Best of Panic: Frank Rotman of QED Investors - Fintech Operator Turned Fintech Investor (EP.218)

I’m still off from the podcast circuit climbing mountains on my bike, but will be back in the studio soon. The reruns of some of my favorite podcasts continue for now. This one from December of ‘21 with Frank Rotman of QED Investors is one you’ll want to listen to a few times for sure. It’s great historical perspective for where we’re at now, and evergreen enough to inform any evolving investment strategy. 

Best of Panic: My guest today is a fintech operator turned investor. Frank is the real deal. He spent almost 13 years at Capital One, is the co-founder of QED Investors, and made the Midas List of Top 100 Investors FOUR times. Everybody is a fanboy of somebody, and I’m a fanboy of Frank for sure – he has the amazing ability to spot leaders in the fintech space and has done it for a long period of time. In our business you get rewarded with a lot of money to manage and QED has just raised a fresh billion dollars. I learned a lot from this conversation and think every investor can do the same. 

Guest - Frank Rotman, Co-Founder, Partner and Head of Domestic Investments at QED Investors 

howardlindzon.com, qedinvestors.com 

Twitter: @howardlindzon, @fintechjunkie, @QEDInvestors, @PanicwFriends, @knutjensen 

linkedin.com/in/frank-rotman 

#fintech #invest #investment #venturecapital #stockmarket #finance 

Show Notes:

• Introduction (00:56)
• Welcome Frank (4:14)
• Founding QED (04:49)
• Fintech before Fintech (05:48)
• Wrapping up (57:45)
• Operators as investors (06:34)
• Pitching Nigel (06:51)
• Pitching Dan Loeb (07:30)
• M&A with Capital One (09:01)
• Grow it or sell it? (10:12)
• An information-based strategy (10:20)
• Flash forward to 2021 (12:04)
• Separating bubbles from megatrends (12:46)
• Too soon Unicorns (14:59)
• Art of business building thrown out the window (15:25)
• Web3 is just getting started (17:05)
• Loose money fueling the system (18:08)
• Web3 attracting talent (20:49)
• Investing decisions and allocation (21:15)
• Doing diligence in today’s market (22:06)
• Talented venture teams (25:50)
• QED check size range (27:34)
• Ex-operators being ‘hands on’ (28:37)
• When IPOs peak (32:57)
• Private v. Public investors (33:15)
• Sequoia’s letters (37:02)
• First principles of investing (37:18)
• How much to pay for an earning stream? (38:00)
• 35 year payback (38:48)
• Valuation disconnects (39:26)
• Fast growing companies (41:21)
• Negative rates and the 60/40 portfolio (42:03)
• Inflation is a real force (43:12)
• Impact of rates on valuation (44:31)
• Biggest position in crypto (48:11)
• Being ‘crypto aware’ (49:34)
• Wrapping up (50:06)
• Closing thoughts (55:37)