The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch

20VC: Has Price Discipline Disappeared? Is it Possible to Build Ownership Over Time? Why Venture Is Less Collaborative Now Than Ever? How fast Do Breakout Companies Become Obvious? How To Construct an Optimised and Repeatable Investment Decision-Making Pr

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Aug 26, 2021

Frank Rotman, co-founder of QED Investors, dives into the evolving landscape of venture capital and fintech. He discusses how price discipline seems to be fading and the implications of rapid deployment timelines. Frank shares insights on the importance of initial ownership positions and how to build them effectively over time. He examines the dynamics between investors and founders, the necessity of empathy, and the rising trends in pre-emptive funding rounds. With a focus on collaboration, he sheds light on the future potential of fintech innovation.

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ANECDOTE

Capital One to QED

Frank Rotman's career began at Capital One, working with Nigel Morris for 28 years.
After Capital One, he founded a student lending company before co-founding QED Investors.

INSIGHT

Poker vs. Venture Capital

Poker teaches process-focused decision-making, crucial for venture capital.
Venture capital has longer feedback loops than poker, demanding greater upfront conviction.

ANECDOTE

Risky Success at Capital One

At Capital One, Frank Rotman's successes involved taking risks, sometimes nearly leading to his termination.
He prioritized creative problem-solving and getting to "yes," even if it meant bending the rules.

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Frank Rotman is a founding partner of QED Investors, one of the leading fintech-focused venture firms investing today with a portfolio including the likes of Klarna, Kavak, Quinto Andar, Credit Karma and more. As for Frank, prior to QED, Frank was one of the earliest analysts hired into Capital One and spent almost 13 years there helping build many of the company’s business units and operational areas. Post Capital One, Frank went on to found a student lending company before joining up again with Nigel Morris to co-found QED.

In Today’s Episode with Frank Rotman You Will Learn:

1.) How Frank made his way into the world of venture having spent 13 years scaling Capital One? What was the founding moment for Nigel and Frank with QED? How does Nigel compare to poker to venture capital? Where are they similar? Where are they different?

2.) Does Frank feel that price discipline has disappeared in the venture market today? What have been some of Frank's biggest lessons on price? Is Frank concerned by the compression in deployment timelines for funds? How does Frank feel on the rise of pre-emptive rounds? In what way does Frank advise his founders when they are offered pre-emptive rounds?

3.) How important does Frank believe sizing your initial position is, from an ownership perspective? Is it possible to build ownership in your winners? What have been some lessons for Frank with regards to the speed of which breakout companies are clear? How does Frank assess and analyse bridge rounds and whether to participate or not?

4.) Why does Frank believe that the VC world is less collaborative than ever today? What has caused this? What can VCs do to change this? How do we solve the structural problem of VCs needing ownership for their business and founders not wanting excessive dilution? What does Frank believe is the most dangerous trend in the VC market today?

5.) How does Frank think about what he can do to improve his investment decision-making process? What repeatable process has Frank landed on that works? Where do many make mistakes here? How does Frank view the relationship between process and outcome?

Item’s Mentioned In Today’s Episode with Frank Rotman

Frank’s Favourite Book: Tom Robbins

Frank’s Most Recent Investment: Hello Alice