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Jonathan Hsu of Tribe Capital joins Nick to discuss how to Acquire Data, Build Abstractions and Do Research. In this episode, we cover: Walk us through your background and path to VC What’s the thesis at Tribe Capital? How do you define PMF? Could you explain what the 8 Ball diligence framework is? When is a deal too early -- how much data (or over what time continuum do you need data) in order for the model to assess appropriately? Just for evaluation or also sourcing? Can you apply this tool to a range of business types (ie. SaaS vs. Maretkplaces vs. User-Growth, etc.)? How to avoid false positives? Data looks great for early phase -- early market… How do you know that it isn’t luck and the company didn’t stumble onto something with early signals of PMF but they don’t have the insight or flexibility to evolve the business through growth and scale phases? What aspect of early stage investing don’t you use data for? Why is this not appropriate to measure with data? Loss ratio goes down -- do you think it increases potential outcome size? On the evaluating side of things, it seems like Tribe has a big emphasis on using data to understand early product market fit. What is your definition of product market fit? Does Tribe conduct portfolio support in a similar way? What happens when data and intuition clash? Do you always lean one way or another? Examples of either? How do you account for exogenous factors? Ever been a scenario w/ a company misrepresenting data (fake data)? How long did it take to build this out -- what is the current team structure of investors, developers, and data scientists? Where do you and the team at Tribe need to improve most? 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: Tom Tunguz Grace Isford Ben Casnocha Courtney Reum Each investor discusses a portfolio company that did not survive and why it was that they failed.
George Arison of Shift joins Nick to discuss Going Public via SPACs and PIPEs, The First Mover in Ridesharing That Lost to Uber, and Building the Online Marketplace for Used Cars, Shift. In this episode, we cover: Walk us through your background and path to tech. What was the outcome of taxi magic? Shut down? When you spoke with Bill Gurley - rumor has it he pushed back on the model.  Did you consider switching? What is Shift? How are you different than Carvana? How accurately can you price a car sight unseen? It feels like you are effectively CarMax online...  If CarMax is such a good value prop for seekers and buyers, why do you think they only have a 1% market share? There were lots of ways you could have expanded early on... your offerings... geography... and even product/business lines (like financing)... talk us through the early decisions that were made and how they were made The name is great but does Gen Z get it?  No one shifts anymore Online marketplace solving an extremely frustrating and time-consuming consumer life event but it's a very Infrequent transaction so you need to be top of mind when someone is buying a new car or ready to make a transaction... How are you thinking about that? Talk about your decision to go with a SPAC to go public. The decision to go direct-listing would be in cases where the company is more of a household name? SPACs were a four-letter word in the '90s... apparently, there were some bad situations... what is the risk here, and how has that been addressed by the modern SPAC structure? Do sponsors get 2% or 20% off the top? What was the value of the SPAC vs. the valuation of your company... were you (and other shareholders) diluted by the SPAC investment amount And the rest/the balance of capital comes from a PIPE, correct? As an investor, wouldn't the preference be to invest in the SPAC vs. the PIPE? Building a company in SV or not, and where that is headed? What advice would you have for founders before selecting VC partners? What was the experience as an openly gay man building a tech company -- do you think that presented a more difficult path to success?
On this special segment of The Full Ratchet, the following Investors are featured: Check Warner Ramy Adeeb Patrick Gallagher Shawn Carolan Each investor describes the most unusual situation or pitch that they've encountered as an investor.
Eric Collins of Impact X Capital joins Nick to discuss The Changing "Search Image" of Founders, Lack of Diversity = Missed Opportunity, and COVID Effects on the BLM Movement in Europe. In this episode, we cover: Walk us through your background and path to VC What's the thesis at Impact X? As a black CEO and fund manager, in what ways do you think your experience fundraising was different than your white, male peers at other firms? How do you approach sourcing? What's unique about the way you've built your network vs. other firms? Less than 1% of venture funding goes to black-led and we've heard the tired line that "not enough companies are founded by underrepresented founders and black founders"...  Are you concerned that you'll have fewer deals or less pipeline? What's the right number of deals per year where you feel like you're seeing a sufficient amount? I've heard about the "deep analysis" you do and how that creates the edge.  Can you describe what this entails? Do the issues run deeper in the LP community than even the GP community? Are the return expectations different for your LPs vs. a non-Impact fund? A lot of the impact you are creating is long-term in nature.  What are the leading indicators of success for your fund? How do you set objectives and measures to know if you're winning/exceeding the plan? In response to the pandemic, the gov't created a number of programs to help fast-growth companies.  What was the impact on your underrepresented pipeline and portfolio? Black Lives Matter has been the center of attention here in the states.  What's the status of the movement in the UK and how has it impacted your efforts at Impact X?
On this special segment of The Full Ratchet, the following Investors are featured: Richard Kerby Jaclyn Hester Lanham Napier Steve Blank Each investor illustrates a critical lesson learned about startup investing and how it's changed their approach.
Erik Torenberg of Village Global joins Nick to discuss Decentralization of VC, Why Your Fund Size is Your Strategy, and Why Startup Formation is the Most Important Contributor to Economic Growth. In this episode, we cover: Walk us through your background and path to VC What were the biggest lessons learned from Product Hunt that you took to investing? Recently had Ben Casnocha on... anything specific you'd like to add about the thesis behind Village Global? How do you think about working with experienced vs non-experienced angels? How do you think about portfolio construction for VG? Fast forward... some angels have strong early signals of success, others don't -- do you cull the herd or amplify those that are good pickers? Considering this, why do you think so many VCs have concentrated portfolios? How do you think about follow on investing? What is the role of a pre-seed firm? If there's a weakness in the Village model... what is it? Part of your model is to increase the amount of founders and investors.  What do you say to those that argue there's too much capital already? What’s does the future look like for Venture? What’s your advice for people getting into venture? Three data points Let’s say you’re approached to invest in an early seed stage SaaS startup... The founder is a technical serial entrepreneur with two solid 8-figure exits.  And she has a credible co-founder that is more business/commercially focused; An MVP of the product has been launched and was the top product of the day on Product Hunt, when it launched; and The Product launched two months ago and currently has $5k of MRR. 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?
On this special segment of The Full Ratchet, the following Investors are featured: Jonathan Hsu John Vrionis Trae Vassallo Kane Hsieh Each investor discusses sectors, drivers, and/or trends that may have a significant impact in the future and are potentially positioned for outsized-returns.
Farooq Abbasi of Preface Ventures joins Nick to discuss Funding the Misunderstood Technical Founder, Self Evaluation as a Solo Capitalist, and Capital to Underwrite R&D risk vs. S&M risk. In this episode, we cover: Walk us through your background and path to VC Why did you launch Preface? What's the thesis at Preface? How do you define enterprise/infrastructure frontier enterprise? What's most different about your approach? Are the businesses you fund created and ideated by the founders or is it a collaboration between you and the founders or do you take concepts and bring them to future founders? What's your approach to sourcing? Because your model is different and the founder profile is a bit different than most...  in what unique ways do you provide value post-investment? You're a solo-capitalist...  How do you evaluate yourself and keep some checks/balances on your decisions? Did you put together an LPAC -- if so how big is the group, how often do you meet and when/where do they help? Are you actively investing in open-source startups? What are your thoughts on the Bifurcation in the VC industry... capital underwriting of R&D risk vs. S&M risk? What are your thoughts on biases in founder selection, data-driven predictors of founder success? What's been the greatest challenge in your VC career and how have you overcome it? You’re passionate about Diversity, having founded Diversity.vc in 2016. How are you practicing a more inclusive style of venture capital? Three data points...  hypothetical investment scenario
On this special segment of The Full Ratchet, the following Investors are featured: Darren Bechtel Melody Koh Somesh Dash Jeff Fluhr Each investor highlights a situation where they decided not to invest, why they passed, and how it played out.
On this special segment of The Full Ratchet, the following Investors are featured: Minnie Ingersoll Jim Douglass M.G. Siegler James Currier Each investor discusses a portfolio company that did not survive and why it was that they failed.
Lo Toney of Plexo Capital joins Nick to discuss Common Traits Shared by Top GPs, Why Underrepresented Fund Managers Will Produce Superior Returns, and SPACs vs. Direct Listings vs. IPOs. In this episode, we cover: Walk us through your background and path to VC? Why are Product Management skills similar to the skills required for VC? What's the thesis at Plexo Capital? Do you think a thesis on investing in underrepresented founders will produce superior returns? What do you say to pundits that claim you've restricted your options and will have far fewer managers to choose from... which will adversely impact returns? On a percentage basis... will there be more outsided outcomes from diverse founders (or managers) vs. those that are not diverse? How are you innovating on the LP side? We talked about some of the challenges of raising funds... are there ways that you work with and help emerging managers raising a first-time fund? Not just about performance... especially early on.  What are the common success traits you see in GPs? What's your position on investing in the management company or even the GP itself? Where do you see the market for secondaries evolving? I'd like to talk about the exit market a bit... What are your thoughts on companies listing direct? How about the explosion of SPACs -- net positive or negative for venture? Any unintended consequences that founders (or investors) need to watch out for? Zoom is now worth more than Uber, Airbnb, and Stripe combined... Are the three companies undervalued or is Zoom overvalued... or is the pricing about right? Amazing to see companies like Paypal and Square have surpassed Goldman in market cap "3 Data Points"... You’re approached by a first-time fund manager.  The fund manager did not work for a large, brand-name venture firm before and she has never had an institutional investor.  She has been actively investing for 3+ years.  She plans to raise $20M to invest in 30 seed-stage companies w/ no reserves.  The catch is you can only ask 3 questions (for 3 additional data points) to make your decision. What 3 questions do you ask? 
On this special segment of The Full Ratchet, the following Investors are featured: Elizabeth Yin Michael Cardamone Gigi Levy-Weiss Niki Pezeshki Each investor describes the most unusual situation or pitch that they've encountered as an investor.
Lanham Napier of BuildGroup joins Nick to discuss Scaling Rackspace, The Evolving Responsibilities of a Venture-Backed CEO, and Confronting Big Tech Monopolies. In this episode, we cover: You took on capital from Seqouia, Norwest and others while at Rackspace.  What was the biggest challenge to taking on venture capital? How were you able to move from the early product-market-fit days to true scale... what were the defining decisions/actions that helped you expand exponentially? As a company leaves the product-market-fit stage and reaches scale, what is the job of the CEO or how does the job of the CEO change as the company scales? You've talked about investing "long-term capital"... what do you mean by that? How have you created a fee-light model, where management fees are eliminated? How do you guide CEOs that have been conditioned to think in 12-18 months cycles, when the long-game is much more critical? You've hired and developed a lot of folks over the years.  What advice do you have for young CEOs with regards to selection and/or development of people? Leadership -- great ones emerge in hard times.  What are some of the most important lessons you've learned about leadership? We're in an environment where the largest tech companies have monopolized a lot of the upside in the market.  Of course recently many of the CEOs appeared in front the house judiciary committee.  Where do you stand on the position of large tech companies and how that impacts emerging startups? Do you think China is a threat to the U.S.'s position as world power and tech leader? What would suggest we do about it?
On this special segment of The Full Ratchet, the following Investors are featured: Henrique Dubugras Ryan Gembala Grace Isford Scott Kupor Each investor illustrates a critical lesson learned about startup investing and how it's changed their approach.
Trae Vassallo of Defy Partners joins Nick to discuss Leaving Kleiner Perkins to Start Defy Partners, The State of Venture in the Bay Area, and Maintaining a Beginner's Mind. In this episode, we cover: Can you talk about your transition from Kleiner Perkins? How tough was that decision to make? What was it like to work with John Doerr? What’s the thesis at Defy Partners? When you began Defy you chose not to look at San Francisco. Can you talk about why that is? How do you think this plays out? What will tech and venture in the Bay Area look like a few years from now, when COVID is behind us? Any stats on flight of talent form Bay area to other cities/regions? What changes have you observed in venture/tech that this crisis has either caused or accelerated? You’ve been a founder and can relate w/ the folks you’re working with. How do you try and keep that beginner’s mindset as you gain more experience and get further away from your founder journey? What are some the biggest mistakes you see founders making when pitching investors? What tips can you give founders around building relationships as well as pitching in a completely virtual environment? You experienced a severe personal experience… near death situation a few years ago. How has that changed you as a person and as an investor? 3 data points… Let’s say you’re approached to invest in a consumer hardtech startup. The startup is doing $1.5M ARR It’s growing at 15% MoM And LTV:CAC is 4:1 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?
On this special segment of The Full Ratchet, the following Investors are featured: Jason Whitney Shawn Carolan David Horowitz Jaclyn Hester Each investor discusses sectors, drivers and/or trends that may have significant impact in the future and are potentially positioned for outsized-returns.
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?
On this special segment of The Full Ratchet, the following Investors are featured: Oren Klaff Tamara Steffens Leo Polovets Byron Deeter Each investor highlights a situation where they decided not to invest, why they passed, and how it played out.
Ben Casnocha of Village Global joins Nick to discuss Backing from Bezos, Zuckerberg, and Gates; Lessons from Reid Hoffman; and Building a Network-centric Venture Firm. In this episode, we cover: - How have things changed for the firm since the pandemic broke? - You've raised from some very big names in tech -- Zuckerberg, Hoffman, Gates, Bezos, Greene, Blakely and many more.  How exactly did the formation of Village and fundraise from these notable tech leaders come together? - Village has a unique approach to sourcing...  Tell us about the scout network? - Decision making process, architecture when doing deals at this pace and volume? - Many firms talk about their founder networks and Slack Groups.  But often if you ask founders, the density and connectivity of those networks are lacking.  What is it about your broad founder community that succeeds where others don't? - Worked with Reid Hoffman for two years... what were some of the key lessons from that experience w/ Reid? - YC is in full swing right now... many investors I've chatted with this week are a bit dizzy with the number of companies they're meeting with.  Do you invest in companies coming out of YC? - What do you think the future holds for accelerators like YC? - How do you determine when to make an exception on a deal?  We all have rules, check-size, valuation range, etc... how  do you know when to go off-thesis? - What are your thoughts on the future of Valley-based investing vs. investing outside the Valley? - Thoughts on all these large, multi-stage firms investing at seed and pre-seed? - Capital Supply and concentration is at new levels in the Bay Area... especially for seed investors.  While it's reasonable that more great companies will be built with the tools and opportunities available, this all won't end well.  I've seen pricing spike and aggressive tactics changing from investors to get access to deal.  What are you observing and how do you think it plays out?
On this special segment of The Full Ratchet, the following Investors are featured: -Beezer Clarkson -Alex Osterwalder -Patrick Gallagher -Steve Blank Each investor discusses a portfolio company that did not survive and why it was that they failed.
- You recently published research on the expansion of 175 US companies into Europe. I’d like to discuss a number of points from the piece, but first off… what prompted you to do this research and write the piece? - Part of the report is about timing… ie. when is the right time is for a b2b SaaS company to make the leap and expand into Europe.  Talk us through your findings and conclusion w/ regard to timing. - In preparation to make that jump, you recently talked about the challenges for “globalizing” a company and that it really starts at the CEO’s desk… what do you mean by that? - As an investor, how do you prepare a CEO to shift mindset from US-centric to a more global one? - When a company makes the leap to Europe, what are some of the most common pitfalls/mistakes they make? - How do the challenges of growing a b2b software company across Europe differ from that of growing it in the United States? - Is there a particular playbook that you follow when bridging the gap between the US and European markets, if so can you share the broad strokes of what that entails? - Do you think it’s more difficult for companies to start in the United States and grow into Europe or start in Europe and grow into the States? Why? - As part of the report, you talk about the difference between sales led expansion versus product and engineering led expansion, what are the primary differences? - How has COVID affected which expansion strategy to choose, if at all? - How to build a fully functioning sales force remote from the ground up - What, if any, tailwinds have emerged for the growth of the European tech ecosystem?
On this special segment of The Full Ratchet, the following Investors are featured: Leah Solivan Kane Hsieh Richard Kerby James Currier 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.
On this special segment of The Full Ratchet, the following Investors are featured: Courtney Reum Mark Suster Sarah Tavel Jason Calacanis 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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Podcast Details

Created by
Nick Moran
Podcast Status
Active
Started
May 29th, 2014
Latest Episode
Oct 29th, 2020
Release Period
Weekly
Episodes
420
Avg. Episode Length
29 minutes
Explicit
No
Order
Episodic

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