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

On this special segment of The Full Ratchet, the following Investors are featured: Nicole Quinn Niko Bonatsos Niki Pezeshki Shawn Carolan Each investor illustrates a critical lesson learned about startup investing and how it's changed their approach.

Amy Nauiokas of Anthemis Group joins Nick to discuss Embedded Finance, Community-based Fintech, the Demise of Legacy Institutions, and Driving Returns with a Diversity Investment Mandate. In this episode, we cover: Tell us a bit about your background and your path to venture. Anthemis. What is it? Tell us a bit about the thesis and what you guys do? So where do you find yourself spending most of your time? Amy can you give us a quick primer on the difference between FinTech and tech fin? What is your quick take on regulation? Are there still major obstacles that need to be overcome? We've seen large tech in some ways abuse opportunity before in FinTech and in other areas, that I'd be curious to hear what your take is on sort of the established incumbent large legacy financial institutions. How do you see them adapt in order to capture value and attempt to maintain their position as well as direct access to customers? Let's talk more about embedded finance. How do you think that may affect wealth management, investing brokerage going forward? Let's talk a bit about banking as a service. Can you give us an overview of some of these banking as a service platforms and maybe an example of a non financial company? And, you know, maybe the initial offerings that they are incorporating to improve user experience for customers? Is Anthemis looking at virtual assets? What is Anthemis doing to promote diversity and underrepresentation in venture? I suspect there's also a belief that investing in underrepresented folks in women can outperform not doing so is that is that part of the thesis or not? There's been a lot of changes in dynamics going on in venture capital from Spats to huge players in the late rounds and non-VC and financial players entering. There's also the mega-rounds that are now entering early-stage investing. I'd love your quick take on any of those sorts of phenomena that are occurring in venture capital. What do you know, you need to get better at? What's the best way for listeners to connect with you and follow along with Anthemis?

On this special segment of The Full Ratchet, the following Investors are featured: Paul Martino David Goldberg Maren Bannon Neil Sequeira Each investor discusses sectors, drivers and/or trends that may have significant impact in the future and are potentially positioned for outsized-returns.

Billy Libby of Upper90 joins Nick to discuss Non-Dilutive Financing Options, Fintech is Eating the World, Digital Asset Aggregation, and Quants Investing in VC. In this episode, we cover: Walk us through your background and path to VC. What's the thesis at Upper90? On the website, it says "We are not looking to finance major technology disruptors but rather the derivative businesses being created around them." Can you explain what you mean by that? How do you underwrite and assess the risk of some of these platform-dependent technologies (channel choke)? If you build businesses that are dependent on top of Facebook, for instance, or on top of Slack, or businesses related to the Amazon ecosystem, like Thrasio, how do you think about the risk of the platform deciding they no longer want to play nice with you? What is the split of your fund - the equity versus the debt component? And the terms of the debt, are there multiple different forms and different terms, or have you standardized that? Do you do some debt in non-dilutive financing options for non-portfolio companies? Or is it always an investment plus the credit? Do you include rights in some of those agreements to convert into equity should you choose? We've seen a lot of players, sort of FinTech startup-ish players, springing up providing access to capital for working capital needs and credit needs. Like Pipe and Lighter cap and CapChase and all these players. How are you similar and different from them? And how do you think about that? Is there ever a conflict, you know, when you're making an equity investment, but you also have debt in these companies? If they get in a tight situation? potential for conflicts? You said that you'll enter at seed. Are there certain metrics or revenue levels that you're looking for other structural dynamics, whether it be collateral or SAS subscription revenue? What's too early would be another question. There are a number of market makers here in Chicago that have entered sort of the VC asset class, what skills or strategies from your experience in your background? What do you think lends well, no pun intended, to driving top returns in venture? Can we get your thoughts on big drivers and opportunities in FinTech over, let's say the coming three years. What do you know, you need to get better at?

On this special segment of The Full Ratchet, the following Investors are featured: Eric Collins Gigi Levy Weiss Tim Guleri Ben Casnocha Each investor highlights a situation where they decided not to invest, why they passed, and how it played out.

Spencer Maughan of Finistere Ventures joins Nick to discuss How the Generational Shift Is Affecting Food, Investing in Vertical Farming and in New Biologics, and Platform Solutions to Food Dilemmas. In this episode, we cover: Walk us through your background and path to VC What's the thesis at Finistere Ventures? Focus? Check Size? Talk a bit about your global footprint, and why that is of value to the firm or the founders? What makes Finistere unique? What do you see as some of the biggest drivers of change in the food value chain? Are consumers going to embrace alternative produced meats when they are ready for market? With classically long timelines, they're expensive (producing a cost-effective product) and production is difficult. How do you think about that when you're underwriting the risk on an investment? What do you think of insect-based protein as a primary protein source and nourishment source in developed countries? What are the food-related effects from the pandemic that are ephemeral versus, you know, what do you think are here to stay? Previously, you mentioned a few areas of vertical farming, new pesticides in FinTech within ag-tech that were of interest. So which of those remain sort of strong categories as you see it today? Any other aspects within the ag-tech sort of lens and frame that you guys are investing forward in? You've also spoken about sort of a shift from point solutions in ag-tech to more platform, can you describe what you're observing here, and where you see the shifts occurring? Lobbies wield incredible power in the Food and Ag space. Is that a challenge that must be managed? For you guys, as a firm focused on investing in very disruptive tech in this space? What do you need to get better at?

On this special segment of The Full Ratchet, the following Investors are featured: Jonathan Hsu Janet Bannister Avichal Garg Simeon Iheagwam Each investor discusses a portfolio company that did not survive and why it was that they failed.

Dharmesh Thakker of Battery Ventures joins Nick to discuss The Future of Cloud, Business Model Transitions from Subscription to Consumption, and The Shift from Technology-first to End-User Value. In this episode, we cover: Walk us through your background and path to VC. What's the thesis at Battery? Any significant differences in types of products being built across geographies? How does Battery segment the cloud infrastructure market and find opportunity areas in the subsegments of most interest? To what extent do legacy IT and legacy software impede the rate at which we can progress with new toolsets and new infrastructure? Is there more appetite for modern solutions, just due to demographics? When ROI is opaque, how do you measure time to value and how might time to value might be different for different decision-makers within the organization? What does top-down enterprise selling moving to bottom-up user and influencer adoption mean to ROI of significant scale implementation to new infrastructure? What sorts of businesses lend themselves well to product-led growth? You've said that managing churn and focusing on customer success is more important now more than ever. In what ways have you observed leading tech companies apply innovative approaches to customer success (expansion and retention)? Should Startups price on a consumption basis early on? Do you believe should the customer success leader report up through the CRL? What are your thoughts on open source and licensing models? There are impassioned, differing viewpoints on this with some worried about the integrity of open source while others cast blame on large tech companies, like Amazon, that are efficiently able to monetize R&D that they didn't invest in. What's your position and how does it inform the way you approach investing in open source? You've been investing in cloud since, I believe, 2008... what stands out to you as you look across the biggest winners? Any common threads or key differentiators? What do you know, you need to get better at? Battery Ventures provides investment advisory services solely to privately offered funds and neither solicits nor makes its services available to the public or other advisory clients. Nothing herein should be construed as investment advice. This podcast mentions certain Battery portfolio companies; for a full list of all Battery investments and exits, please click here. Content obtained from third-party sources, although believed to be reliable, has not been independently verified as to its accuracy or completeness and cannot be guaranteed.

On this special segment of The Full Ratchet, the following Investors are featured: Monique Woodard Sach Chitnis Brendan Wallace Mike Smerklo Each investor describes the most unusual situation or pitch that they've encountered as an investor.

Glenn Rockman of Adjuvant Capital joins Nick to discuss The Future of Public Health, VC Differentiation within Life Sciences, and Preventing the Next Pandemic. In this episode, we cover: Walk us through your background and path to VC. What's the thesis at Adjuvant? When taking on strategic LPs, especially those that are very high profile, and have their own mandates and their own agendas, do they inform you where you deploy capital, or is Adjuvant completely independent and financially motivated? Is there a standard stage within the clinical or development process that you enter in? Standard check size? Are you multi-stage? You're investing in products designed for people who live on just a few dollars per day ... There's a lot of VCs that won't invest in the underbanked category, for instance, because of low-income dynamics and socio-economic effects, even though there are some big, winners and category creators there. When you're pitching this different lens and different frame to LPs in the life sciences space that are used to deploying into a certain model ... that's designed for a different maybe category of patients. How did that resonate? And how were you able to compete against peers in the life sciences space for LPs? Regarding geopolitical risks to deployment and ideological or philosophical risks amongst the public that have been maligned by governments or biotech companies... How do you address risks of that nature, especially when you're going into different countries with heterogeneous agendas across and belief sets across both? Did your firm take an active position investing in vaccines or treatments or COVID-19? And how do you look at that in the short and medium-term? What do you think happens in the future with public health spending? And do you see a lot more dollars being allocated for prevention and other activities to address public health issues? There's this common belief that I hear you disagree with that becoming a good VC requires an apprenticeship. Why do you think it doesn't? Are there any best practices from traditional VC that you embrace and then others that you just ignore? What do you know you need to get better at?