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

Semil Shah of Haystack joins Nick to discuss First Institutional VC Fund Raised-- Key Learnings, Part 1. We address questions including: Maybe we can start off with how your investment focus has evolved since the last time you joined us. What are your thoughts on how seed has split into pre-seed, seed, seed extension, and post seed? Are you investing once with a company or reserving for these various stages within seed? You just closed fund 3... tell us about the first two funds that set the stage. Would you do things differently if you could go back? Which raise was the hardest? How did the expectations of LPs change from the early funds to the institutional fund? What surprised you most about the raise? Did you connect w/ prospectives through referrals, cold calls, a combination? Walk us through the metrics... how many targets, meetings, avg commitment amt, etc. Did you ever think you might not complete the raise? What's the best advice you got on the raise and who'd you get it from? In our first interview, you talked about how you couldn't get a full-time job at a venture firm. I'm sure you've had plenty of offers as you've built a track record. Did you ever consider making the jump? When I sent my fund deck to you, you said "Awesome and looks good. As I always say, the deck matters much less than having capital partners who believe in you" For anyone listening that aspires to raise... talk about what you meant by this comment.   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: -Ben Einstein -Ezra Galston & Stuart Larkins -David Cowan 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.

Guy Turner of Hyde Park Venture Partners joins Nick to cover founder profiles and the characteristics that lead to the strongest startups. We address questions including: You've observed over 50 startups, across your portfolio, and have written extensively about founder profiles. What are the two high-level categories of characteristics that you've observed? Within the inspection characteristics category... what are the three dimensions that matter most? The first two modes seem to differ primarily on the experience dimension... what are the two modes and what are their strengths and weaknesses? Mode 3 you call the exec turned founder.... and mode 4 seems to have the ingredients for big outcomes or big flameouts. Walk us through each of these and their defining characteristics. We've discussed four modes, but based on your framework there should be eight. What about the other four modes? Do you think modes 1 and 2 work better for all investors or just HPVP? Dealflow filtering and evaluation... can you use the inspection characteristics? So we've discussed the inspection characteristics... let's transition to the the second major category, the experience characteristics. Talk more about what they are and how you assess them. What are the five actions that matter most in startup teams? How do you handle a situation where the deal comes late and there's already a term sheet and you don't have time to observe these characteristics over time? What are the five styles that matter most? Self-reflection, do you and Ira and Tim look in the mirror w/ Hyde Park and consider these expectations How about for building the team at HPVP... do you apply founder assessment criteria in your hiring? Are there any soft skills or overlooked founder characteristics that you haven't written about but you look for? What's your take on the issues w/ ethics, not only amongst founders but at the investor level?   Guest Links: Hyde Park Venture Partners Guy on Twitter People part 1: Successful Startup Team Modes People part 2: The Characteristics that Matter in Startup Teams   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.

In today's special segment the following investors are featured: Chris Olsen Jay Acunzo Mike Collett

Today we publish part two of the interview with Chris Farmer of Signal Fire Ventures. In this segment we address: Why he's using Beacon to make VC investments when their are numerous other applications that may have more economic value How he's created an engaged, active advisor network that are also LPs in the fund What characteristics the best advisors share Chris' thoughts on the surge in micros VCs and how that has impacted the asset class Chris' advice for founders raising initial capital Wrap-up of Key Takeaways & a Tip of the Week Guest Links: Signal Fire Ventures Chris on Twitter Signal Fire on Twitter Techcrunch Article:  Watch Out, VCs: Chris Farmer Plans To Massively Disrupt The Industry Part 1 of the interview w/ Chris Key Takeaways: 1- Deconstructing Beacon   Beacon is a connected platform that starts w/ sourcing but also does monitoring, context, diligence, syndication and most importanty, per Chris, portfolio support.  It's a data platform that looks like a Bloomberg terminal for the startup industry.  They started building it seven years ago and they employ a full-blown engineering team of data scientists and tech engineers.  Beacon tracks a vast array of data on 6M different companies.  And Chris started with first principles, asking "what are the KPIs that the management teams of these companies are measuring?"... those are the same elements we should measure with Beacon.  It analyzes items including customer behavior, frequency, engagement, CLV, consumer transactions, financial flows, quality of those flows, news sentiment and also team construction and quality, just to name a few.   And signal fire's platform isn't just for the investors.  There is a UI for advisors and most importantly founders as well.  Founders can utilize heir robust SaaS recruiting platform to address the key need of early stage companies... recruiting top talent.  With Beacon, Signal Fire has set out to tech enable the entire value chain of a venture firm from end-to-end.  Early indications from folks in my network are that it's an impressive platform indeed.     2- The Prepared Mind   Signal Fire did not coin the concept of "the prepared mind" but Chris does follow it.  The approach that came out of Accel has an emphasis on heavy research on existing domains.  The creation of market maps that help visualize the landscape and reveal opportunities.  In a previous episode, David Cowan discussed his approach to the Space vertical that leverages this methodology.  And in Chris implementation, he is constantly refining the maps.  He meets with LP experts and founders to go much deeper and broader than they could do w/ data alone.  The result is that Signal Fire is often much less bullish on the en vogue sectors and vice-a-versa.  Their investment in pizza making robot company, Zume, certainly illustrates their fresh perspective on an oft-ignored industry.   3- The Common Thread of Success    I asked Chris for a common thread that he's noticed across successful startups.  And I really enjoyed his response.  The common thread in winners are those companies that are doing things full-stack. They are creating an end-to-end solution that is vertically integrated.  Where a company can be it's own customer in order to provide a better solution for the end consumer.  I discussed this concept w/ Charles Hudson in a previous episode.  We talked about finding the place within the vertical supply stack that enforces discipline on the chain and drives the most value.  Chris point was compelling in that he looks for startups that own the chain, not just a part of it.   Tip of the Week:  Tail Wags Dog -- The Affinity 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.

Chris Farmer, Co-founder of Signal Fire Ventures, discusses their data engine, Beacon, and its unique approach to investing in startups. They address founder pain points, how Beacon drives value, and their research-driven approach to investing in emerging sectors using deep maps and machine learning.

On this special segment of The Full Ratchet, the following investors are featured: Nathan Benaich Ethan Kurzweil Jonathon Triest & Brett DeMarrais Each investor describes their investment thesis and how they evaluate startups for investment.   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.

Welcome back to TFR for another Cram Session. In these special releases, we have aggregated the takeaways and tips from previous episodes. In this installment, we will be recapping the following episodes: 87. Fintech Investing, Part 1 (Sheel Mohnot) 88. Fintech Investing, Part 2 (Sheel Mohnot) 90. SpaceX & Elon Musk’s Mission to Mars, Part 1 (Tim Urban) 91. SpaceX & Elon Musk’s Mission to Mars, Part 2 (Tim Urban) 93. What’s Wrong with Venture? Part 1 (Dave McClure) 94. What’s Wrong with Venture? Part 2 (Dave McClure)   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: Jordan Nof Pete Wilkins Anand Sanwal Each investor highlights a situation where they decided to invest in a startup and why they said yes.           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.

UILabs recently hosted a panel of IoT experts to discuss the future roadmap for IoT.  I moderated the discussion and the panel included: Ben Forgan, CEO of Hologram Brenna Berman, Executive Director of City Digital, UI Labs Jenny Fielding, Managing Director, Techstars IoT Jim Gagnard, CEO of SmartSignal (acquired by... GE).    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.