The Full Ratchet (TFR): Venture Capital and Startup Investing Demystified 256. A Proprietary Tool to Source Startups, The Commoditization of Capital, and the New Exit Environment (Villi Iltchev)
Nov 9, 2020
45:19
Villi Iltchev of Two Sigma Ventures joins Nick to discuss Using "George" a Proprietary Tool to Source Startups, The Commoditization of Capital, and the New Exit Environment. In this episode, we cover:
- Walk us through your background and path to VC
- What’s the thesis at Two Sigma?
- Tell us about George.
- What's George's biggest blind spot?
- What is your decision framework on investments?
- What characteristics do you look for in markets when identifying new sectors/spaces of interest?
- How long after investing in/working with a company do you tend to know whether it's going to work or not?
- Do you attempt to handicap execution risk vs. technical risk vs. commercial risk?
- Capital is a commodity and, largely speaking, there doesn't appear to be a lot of differentiation in venture. How do you combat the commoditization of venture?
- Aside from bankers... who do you think stands to lose the most from the increase in SPACs and direct listings?
- Any other downsides, unintended consequences, or problematic issues that could arise from the increase in SPACs?
- A decade from now, will the U.S. be the best country to start a tech company? If it shifts, what are the prime candidate countries to replace the U.S.?
- International investment strategy for Two Sigma?
- Three data points... hypothetical investment scenario
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- Let’s say you’re approached to invest in an enterprise SaaS startup.
- Founder has a great background.
- MRR is $200k, growing 20% MoM. LTV:CAC is 5:1. Quick Ratio greater than 4.
- 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?