capitalist, and the Importance of Founder-Investor Fit+. In this episode, we cover:

  • Why did you decide to leave Shasta?
  • What's the plan moving forward?
  • The Rise of Solo Capitalists
    • You wrote a great piece on the rise of this behavior, ‘The Rise of the Solo Capitalists’. What do you think has caused the rise in single GP funds?
    • What are the main benefits to both investor and entrepreneur with this model?
    • What are the limitations and/or downsides of this model?
    • You wrote that an LP said that this model ‘may be the biggest threat traditional venture capital firms have seen in a long time’. Why?
  • Founder-Investor Fit
    • What do you think are the most important things for founders to consider when choosing an investor?
    • There are many firms that don't care about the "fit" per se... they just want to get money into the best deals.  And it can be tough for a founder to turn down the best offer or the biggest name investor.  Do you think that lack of fit can lead to the demise of the company?
    • Do you think that founder-investor relationships/dynamics will change significantly over the next decade?  Why or why not?
  • Agglomerators vs. Specialists
    • Can you break down the types of focus amongst VCs? Agglomerators vs. Specialists?
    • What do you think has caused the rise of the agglomerators?
    • From a returns (TVPI) standpoint, do you think one model is superior to the other?
    • A large, institutional LP said to me this week that he doesn't believe in sector-focused fund models and returns suggest that they underperform.  He only invests in generalists with stage focus.  Have you found that the specialists have underperformed the generalists?
    • What do you think about the future of these models?  Where will the most crowded section be, five years from now?
    • What are your thoughts on rolling funds?
Direct download: FR246.mp3
Category:general -- posted at: 6:00am EDT