The Full Ratchet (TFR): Venture Capital and Startup Investing Demystified

Rob Go of NextView Ventures joins Nick to discuss Reflections From 10 Years at NextView, Dogma vs Discipline, the Importance of Effective Post Money, and Market Sizing Pitfalls. In this episode we cover: Is VC fundamentally changing under our feet? What are other biggest industry shifts that have changed the way you operate at Next View? Most LPs are focused on their fund managers' ownership percentage at entry. Explain what effective post-money at exit is and why that has become a north star from next view? Takeaway #3: There is a Goldilocks zone between too much dogma and lack of discipline. Can you give us an example or two of strategies that were difficult to let go of or move on from? Your favorite saying internally is “anything worth doing is worth doing fast”. Yet this is a pretty long cycle business and it takes time for a portfolio to mature and drive returns. What were the key learnings with regards to returns and metrics? How do you know if you're winning if the metrics are a bit of a red herring?  Are there any alternative metrics or signals you look for to quantitatively gauge performance? You cited the biggest observable misses for most VC's and it's related to market size -- what's been your observation here and where are investors missing? You suggest that founders and investors should make each other a bit uncomfortable. Why? Does this ever prevent you from winning deals? What's your opinion on competition after a decade of investing? How do you think about the competitive set of investors and how to maintain and edge in sourcing and winning the best deals? Do you have any advice for founders w/regards to fundraising? Missed a recent episode? Go to The Full Ratchet blog and catch up! Also, follow us on LinkedIn and Twitter.

On this special segment of The Full Ratchet, the following Investors are featured: Dharmesh Thakker Billy Libby Emily Paxhia Ed Sim Each investor discusses a portfolio company that did not survive and why it was that they failed. Did you miss our guests full length episodes? For other great episodes, go to The Full Ratchet blog and catch up! Also, follow us on LinkedIn (https://www.linkedin.com/company/27155166/) and Twitter (https://twitter.com/TFR_Pod).

Jonathan Ebinger of Transform Capital joins Nick to discuss Donating Half Your Carry, Why Open Banking is the Future, and Recruiting Outside the Bay Area. In this episode we cover: Walk us through your background and path to VC Tell us about your experience at Blue Run and why you decided to launch Transform. What is the thesis at Transform? Portfolio construction / stage / check size How did you come up with the model to donate 50% of your carry? What causes are you allocating carry to? What was the biggest challenge in the transition from early stage to late stage venture investing?  So you led the Series A in Jackpocket at BlueRun and the later stage Transform. How do you avoid conflicts of interest across both firms? I know you are an active fintech investor -- w/ regards to crypto... what areas are most compelling right now from an investment standpoint? We're in a hot market at the moment -- seeing lots of fund creation, lots of startup formation, and valuations are inflating  to 2-3x what they were a few years ago.  Is the market overheated and are too many startups getting funded? Is the bay area being threatened in its supremacy? The Economist last week talked about the slowing pace of innovation and rise of mega-companies. What's your take on their position that innovation has slowed -- and what does that mean for venture? Missed a recent episode? Go to The Full Ratchet blog and catch up! Also, follow us on LinkedIn and Twitter. The host of The Full Ratchet is Nick Moran, General Partner of New Stack Ventures, a venture capital firm committed to investing in outsiders. To learn more about New Stack Ventures by visiting our Website and LinkedIn and be sure to follow us on Twitter. Are you a founder looking for your next investor? Visit our free tool VC Rank and tell us about your business. We’ll send a list of possible investors right to your email’s Inbox!

On this special segment of The Full Ratchet, the following Investors are featured: Mike Smerklo Amy Nauiokas Tsune Shirota Vanessa Larco Each investor illustrates a critical lesson learned about startup investing and how it's changed their approach. Did you miss our guests full length episodes? For other great episodes, go to The Full Ratchet blog and catch up! Also, follow us on LinkedIn (https://www.linkedin.com/company/27155166/) and Twitter (https://twitter.com/TFR_Pod). The host of The Full Ratchet is Nick Moran (https://www.linkedin.com/in/nick-moran-a738503/), General Partner of New Stack Ventures, a venture capital firm committed to investing in the exceptions. To learn more about New Stack Ventures by visiting our Website (https://www.newstack.vc/) and LinkedIn (https://www.linkedin.com/company/11396054/) and be sure to follow us on Twitter (https://twitter.com/NewStackVC). Are you a founder looking for your next investor? Visit our free tool VC-Rank (http://vc-rank.com/) and tell us about your business. We’ll send a list of possible investors right to your email’s Inbox!

Eric Sippel of Sippel Farb Family Office joins Nick to discuss Raising from Family Offices, How to Differentiate as an Emerging Fund, and Common Mistakes Made by Established Firms. In this episode we cover: Walk us through your background and path to running Sippel Farb. Before we jump in can you give us some thoughts on Family Offices investing in Venture and how that has changed over the 25 years that you've been doing this? What are the major investment focus areas for the family office? With regards to manager selection... What gets you excited when you review the profile of an emerging fund? Tell us about the 3 S's that you look for. Rounds are moving faster then ever and prices seem to be escalating to 2-3x of what they were just 3 years ago.  Many GPs cite their speed of decision-making as a strength -- What is your opinion of quick investment decisions and short DD timelines? At New Stack, we focus on ownership.  However, some managers prefer a less concentrated approach with more shots on goal.  What are your key learnings regarding portfolio construction over the past few decades and what do you look for in emerging funds? Many LPs look for differentiated strategies for sourcing and winning deals... and put heavy weight on those factors.  Where do you stand? When a GP is pitching any family office, not just yours, what should they be mindful of that may be different than when they're pitching an institution? Family Offices are often a bit opaque... it's hard to find them and know what their investment interests are.  Do you have advice or suggestions of ways that fund managers can find and connect with families that may be a fit?  Have you seen any strategies from GPs that have connected with you in creative and friendly ways? What mistakes do you see "emerged/established" managers making the most? What about emerging managers? There's a great piece on Substack by Nikhil Trivedi that discusses the rise of the Solo GP. What are your thoughts on the rise of angels to super angels to sole capitalists? Do you perceive this as a threat to traditional VC firms?  Last year, Different Funds published a report on the rise of capital going to vehicles outside of flagship/committed funds--i.e. SPV's, Syndicates, Rolling Funds, and Opportunity funds. How does an LP navigate all these vehicles? You've worked with a lot of GP's.  What sort of bad behavior have you observed that you attempt to screen for now? Are there signals post-investment, after a certain period of time, that indicate to you that a GP or fund is working well. What's your opinion on using follow-on capital to bridge a company to Series A? What advice, that we didn't cover, would you have for GPs out there that are raising a Fund I or Fund II?

Each investor discusses sectors, drivers and/or trends that may have significant impact in the future and are potentially positioned for outsized-returns. Did you miss our guests full length episodes? For other great episodes, go to The Full Ratchet blog and catch up! Also, follow us on LinkedIn (https://www.linkedin.com/company/27155166/) and Twitter (https://twitter.com/TFR_Pod). The host of The Full Ratchet is Nick Moran (https://www.linkedin.com/in/nick-moran-a738503/), General Partner of New Stack Ventures, a venture capital firm committed to investing in the exceptions. To learn more about New Stack Ventures by visiting our Website (https://www.newstack.vc/) and LinkedIn (https://www.linkedin.com/company/11396054/) and be sure to follow us on Twitter (https://twitter.com/NewStackVC). Are you a founder looking for your next investor? Visit our free tool VC-Rank (http://vc-rank.com/) and tell us about your business. We’ll send a list of possible investors right to your email’s InBox!

Victor Pascucci of Energy Capital Ventures joins Nick to discuss The Trillion $ Opportunity in Natural Gas, Building A Strategic LP-Base, and Creating a Strong LPAC. In this episode we cover: Give us an overview of the data and the opportunity within the natural gas sector for tech disruption.  What percentage of our energy consumption is natural gas based? Why focus on natural gas? Why is now the right time for a natural gas focused venture fund? Let's talk for a moment about the digital transformation of the natural gas industry. Where can we expect to see the most change going forward? Exploration, development, or production?  Any concerns about the volume and quality of dealflow in this specialized sector? What kind of founder do you look for to change this legacy industry? How may these founders differ from the Silicon Valley stereotype?  5 large publicly-traded LPs -- Talk a bit about how you plan to work with the LPs as you make investments, manage the portfolio? How do you avoid the tail wagging the dog? How do you handle a situation where the tech you are investing in is highly disruptive and margin eroding to LPs in the fund? Many talk about the importance of carbon neutrality, yet it's a very opaque and difficult thing to measure.  One company's carbon footprint extends beyond just what happens within but all the partners, suppliers, distributors and, at times, customers that they interact with.  How can we appropriately assess carbon impact in the pursuit of carbon neutrality? Tell us a bit about learnings and best practices in building an advisory board.  I'd suspect that, much like a startup, there is a point where a well-constructed board can really amplify efforts, and a bloated or not well functioning board can kill momentum and progress.  How have you structured a board for long term success? Missed a recent episode? Go to The Full Ratchet blog and catch up! Also, follow us on LinkedIn and Twitter. The host of The Full Ratchet is Nick Moran, General Partner of New Stack Ventures, a venture capital firm committed to investing in the exceptions. To learn more about New Stack Ventures by visiting our Website and LinkedIn and be sure to follow us on Twitter. Are you a founder looking for your next investor? Visit our free tool VC-Rank and tell us about your business. We’ll send a list of possible investors right to your email’s InBox!

On this special segment of The Full Ratchet, the following Investors are featured: Maren Bannon Sach Chitnis Jonathan Hsu Glenn Rockman Each investor highlights a situation where they decided not to invest, why they passed, and how it played out. Did you miss our guests full length episodes? Maren Bannon Episode 268 Sach Chitnis Episode 269 Jonathan Hsu Episode 243 Glenn Rockman Episode 282 For other great episodes, go to The Full Ratchet blog and catch up! Also, follow us on LinkedIn and Twitter. The host of The Full Ratchet is Nick Moran, General Partner of New Stack Ventures, a venture capital firm committed to investing in the exceptions. To learn more about New Stack Ventures by visiting our Website and LinkedIn and be sure to follow us on Twitter. Are you a founder looking for your next investor? Visit our free tool VC-Rank and tell us about your business. We’ll send a list of possible investors right to your email’s InBox!

Seth Levine & Elizabeth MacBride of The New Builders joins Nick to discuss The Decline of Entrepreneurship in America, Systemic Inequity in Supporting Small Businesses, and the "Capital vs. Labor" Debate. In this episode we cover: Why did you write the book? I’d actually like to start w/ Chapter 6, which is a history of entrepreneurship in the US… we can’t really do it justice in the interview but can you give us an overview of the history and where we are at today? You cover that entrepreneurship has been declining in the US for the past 40 years and more significantly within the past 15. What are some of the big factors that have led to that decline? Why are entrepreneurship and new business creation so important for the future of our country and society? How does the Silicon Valley version of entrepreneurship differ from the reality of entrepreneurship? What does the real profile of entrepreneurship look like vs. what we see in the data on the tech / venture-funded part of entrepreneurship? What can Main Street entrepreneurs learn from the Silicon Valley model of entrepreneurship? You did a lot of research and pulled together data sets/stats for the book — what were some of the most surprising findings from the data? Can you define the ‘capital vs. labor’ debate for us and give us your stance on that debate? Is this book a call-to-action… are you trying to encourage more broad-based entrepreneurship? Seth, how do you reconcile your interests and recommendations from the book with your career which is geared toward funding a very small percentage of founders that are focused on building multi-billion dollar outcomes? You address some issues that are systemic to our country -- government policies, economic system, etc. -- How big of a role do you think politics have in shaping entrepreneurship for the future? What advice or final thoughts would you like to share w/ listeners? Missed a recent episode? Go to The Full Ratchet blog and catch up! Also, follow us on LinkedIn and Twitter. The host of The Full Ratchet is Nick Moran, General Partner of New Stack Ventures, a venture capital firm committed to investing in the exceptions. To learn more about New Stack Ventures by visiting our Website and LinkedIn and be sure to follow us on Twitter. Are you a founder looking for your next investor? Visit our free tool VC-Rank and tell us about your business. We’ll send a list of possible investors right to your email’s InBox!

On this special segment of The Full Ratchet, the following Investors are featured: Reid Christian David Goldberg McKeever “Mac” Conwell II Neil Sequeira Each investor discusses a portfolio company that did not survive and why it was that they failed. Did you miss our guests' full-length episodes? Reid Christian Episode 259 David Goldberg Episode 272 McKeever “Mac” Conwell II Episode 277 Neil Sequeira Episode 281 For other great episodes, go to The Full Ratchet blog and catch up! Also, follow us on LinkedIn and Twitter. The host of The Full Ratchet is Nick Moran, General Partner of New Stack Ventures, a venture capital firm committed to investing in the exceptions. To learn more about New Stack Ventures by visiting our Website and LinkedIn and be sure to follow us on Twitter. Are you a founder looking for your next investor? Visit our free tool VC-Rank and tell us about your business. We’ll send a list of possible investors right to your email’s InBox!