The Full Ratchet: Venture Capital Demystified

Paul Martino of Bullpen Capital joins Nick to discuss Doubling Down on Data to Discover Overlooked Founders, Teaching and Coaching CEOs, & Bullpen's Approach to Measuring Fund Success. In this episode, we cover:

  • Can you first refresh us on the thesis at Bullpen and then maybe give us an update on the firm over the past three years?
  • How do you define post-seed today... and is it moving as other stages have?
  • Are you still one of the few specialized at post-seed or have you seen increasing competition?
  • Is there still a strong emphasis on metrics and using the data as an early filter of deals?
  • How are you using data to source?
  • What do you look for in founders?
  • Why are you committed to coaching/supporting companies?
  • We all know the scorecard of success in VC... DPI, TVPI, IRR, PME, etc... what are the leading indicators of success that you measure and manage to make sure you're driving success in those metrics.
  • You are a founder yourself, what advice would you give to founders right now that are building during the Coronavirus Recession
    • Wrote article: "The 2008 Recession Saved Our Company. The Coronavirus Recession Might Save Yours, Too"
  • Let's say you have a chance to speak w/ a younger Paul, circa 2010... what advice to give?
  • What does the underdog founder look like? or What do you look for in founders?
  • What's broken in the venture ecosystem?
  • This question is called three data points. I'm going to give you a hypothetical situation w/ a startup and you can ask three questions for three specific data points.
    • Let's say you're approached to invest in a post-seed stage SaaS startup...
    • The founder does not come from big tech.
    • Her HQ is in St. Louis
    • The sector is retail.
    • They launched 12 months ago.
    • and they currently have $80k MRR.
    • Again, the catch is, you can only ask 3 questions for 3 specific data points, in order to make your decision. What three questions do you ask?
Direct download: 275.mp3
Category:general -- posted at: 6:00am EDT

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

  • Niko Bonatsos
  • Niki Pezeshki
  • Farooq Abbasi
  • Jaclyn Hester


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

Direct download: IS_185.mp3
Category:general -- posted at: 7:45am EDT

Alfred Chuang of Race Capital joins Nick to discuss The Next Generation of Tech & Venture Capital from the Perspective of a Unicorn Founder Turned GP. In this episode, we cover:

  • Walk us through your background and path to VC
  • What’s the thesis at Race Capital?
  • Why did you name your fund Race Capital?
  • I want to talk a bit about open source... there seem to be wildly differing takes on this but what is your opinion of for profit tech companies building products on open source architecture and, in some cases, just reskinning open source tech w/ a UI and selling for profit?
  • As we evolve to an increasingly cloud-first technology environment, what does it mean as we transition from a hybrid (onprem, cloud) approach to cloud only?
  • How does edge computing reconcile with this future cloud-only environment?
  • On the data side... Do you think we move to a Unified Data Infrastructure Architecture in the future?
  • Transition a bit to talk more about your journey...
  • I want to talk a bit about BEA Systems... sounds like an amazing journey and a great outcome. What is your biggest regret looking back (if any)?
  • Ultimately, why do you think entrepreneurs choose you over other firms?
  • What's your opinion on valuation and, as things have gotten more competitive, firms bidding price up and founders really optimizing for valuation at the early stages?
  • Is Silicon Valley’s exodus real?
  • Will these SPAC deals blow up?
Direct download: Alfred_Chuang_Final.mp3
Category:general -- posted at: 5:35pm EDT

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

  • Erik Torenberg
  • Maren Bannon
  • Shawn Carolan
  • Lanham Napier

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

Direct download: IS184.mp3
Category:general -- posted at: 6:00am EDT

Monique Woodard of Cake Ventures joins Nick to discuss The "Three Layer Cake" Fund, How Personal Experience Drives Your Investment Lens, The Future of Tech for the Aging Population, & How a Solo GP Can Do it All. In this episode, we cover:

  • Walk us through your background and path to VC
  • What’s the thesis at Cake Ventures?
  • You have a strong focus on looking for startups that are addressing the needs of a world undergoing massive demographic changes. Talk to us a bit about how you approach investing in demographic change?
  • What sort of demographic changes do you believe will have opportunities?
  • Were you surprised to see Baby Boomers dominating online shopping?
  • What is it like being a solo GP? What are the pros and cons?
  • How do you replicate and try to scale yourself?
  • Context switching is often cited as the hardest thing about what we do.  Talk us through your schedule and how you manage context switching?
  • This question is called three data points.  I'm going to give you a hypothetical situation w/ a startup and you can ask three questions for three specific data points.
    • Let's say you are approached to invest in a consumer social business with 100k MAUs, and 20% MoM growth for the last 3 months. The catch is you can only ask for 3 data points to make your decision.
    • What 3 questions do you ask?
Direct download: monique_woodard_final.mp3
Category:general -- posted at: 6:00am EDT

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

  • Lo Toney
  • Stephen McIntyre
  • Eric Collins
  • Trae Vassallo

Each investor describes the most unusual situation or pitch that they've encountered as an investor.

Direct download: IS_183_v2.mp3
Category:general -- posted at: 6:00am EDT

David Goldberg of Alpaca VC joins Nick to discuss Staying Competitive in the Seed Fund Boom, Success Metrics at the Fund Level, and the Shifting Equilibrium of Investors and Founders. In this episode, we cover:

  • Walk us through your background and path to VC
  • Tell us about your shift from law to finance and to becoming a founder of FreshNeck?
  • What’s the thesis at  Alpaca VC?
  • Talk to us about your Field Studies and why you do them.
  • How do you develop a thesis on consumer behavior, trends, and how they will evolve in the coming years?
  • Similar to us you do a lot of OKR and KPI measurement and tracking as a firm... what are some of the most important metrics you track that should ultimately lead to the right progress?
  • What about w/ the portfolio companies?
  • Do you have systems and processes on the front-end, pre-investment
  • You are a remote team of fund managers in NY, CO, and FL... what are the advantages and drawbacks for startups with w/ remote teams?
  • Do you think the center of gravity is shifting away from the Valley?
  • You recently invested $2.5M of your personal capital into 6 Black and Latin fund managers - what drove this decision?
  • What are your thoughts on Carta X and new liquidity for late-stage equity?
Direct download: David_Goldberg_FInal.mp3
Category:general -- posted at: 6:00am EDT

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

  • Janet Bannister
  • Simeon Iheagwham
  • Somesh Dash
  • Jonathan Hsu

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

Direct download: 182.mp3
Category:general -- posted at: 6:00am EDT

Marcelino Pantoja of Tribe Capital joins Nick to discuss LP Turned VC, Mistakes When Pitching to Allocators, and Managing Limited Partner Relationships. In this episode, we cover:

  • Walk us through your background and path to VC
  • Refresh on the thesis at Tribe?
  • Talk to us about the mindset of the allocator — what are their key objectives and what do they care about?
  • What are the biggest mistakes you see emerging managers making when pitching LPs?
  • Let's say an aspiring VC has a few years until they will raise from institutions... what should they be focusing on in order to create a really compelling offering in the medium term?
  • Let's say an emerging GP is raising from institutions imminently... what advice would you have for them?
  • Do you think it's significantly easier for an institution to make an investment in some coming from a large successful Tier 1 fund, spinoff, vs. a successful operator or angel?
  • What are the key challenge areas that the LP is really going to scrutinize on the spin-off and what are the areas under scrutiny for the operator?
  • Sometimes it's hard to get information on LPs from a distance... do you have any advice for fund managers that are trying to pre-qualify?
  • What is the difference between a good LP and one that may be a problem... how does a GP determine that early enough to avoid bringing on the wrong types of LPs?
  • In what ways is your job similar and different moving from LP to VC?
  • How do you compete against other firms for deals?  I understand the value-add but the value has become competitive with a larger number of firms... how can you continue to win and do so at a price that makes sense for the return potential?
Direct download: Pantoja_Final_v2.mp3
Category:general -- posted at: 6:00am EDT

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