The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch

20VC: Firstmark's Rick Heitzmann on The Rise of Pre-Emptive Rounds, His Biggest Learnings From The Pinterest Board, 2 Things VCs Can Do To Prepare Their Companies For The Downturn and Why Now Is A Good Time to Be Contrarian and Invest In Consumer

Nov 11, 2019

In this engaging discussion, Rick Heitzmann, founder of FirstMark Capital and a leading VC, shares insights from his journey, including his pivotal role in Pinterest’s seed funding. He tackles the rise of pre-emptive funding rounds and how VCs can brace for economic downturns. Rick emphasizes the need for empathy in boardrooms and the importance of effective communication. He also sheds light on the current consumer landscape, underlining why now is a ripe time for contrarian investments and the transformative role of AI.

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ADVICE

Scaling Aggressively

Consider market density and financing risk when deciding to scale aggressively.
Companies like Uber and Lyft could experiment due to ample funding and low capital costs.

ADVICE

Proactive Investing

Proactively seek investment opportunities instead of reactively waiting for fundraising announcements.
Assume companies are always interested in investment and act accordingly.

INSIGHT

Venture Capital Evolution

Venture capital has become more professionalized, with firms adopting structured approaches like buyout groups.
This shift has both positive and negative implications for the industry.

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Rick Heitzmann is a Founder and Partner @ Firstmark Capital, one of the leading East Coast venture funds of the last decade with a portfolio including the likes of Airbnb, Pinterest, InVision, Shopify and Discord to name a few. As for Rick, he led the seed round for Pinterest and also led the deals from Firstmark in Ro, Riot Games, Draft Kings, Discord and Airbnb. Prior to founding FirstMark, Rick was an entrepreneur as a founding member at First Advantage which he helped grow and sell to First American (NYSE: FAF). Rick has been recognized by CB Insights and the New York Times as a Top 100 Venture Capitalist globally.

In Today's Episode You Will Learn:

1.) How Rick made his way into the world of venture and came to found one of NYC's leading venture funds in the form of Firstmark?

2.) How did seeing the booms and bust of the macro impact Rick's investment mentality today? With the impending crash, what 2 things does Rick advise managers need to prepare their portfolio by doing? Does Rick agree with Bill Gurley in saying, "the biggest challenge of today is the over-supply of capital"?

3.) How has Rick seen his style of investing change over the last 20 years? How does Rick think about price sensitivity today? How has that changed over the years? How has Rick seen himself change and evolve as a board member? What does Rick believe makes the best board members? What advice would Rick give to someone who has gained their first board seat?

4.) How does Rick think about the structure of the Firstmark portfolio today? How important does Rick believe it is to have temporal diversification within the portfolio? How does Rick think about optimising investment decision-making processes at Firstmark? Why does Rick believe, despite the negatives, that attribution is fundamentally important?

5.) Does Rick believe that we are in a consumer bubble today? What are the core elements that pique Rick's interest when analysing a consumer investment today? How does Rick think about CAC's scaling way faster and higher than anyone expected? Why does Rick believe the duopoly of FB and Google is now over? Why does Rick believe that true venture size exits can still occur in consumer?

Items Mentioned In Today's Show:

Rick's Fave Book: Moneyball: The Art of Winning an Unfair Game

Rick's Most Recent Investment: Crisp

As always you can follow Harry, The Twenty Minute VC and Rick on Twitter here!