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

On this special segment of The Full Ratchet, the following Investors are featured: Oren Klaff Tamara Steffens Leo Polovets Byron Deeter Each investor highlights a situation where they decided not to invest, why they passed, and how it played out.

Ben Casnocha of Village Global joins Nick to discuss Backing from Bezos, Zuckerberg, and Gates; Lessons from Reid Hoffman; and Building a Network-centric Venture Firm. In this episode, we cover: - How have things changed for the firm since the pandemic broke? - You've raised from some very big names in tech -- Zuckerberg, Hoffman, Gates, Bezos, Greene, Blakely and many more. How exactly did the formation of Village and fundraise from these notable tech leaders come together? - Village has a unique approach to sourcing... Tell us about the scout network? - Decision making process, architecture when doing deals at this pace and volume? - Many firms talk about their founder networks and Slack Groups. But often if you ask founders, the density and connectivity of those networks are lacking. What is it about your broad founder community that succeeds where others don't? - Worked with Reid Hoffman for two years... what were some of the key lessons from that experience w/ Reid? - YC is in full swing right now... many investors I've chatted with this week are a bit dizzy with the number of companies they're meeting with. Do you invest in companies coming out of YC? - What do you think the future holds for accelerators like YC? - How do you determine when to make an exception on a deal? We all have rules, check-size, valuation range, etc... how do you know when to go off-thesis? - What are your thoughts on the future of Valley-based investing vs. investing outside the Valley? - Thoughts on all these large, multi-stage firms investing at seed and pre-seed? - Capital Supply and concentration is at new levels in the Bay Area... especially for seed investors. While it's reasonable that more great companies will be built with the tools and opportunities available, this all won't end well. I've seen pricing spike and aggressive tactics changing from investors to get access to deal. What are you observing and how do you think it plays out?

On this special segment of The Full Ratchet, the following Investors are featured: -Beezer Clarkson -Alex Osterwalder -Patrick Gallagher -Steve Blank Each investor discusses a portfolio company that did not survive and why it was that they failed.

- You recently published research on the expansion of 175 US companies into Europe. I'd like to discuss a number of points from the piece, but first off… what prompted you to do this research and write the piece? - Part of the report is about timing… ie. when is the right time is for a b2b SaaS company to make the leap and expand into Europe. Talk us through your findings and conclusion w/ regard to timing. - In preparation to make that jump, you recently talked about the challenges for "globalizing" a company and that it really starts at the CEO's desk… what do you mean by that? - As an investor, how do you prepare a CEO to shift mindset from US-centric to a more global one? - When a company makes the leap to Europe, what are some of the most common pitfalls/mistakes they make? - How do the challenges of growing a b2b software company across Europe differ from that of growing it in the United States? - Is there a particular playbook that you follow when bridging the gap between the US and European markets, if so can you share the broad strokes of what that entails? - Do you think it's more difficult for companies to start in the United States and grow into Europe or start in Europe and grow into the States? Why? - As part of the report, you talk about the difference between sales led expansion versus product and engineering led expansion, what are the primary differences? - How has COVID affected which expansion strategy to choose, if at all? - How to build a fully functioning sales force remote from the ground up - What, if any, tailwinds have emerged for the growth of the European tech ecosystem?

On this special segment of The Full Ratchet, the following Investors are featured: Leah Solivan Kane Hsieh Richard Kerby James Currier Each investor describes the most unusual situation or pitch that they've encountered as an investor. To listen more, please visit http://fullratchet.net/podcast-episodes/ for all of our other episodes. Also, follow us on twitter @TheFullRatchet for updates and more information.

Jonathan Hsu of Tribe Capital joins Nick to discuss how to Acquire Data, Build Abstractions and Do Research. In this episode, we cover: Walk us through your background and path to VC What's the thesis at Tribe Capital? How do you define PMF? Could you explain what the 8 Ball diligence framework is? When is a deal too early -- how much data (or over what time continuum do you need data) in order for the model to assess appropriately? Just for evaluation or also sourcing? Can you apply this tool to a range of business types (ie. SaaS vs. Maretkplaces vs. User-Growth, etc.)? How to avoid false positives? Data looks great for early phase -- early market… How do you know that it isn't luck and the company didn't stumble onto something with early signals of PMF but they don't have the insight or flexibility to evolve the business through growth and scale phases? What aspect of early stage investing don't you use data for? Why is this not appropriate to measure with data? Loss ratio goes down -- do you think it increases potential outcome size? On the evaluating side of things, it seems like Tribe has a big emphasis on using data to understand early product market fit. What is your definition of product market fit? Does Tribe conduct portfolio support in a similar way? What happens when data and intuition clash? Do you always lean one way or another? Examples of either? How do you account for exogenous factors? Ever been a scenario w/ a company misrepresenting data (fake data)? How long did it take to build this out -- what is the current team structure of investors, developers, and data scientists? Where do you and the team at Tribe need to improve most? To listen more, please visit http://fullratchet.net/podcast-episodes/ for all of our other episodes. Also, follow us on twitter @TheFullRatchet for updates and more information.

On this special segment of The Full Ratchet, the following Investors are featured: Courtney Reum Mark Suster Sarah Tavel Jason Calacanis Each investor illustrates a critical lesson learned about startup investing and how it's changed their approach. To listen more, please visit http://fullratchet.net/podcast-episodes/ for all of our other episodes. Also, follow us on twitter @TheFullRatchet for updates and more information.

Check Warner of Ada Ventures joins Nick to discuss Structural Disadvantages in Venture, Investing in the "Overlooked," and Open-Sourcing the VC Fund Raise and Investment Playbook. In this episode, we cover: Background / Path to Venture The thesis at Ada Ventures Is it tough getting the up-rounds from Tier 1 VCs when the profile of the founders doesn't look like the standard, obvious profile that's been funded for the past couple of decades? You look for founders and markets that have been mis-priced… what are the three that you believe to be underpriced? Novel scout program -- how many scouts and who are they? How did you recruit them and how are they incentivized? Talk about your recent fundraise… How did you determine how much to raise? Walk us through the timeline of the fundraise. What resonated most w/ LPs? What was the biggest surprise? How did you create urgency and get LPs to move from a maybe to a yes? What will you do differently next time? You and I have discussed your seed investing framework -- how you make decisions on investments. Can you give us the broad strokes? You have an incredibly transparent approach… from your fundraising to your sourcing to your evaluation. Are there any concerns about revealing too much about your strategy? You publicized your investment process and shared some of your funnel data. Have you noticed any differences or changes (relationships with founders, LPs, brand, PR) from when you shared the inner workings? Many issues w/ racial and gender diversity in the news… what message would you like to share re. Diversity? "3 Data Points" Let's say you are approached to invest in a consumer user-growth company with 30k DAUs, and has a 10% WoW growth rate for the last 4 months. Catch is you can only ask for 3 data points to make your decision. What 3 questions do you ask for? To listen more, please visit http://fullratchet.net/podcast-episodes/ for all of our other episodes. Also, follow us on twitter @TheFullRatchet for updates and more information.

On this special segment of The Full Ratchet, the following Investors are featured: Ramy Adeeb Somesh Dash Jeremy Neilson Minnie Ingersoll Each investor discusses sectors, drivers and/or trends that may have significant impact in the future and are potentially positioned for outsized-returns. To listen more, please visit http://fullratchet.net/podcast-episodes/ for all of our other episodes. Also, follow us on twitter @TheFullRatchet for updates and more information.

Niki Pezeshki of Felicis Ventures joins Nick to discuss Finding Markets with Long-Term Tailwinds; Macro Impacts on Venture; and Robust vs. Fragile Data. In this episode, we cover: Background and path to venture. Thesis at Felicis and your focus there? How has the pandemic affected your approach to investment? You've mentioned that you look for market tailwinds, especially tailwinds that will be lasting. Right now, we're seeing a number of shifts that will have lasting effects -- which are you watching most closely? Why do you think the public markets have, largely, stayed high during a very large health and economic crisis? Can you give us an overview on your three-part investing framework for making investment decisions? Where do you look for these large shifts, creating opportunity -- aside from Mary Meeker's report? How do you make sure you are current on-trend instead of getting anchored on data that's old or fragile? What are you looking for in the business model that indicates to you that it is not only the correct approach but can lead to transformational changes in the industry? In which types of businesses do you like to see product-focused founders versus marketing-focused founders, is there a heuristic or systematic way that you think about this? You mentioned that business is a formula and that it's clear early on whether it's going to work or not -- can you give us an example of the formula? What's your approach to coaching and advising founders? There's this fine line between being overbearing w/ advice and not providing enough insight in an area that could derail a company. How do you strike the balance? What keeps you up at night... the ones you invested in that you shouldn't have or the ones you didn't invest in that you wished you had? 3 Data points: Let's say that you have a consumer SaaS company that is doing 300K in ARR, growing 20% MoM and that's all you currently know about the company. Which 3 data points do you ask for and why? To listen more, please visit http://fullratchet.net/podcast-episodes/ for all of our other episodes. Also, follow us on twitter @TheFullRatchet for updates and more information.