Frank Rotman | Building Capital One ($58B) and QED Investors ($4B AUM)

Aug 1, 2024

Frank Rotman, Co-Founder and CIO of QED Investors, shares his journey from launching Capital One to shaping the fintech landscape. He discusses the evolution of financial services over 30 years, emphasizing customer-centric innovations. Rotman also analyzes crucial valuation strategies for emerging managers and the importance of understanding local markets when investing. He highlights the successes of Nubank and offers insightful advice on navigating the complexities of fintech and compliance in today's digital economy.

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Intro

00:00 • 2min

Navigating Valuations in the Venture Landscape

01:59 • 2min

The Evolution of Capital One and Fintech Innovation

04:07 • 13min

Foundations of FinTech Investment

17:32 • 12min

The Evolution of Financial Services

29:47 • 12min

Navigating the Regulatory Landscape in Fintech Startups

41:51 • 5min

Navigating the Venture Capital Landscape

47:20 • 28min

Exploring Cryptocurrency: Insights and Innovations

01:14:59 • 19min

Navigating the Lending Landscape

01:33:51 • 5min

Navigating the 2021 Market Surge

01:38:55 • 7min

Understanding Investment Outcomes and Economic Sharing

01:46:18 • 3min

Get first-party targeting with Brave's private ad platform: cookieless and future proof ad formats for all your business needs. Performance meets privacy. Head to https://brave.com/ads/ and mention “Turpentine” when signing up for a 25% discount on your first campaign. Warp: Don’t let payroll and compliance hold your startup back: visit https://joinwarp.com/peel to get started and receive a $1,000 gift card when you first run payroll. Frank Rotman is the Co-Founder and CIO of QED Investors, and before that helped start Capital One. Frank and I go deep on their founding stories, as well as one of QEDs first big winners, Nubank. Frank also gives us a crash course on fintech, lending businesses, and crypto use cases; his hot takes on the venture asset class as a whole, with lots of advice for emerging managers; plus a case study on how high valuations too early on are bad for a startup. Timestamps: (00:00) Intro (04:22) Starting Capital One in 1988 (07:04) Spinning out as an IPO (10:42) Starting QED in 2008 before Fintech was a category (20:51) Raising their first outside fund (22:03) Investing early in Nubank (25:11) Fintech opportunities in India (27:45) De-risk investing in new markets (29:55) How financial services have changed over the past 30 years (31:33) Inside a new Capital One credit card in the 90’s (36:31) How most companies launched new cards in the 90’s (39:46) The most profitable types of credit card customers (42:00) Mistakes founders make building credit businesses (48:33) Frank’s “Three Body Framework” for VC (54:48) Losing strategies in VC (01:03:39) Unpacking why high valuations are bad for startups (01:16:20) Frank’s journey in and out of crypto (01:24:23) Actual use cases for stable coins and NFTs (01:34:09) Unpacking the lending supply chain (01:41:44) The difference between Fundamentalist and Revolutionary investors Referenced: VCs Three Body Framework: https://cdn.prod.website-files.com/605db59b78445cf5ae548e49/628b9d826f9af3217c9807a2_Three-Body%20Problem_%20Finding%20the%20New%20Stable%20Points%20in%20Venture%20Capital.pdf The House Money Effect: https://x.com/fintechjunkie/status/1466217991532650496 Fundamentalist vs Revolutionary Investors: https://www.linkedin.com/posts/frank-rotman_there-has-been-and-always-will-be-two-competing-activity-7128137991654445057-NuXf/ Where to find Frank: Twitter: https://twitter.com/fintechjunkie LinkedIn: https://www.linkedin.com/in/frank-rotman/ Where to find Turner: Twitter: https://twitter.com/TurnerNovak LinkedIn: https://www.linkedin.com/in/turnernovak/ Newsletter: https://www.thespl.it/