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

October 2017
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Fri, 27 October 2017

Investor Stories 70: What's Next (Einstein, Galston & Larkins, Cowan)

On this special segment of The Full Ratchet, the following Investors are featured:

-Ben Einstein
-Ezra Galston & Stuart Larkins
-David Cowan

Each investor discusses sectors, drivers and/or
trends that may have significant impact in the
future and are potentially positioned for outsized-returns.

To listen more, please visit http://fullratchet.net/podcast-episodes/
for all of our other episodes.

Also, follow us on twitter @TheFullRatchet for updates and more information.

Direct download: IS70_Whats_Next_Einstein_Galston_Larkins_Cowan.mp3
Category:general -- posted at: 6:00pm EST

Wed, 25 October 2017

144. The 8 Startup Profiles & Those that Make the Strongest Investments (Guy Turner)

Guy Turner of Hyde Park Venture Partners joins Nick to cover founder profiles and the characteristics that lead to the strongest startups. We address questions including:

You've observed over 50 startups, across your portfolio, and have written extensively about founder profiles. What are the two high-level categories of characteristics that you've observed?
Within the inspection characteristics category... what are the three dimensions that matter most?
The first two modes seem to differ primarily on the experience dimension... what are the two modes and what are their strengths and weaknesses?
Mode 3 you call the exec turned founder.... and mode 4 seems to have the ingredients for big outcomes or big flameouts. Walk us through each of these and their defining characteristics.
We've discussed four modes, but based on your framework there should be eight. What about the other four modes?
Do you think modes 1 and 2 work better for all investors or just HPVP?
Dealflow filtering and evaluation... can you use the inspection characteristics?
So we've discussed the inspection characteristics... let's transition to the the second major category, the experience characteristics. Talk more about what they are and how you assess them.
What are the five actions that matter most in startup teams?
How do you handle a situation where the deal comes late and there's already a term sheet and you don't have time to observe these characteristics over time?
What are the five styles that matter most?
Self-reflection, do you and Ira and Tim look in the mirror w/ Hyde Park and consider these expectations
How about for building the team at HPVP... do you apply founder assessment criteria in your hiring?
Are there any soft skills or overlooked founder characteristics that you haven't written about but you look for?
What's your take on the issues w/ ethics, not only amongst founders but at the investor level?

Guest Links:

To listen more, please visit http://fullratchet.net/podcast-episodes/
for all of our other episodes.

Also, follow us on twitter @TheFullRatchet for updates and more information.

Direct download: FR144_Guy_Turner.mp3
Category:general -- posted at: 1:20pm EST

Wed, 25 October 2017

144. The 8 Startup Profiles & Those that Make the Strongest Investments (Guy Turner)

Guy Turner of Hyde Park Venture Partners joins Nick to cover founder profiles and the characteristics that lead to the strongest startups. We address questions including:

You've observed over 50 startups, across your portfolio, and have written extensively about founder profiles. What are the two high-level categories of characteristics that you've observed?
Within the inspection characteristics category... what are the three dimensions that matter most?
The first two modes seem to differ primarily on the experience dimension... what are the two modes and what are their strengths and weaknesses?
Mode 3 you call the exec turned founder.... and mode 4 seems to have the ingredients for big outcomes or big flameouts. Walk us through each of these and their defining characteristics.
We've discussed four modes, but based on your framework there should be eight. What about the other four modes?
Do you think modes 1 and 2 work better for all investors or just HPVP?
Dealflow filtering and evaluation... can you use the inspection characteristics?
So we've discussed the inspection characteristics... let's transition to the the second major category, the experience characteristics. Talk more about what they are and how you assess them.
What are the five actions that matter most in startup teams?
How do you handle a situation where the deal comes late and there's already a term sheet and you don't have time to observe these characteristics over time?
What are the five styles that matter most?
Self-reflection, do you and Ira and Tim look in the mirror w/ Hyde Park and consider these expectations
How about for building the team at HPVP... do you apply founder assessment criteria in your hiring?
Are there any soft skills or overlooked founder characteristics that you haven't written about but you look for?
What's your take on the issues w/ ethics, not only amongst founders but at the investor level?

Guest Links:

To listen more, please visit http://fullratchet.net/podcast-episodes/
for all of our other episodes.

Also, follow us on twitter @TheFullRatchet for updates and more information.

Category:general -- posted at: 1:19pm EST

Fri, 20 October 2017

Investor Stories 69: Exceptional Founders (Olsen, Acunzo, Collett)

In today's special segment the following investors are featured:

Chris Olsen
Jay Acunzo
Mike Collett

Each investor describes an outstanding entrepreneur that
they've worked with and what key traits and behaviors
make for the best startup leaders.

To listen more, please visit http://fullratchet.net/podcast-episodes/
for all of our other episodes.

Also, follow us on twitter @TheFullRatchet for updates and more information.

Direct download: IS69_Founders_Olsen_Acunzo_Collett.mp3
Category:general -- posted at: 4:39pm EST

Sat, 14 October 2017

143. Beacon: Modernizing the VC Firm, Part 2 (Chris Farmer)

Today we publish part two of the interview with Chris Farmer of Signal Fire Ventures. In this segment we address:

Why he's using Beacon to make VC investments when their are numerous other applications that may have more economic value
How he's created an engaged, active advisor network that are also LPs in the fund
What characteristics the best advisors share
Chris' thoughts on the surge in micros VCs and how that has impacted the asset class
Chris' advice for founders raising initial capital
Wrap-up of Key Takeaways & a Tip of the Week

Guest Links:

Signal Fire Ventures
Chris on Twitter
Signal Fire on Twitter
Techcrunch Article: Watch Out, VCs: Chris Farmer Plans To Massively Disrupt The Industry
Part 1 of the interview w/ Chris

Key Takeaways:

1- Deconstructing Beacon

Beacon is a connected platform that starts w/ sourcing but also does monitoring, context, diligence, syndication and most importanty, per Chris, portfolio support. It's a data platform that looks like a Bloomberg terminal for the startup industry. They started building it seven years ago and they employ a full-blown engineering team of data scientists and tech engineers. Beacon tracks a vast array of data on 6M different companies. And Chris started with first principles, asking "what are the KPIs that the management teams of these companies are measuring?"... those are the same elements we should measure with Beacon. It analyzes items including customer behavior, frequency, engagement, CLV, consumer transactions, financial flows, quality of those flows, news sentiment and also team construction and quality, just to name a few.

And signal fire's platform isn't just for the investors. There is a UI for advisors and most importantly founders as well. Founders can utilize heir robust SaaS recruiting platform to address the key need of early stage companies... recruiting top talent. With Beacon, Signal Fire has set out to tech enable the entire value chain of a venture firm from end-to-end. Early indications from folks in my network are that it's an impressive platform indeed.

2- The Prepared Mind

Signal Fire did not coin the concept of "the prepared mind" but Chris does follow it. The approach that came out of Accel has an emphasis on heavy research on existing domains. The creation of market maps that help visualize the landscape and reveal opportunities. In a previous episode, David Cowan discussed his approach to the Space vertical that leverages this methodology. And in Chris implementation, he is constantly refining the maps. He meets with LP experts and founders to go much deeper and broader than they could do w/ data alone. The result is that Signal Fire is often much less bullish on the en vogue sectors and vice-a-versa. Their investment in pizza making robot company, Zume, certainly illustrates their fresh perspective on an oft-ignored industry.

3- The Common Thread of Success

I asked Chris for a common thread that he's noticed across successful startups. And I really enjoyed his response. The common thread in winners are those companies that are doing things full-stack. They are creating an end-to-end solution that is vertically integrated. Where a company can be it's own customer in order to provide a better solution for the end consumer. I discussed this concept w/ Charles Hudson in a previous episode. We talked about finding the place within the vertical supply stack that enforces discipline on the chain and drives the most value. Chris point was compelling in that he looks for startups that own the chain, not just a part of it.

Tip of the Week: Tail Wags Dog -- The Affinity Investor

To listen more, please visit http://fullratchet.net/podcast-episodes/
for all of our other episodes.

Also, follow us on twitter @TheFullRatchet for updates and more information.

Direct download: FR143_Farmer_p2.mp3
Category:general -- posted at: 11:56am EST

Wed, 4 October 2017

142. Beacon: An Engineering Systems Approach to Investing, Part 1 (Chris Farmer)

Chris Farmer of Signal Fire Ventures joins Nick to discuss his firm and their platform, Beacon, a robust data engine that reveals the best sector, market and startup investment areas. We address questions including:

Can you start off with the firm's thesis and your main focus at SignalFire?
You talk about the four big founder pain points that you've observed... what are they?.
Number one pain point is Hiring top engineers... Tell us about his Data platform, Beacon, and how it addresses this pain point?
Sourcing and analysis tool that helps show you where to focus?
Can you give me an example of what you see when you look at a sector, sub-sector or even at the company level?
Does this data really exist with very early-stage startups or nascent sectors, before they've really emerged and have traction?
Sources?
I've worked for companies that had a difficult time getting one database to talk to another. Can you really source unstructured data, from limitless sources and structure it in a way where it's streamlined, uniform, single record and can be used to drive insights?
Do you think about data that is empirical and fixed vs. data points that can be influenced... and if you find an strong startup profile that is missing a couple of key elements that can be influenced, will you engage and attempt to address those factors w/ the founder?
I've looked over the consumer and enterprise sector lists where you invest... and it's a pretty broad list. Can you really have a data engine that works well for such a varied and broad landscape?
Essentially a sector by sector sensitivity and regression analyses?

To listen more, please visit http://fullratchet.net/podcast-episodes/
for all of our other episodes.

Also, follow us on twitter @TheFullRatchet for updates and more information.

Direct download: FR142_Farmer_p1.mp3
Category:general -- posted at: 7:36am EST