The Full Ratchet: Venture Capital Demystified

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

  • Ramy Adeeb
  • Somesh Dash
  • Jeremy Neilson
  • Minnie Ingersoll

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: 151_Investor_Stories_151__Whats_Next_Adeeb_Dash_Neilson_Ingersoll.mp3
Category:general -- posted at: 9:00am EDT

Niki Pezeshki of Felicis Ventures joins Nick to discuss Finding Markets with Long-Term Tailwinds; Macro Impacts on Venture; and Robust vs. Fragile Data. In this episode, we cover:

  • Background and path to venture.
  • Thesis at Felicis and your focus there?
  • How has the pandemic affected your approach to investment?
  • You’ve mentioned that you look for market tailwinds, especially tailwinds that will be lasting. Right now, we’re seeing a number of shifts that will have lasting effects -- which are you watching most closely?
  • Why do you think the public markets have, largely, stayed high during a very large health and economic crisis?
  • Can you give us an overview on your three-part investing framework for making investment decisions?
  • Where do you look for these large shifts, creating opportunity -- aside from Mary Meeker's report?
  • How do you make sure you are current on-trend instead of getting anchored on data that's old or fragile?
  • What are you looking for in the business model that indicates to you that it is not only the correct approach but can lead to transformational changes in the industry?
  • In which types of businesses do you like to see product-focused founders versus marketing-focused founders, is there a heuristic or systematic way that you think about this?
  • You mentioned that business is a formula and that it’s clear early on whether it’s going to work or not -- can you give us an example of the formula?
  • What's your approach to coaching and advising founders? 
  • There's this fine line between being overbearing w/ advice and not providing enough insight in an area that could derail a company.  How do you strike the balance?
  • What keeps you up at night... the ones you invested in that you shouldn't have or the ones you didn't invest in that you wished you had?
  • 3 Data points: Let's say that you have a consumer SaaS company that is doing 300K in ARR, growing 20%  MoM and that’s all you currently know about the company.
    • Which 3 data points do you ask for and why?

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.


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

  • M.G. Siegler
  • Grace Isford
  • John Vrionis
  • Ash Rust

Each investor highlights a situation where they decided not to invest, why they passed, and how it played out.

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: 150_Investor_Stories_150__Why_I_Passed_Siegler_Isford_Vrionis_Rust.mp3
Category:general -- posted at: 9:00am EDT

Henrique Dubugras of Brex joins Nick to discuss the Blazing Fast Path to $B+; Binary Outcomes; The Fintech Revolution; and A New Approach to Employee Comp. In this episode, we cover:

  • Background -- path that led to Brex?
  • Origin story for Brex Tag-line / One sentence overview
  • What's so different about Brex?
  • Why is more than just a credit card?
  • How has the pandemic affected the business thus far?
  • What do you offer that no one else does?
  • Who do you consider to be competition?
  • What is the moat here - why can't another well funded startup replicate your offering?
  • A criticism I've heard is that, when businesses need credit most, when bank balance/working capital is low, is when Brex cuts off access to credit. What's your response?
  • How would you describe your leadership philosophy?
  • Are you recruiting/hiring? Is the approach different while 100% remote?
  • What's the compensation structure at Brex?
  • One of the fastest companies to multi-billion+ valuation -- more pressure w/ all that capital?
  • With the raise and expectations some suggest that the outcome is binary -- is it?
  • What advice do you have for early-stage, pre-A, founders trying to build a venture scale business?

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.


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

  • Ryan Gembala
  • Scott Dorsey
  • Elizabeth Yin
  • Jeff Fluhr

Each investor discusses a portfolio company that did not survive and why it was that they failed.

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: 149_Investor_Stories_149__Post_Mortems_Gembala_Dorsey_Yin_Fluhr.mp3
Category:general -- posted at: 9:00am EDT

Gigi Levy-Weiss of NFX joins Nick on a special Crisis Coverage installment to discuss What's Next in Gaming; The True Essence of Product-Market-Fit; & Investing with an Emphasis on Retention and Engagement. In this episode, we cover:

  • Background and path to venture.
  • The thesis and your focus at NFX?
  • Did you invest in Houseparty when it was Meerkat?
  • You've written about your thoughts on PMF...  How do you assess whether a company has real product market fit?
  • What advice would you have for those still trying to find it?
  • With this focus on product and retention...  What's your response to investors that say distribution is more important than product?
  • Why do you think VC interest has been declining in the gaming space?
  • What has been the history/evolution in the gaming sector?
  • What's next for gaming -- Is there a step beyond the platform?
  • Are there any niches or segments within gaming or esports where you see the most potential?
  • 3 Data points:
    • Let's say a gaming startup comes to you... they have 50k DAUs, K value of 1, 20 % MoM growth... 
    • What 3 data points do you ask for and why?

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.


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

  • Scott Kupor
  • Melody Koh
  • Tom Tunguz
  • Jim Douglass

Each investor describes the most unusual situation or pitch that they've encountered as an 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: 148_Investor_Stories_148__Strange__Unusual_Kupor_Koh_Tunguz_Douglass.mp3
Category:general -- posted at: 12:00pm EDT

Jaclyn Hester of Foundry Group joins Nick on a special Crisis Coverage installment to discuss GP and LP Alignment, Challenges for Emerging Fund Managers, and How the Explosion in Seed Fund Volume Plays Out. In this episode, we cover:

  • Tell us about your background and path to VC.
  • For those who don't know, talk about the approach at Foundry with both the LP and GP model.
  • Foundry traditionally had no apprenticeship model and no junior investors... were you the first?
  • Pandemic... Are you making investments currently and what are you hearing from other LPs?
  • What's your advice for GPs re. building relationships and momentum w/ LPs during these uncertain times?
  • What's the biggest mistake emerging managers make when fundraising?
  • What do new fund managers underestimate when starting a venture firm?
  • Does it matter how specific a thesis is? Do you need to see a unique, focused and compelling edge or are you just as receptive to a generalist w/ a strong network and track record?
  • What question tends to trip up GPs?
  • What are some of the most important things GPs should ask LPs when raising?
  • What do you think are the most important things GPs and LPs need to be aligned on for a successful relationship?
  • How does the explosion in volume of seed funds affect you approach to selection?
  • How do you think this plays out -- most funds fail? Returns more evenly distributed? Power law no longer applies (or is less pronounced)?
  • Fast forward 5 years and let's assume there's been a fundamental shift in early stage Venture. What do you think is the most likely, largest change that's occurred?
  • What advice do you have for young people that aspire to be a VC someday?
  • Not going to ask for favorite GPs but, I will ask, if you could break quarantine to grab a cocktail w/ one GP -- who do you choose? ; )
  • 3 Data Points...
    • You’re approached by an emerging VC firm raising fund II. The fund manager did not work for a large, brand-name venture firm before and she has never had an institutional investor. Net TVPI is 1.4, and Net IRR is 35% and it's a 2018 vintage.
    • The catch is you can only ask 3 questions (for 3 additional data points) to make your decision.
    • What 3 questions do you ask?

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.


Nick Rishwain and Hannah Konitshek of The LegalTechLive Podcast interview Nick to discuss Advice for Founders -- Reaching out to VCs, Pitching over Zoom, and Closing Capital Amidst a Pandemic. In this episode we cover:

  • How have valuations been impacted from the pandemic?
  • How long will lower valuations persist?
  • Are VCs actively doing deals right now?
  • What's the most common mistake that founders make when approaching you for funding?
  • How much information would you prefer a founder share with you upfront (deck, financials, incorporation, docs, etc.)?
  • How often have you met a founder early, been added to their monthly update list and then come back to make an investment?
  • Should founders become more clinical when selecting investors?
  • How do you convince founders on New Stack as an investor?
  • There is one area that New Stack is really hands-on -- what is it?
  • What are some things a founder can do to get funded while  he's only got a well thought out idea and business plan?
  • Many founders don't know if their business is venture scale.  How do you determine if a business is venture-backable or not?
  • How does a sector that hasn't had huge exits at large multiples (like LegalTech) impact the way you assess startups in that sector?
  • How do you evaluate high recurring revenue vs. low recurring revenue?
  • Do you have any suggestions for a founder that is pitching now that it is completely remote?
  • Overall advice you're giving your portfolio companies right now?

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.


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

  • Alex Osterwalder
  • Beezer Clarkson
  • Michael Cardamone
  • Leo Polovets

Each investor illustrates a critical lesson learned about startup investing and how it's changed their approach.

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.


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