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

Farooq Abbasi of Preface Ventures joins Nick to discuss Funding the Misunderstood Technical Founder, Self Evaluation as a Solo Capitalist, and Capital to Underwrite R&D risk vs. S&M risk. In this episode, we cover: Walk us through your background and path to VC Why did you launch Preface? What's the thesis at Preface? How do you define enterprise/infrastructure frontier enterprise? What's most different about your approach? Are the businesses you fund created and ideated by the founders or is it a collaboration between you and the founders or do you take concepts and bring them to future founders? What's your approach to sourcing? Because your model is different and the founder profile is a bit different than most...  in what unique ways do you provide value post-investment? You're a solo-capitalist...  How do you evaluate yourself and keep some checks/balances on your decisions? Did you put together an LPAC -- if so how big is the group, how often do you meet and when/where do they help? Are you actively investing in open-source startups? What are your thoughts on the Bifurcation in the VC industry... capital underwriting of R&D risk vs. S&M risk? What are your thoughts on biases in founder selection, data-driven predictors of founder success? What's been the greatest challenge in your VC career and how have you overcome it? You’re passionate about Diversity, having founded Diversity.vc in 2016. How are you practicing a more inclusive style of venture capital? Three data points...  hypothetical investment scenario

On this special segment of The Full Ratchet, the following Investors are featured: Darren Bechtel Melody Koh Somesh Dash Jeff Fluhr Each investor highlights a situation where they decided not to invest, why they passed, and how it played out.

On this special segment of The Full Ratchet, the following Investors are featured: Minnie Ingersoll Jim Douglass M.G. Siegler James Currier Each investor discusses a portfolio company that did not survive and why it was that they failed.

Lo Toney of Plexo Capital joins Nick to discuss Common Traits Shared by Top GPs, Why Underrepresented Fund Managers Will Produce Superior Returns, and SPACs vs. Direct Listings vs. IPOs. In this episode, we cover: Walk us through your background and path to VC? Why are Product Management skills similar to the skills required for VC? What's the thesis at Plexo Capital? Do you think a thesis on investing in underrepresented founders will produce superior returns? What do you say to pundits that claim you've restricted your options and will have far fewer managers to choose from... which will adversely impact returns? On a percentage basis... will there be more outsided outcomes from diverse founders (or managers) vs. those that are not diverse? How are you innovating on the LP side? We talked about some of the challenges of raising funds... are there ways that you work with and help emerging managers raising a first-time fund? Not just about performance... especially early on.  What are the common success traits you see in GPs? What's your position on investing in the management company or even the GP itself? Where do you see the market for secondaries evolving? I'd like to talk about the exit market a bit... What are your thoughts on companies listing direct? How about the explosion of SPACs -- net positive or negative for venture? Any unintended consequences that founders (or investors) need to watch out for? Zoom is now worth more than Uber, Airbnb, and Stripe combined... Are the three companies undervalued or is Zoom overvalued... or is the pricing about right? Amazing to see companies like Paypal and Square have surpassed Goldman in market cap "3 Data Points"... You’re approached by a first-time fund manager.  The fund manager did not work for a large, brand-name venture firm before and she has never had an institutional investor.  She has been actively investing for 3+ years.  She plans to raise $20M to invest in 30 seed-stage companies w/ no reserves.  The catch is you can only ask 3 questions (for 3 additional data points) to make your decision. What 3 questions do you ask? 

On this special segment of The Full Ratchet, the following Investors are featured: Elizabeth Yin Michael Cardamone Gigi Levy-Weiss Niki Pezeshki Each investor describes the most unusual situation or pitch that they've encountered as an investor.

Lanham Napier of BuildGroup joins Nick to discuss Scaling Rackspace, The Evolving Responsibilities of a Venture-Backed CEO, and Confronting Big Tech Monopolies. In this episode, we cover: You took on capital from Seqouia, Norwest and others while at Rackspace.  What was the biggest challenge to taking on venture capital? How were you able to move from the early product-market-fit days to true scale... what were the defining decisions/actions that helped you expand exponentially? As a company leaves the product-market-fit stage and reaches scale, what is the job of the CEO or how does the job of the CEO change as the company scales? You've talked about investing "long-term capital"... what do you mean by that? How have you created a fee-light model, where management fees are eliminated? How do you guide CEOs that have been conditioned to think in 12-18 months cycles, when the long-game is much more critical? You've hired and developed a lot of folks over the years.  What advice do you have for young CEOs with regards to selection and/or development of people? Leadership -- great ones emerge in hard times.  What are some of the most important lessons you've learned about leadership? We're in an environment where the largest tech companies have monopolized a lot of the upside in the market.  Of course recently many of the CEOs appeared in front the house judiciary committee.  Where do you stand on the position of large tech companies and how that impacts emerging startups? Do you think China is a threat to the U.S.'s position as world power and tech leader? What would suggest we do about it?

On this special segment of The Full Ratchet, the following Investors are featured: Henrique Dubugras Ryan Gembala Grace Isford Scott Kupor Each investor illustrates a critical lesson learned about startup investing and how it's changed their approach.

Trae Vassallo of Defy Partners joins Nick to discuss Leaving Kleiner Perkins to Start Defy Partners, The State of Venture in the Bay Area, and Maintaining a Beginner's Mind. In this episode, we cover: Can you talk about your transition from Kleiner Perkins? How tough was that decision to make? What was it like to work with John Doerr? What’s the thesis at Defy Partners? When you began Defy you chose not to look at San Francisco. Can you talk about why that is? How do you think this plays out? What will tech and venture in the Bay Area look like a few years from now, when COVID is behind us? Any stats on flight of talent form Bay area to other cities/regions? What changes have you observed in venture/tech that this crisis has either caused or accelerated? You’ve been a founder and can relate w/ the folks you’re working with. How do you try and keep that beginner’s mindset as you gain more experience and get further away from your founder journey? What are some the biggest mistakes you see founders making when pitching investors? What tips can you give founders around building relationships as well as pitching in a completely virtual environment? You experienced a severe personal experience… near death situation a few years ago. How has that changed you as a person and as an investor? 3 data points… Let’s say you’re approached to invest in a consumer hardtech startup. The startup is doing $1.5M ARR It’s growing at 15% MoM And LTV:CAC is 4:1 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?

On this special segment of The Full Ratchet, the following Investors are featured: Jason Whitney Shawn Carolan David Horowitz Jaclyn Hester Each investor discusses sectors, drivers and/or trends that may have significant impact in the future and are potentially positioned for outsized-returns.