On this special segment of The Full Ratchet, the following Investors are featured:
- D.A. Wallach of Time BioVentures
- Nnamdi Okike of 645 Ventures
- Lara Banks of Makena Capital Management
We asked guests to tell the most important lesson they’ve learned in their career.
The host of The Full Ratchet is Nick Moran of New Stack Ventures, a venture capital firm committed to investing in founders outside of the Bay Area.
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Transcribed with AI:
0:19
Welcome back to etfr On today’s special segment, we ask guests to tell the most important lesson that they’ve learned in their career. Here’s a segment called Lessons Learned.
0:35
On today’s special segment, we have da Wallach of time, bio ventures, what’s the biggest mistake or the hardest lesson you’ve learned as an investor, and what’s the story behind it?
0:46
The biggest mistake I’ve made as an investor, I mean, I’ve made many, I’d say portfolio construction, again, is the big mistake that I’ve run into, because there’s a certain win rate you’re going to have on any individual investment. And I do believe it’s just hard to know in advance. You do your best, but it’s hard to know what are going to be the winners and what are going to be the losers. And you know, presumably, everyone should recognize this, because there are, as everyone knows, very few big winners in any portfolio. And of course, if you knew which ones were going to be, those in advance, why did you do all the other ones? So I don’t think anyone really knows, right? So I don’t think anyone knows what the winners are going to be. And therefore, how you build a portfolio is what determines how successful the overall strategy is going to be. And I think this is something that in the past, I’ve under thought, and so across a number of investments, I’ve had some big winners and I’ve had a bunch of losers, but if they weren’t sized correctly, and if they weren’t designed to fit together, it didn’t matter that you had the big winners, because they weren’t sized in the appropriate way to overcome the losers.
2:13
Yep, yep, you’re preaching to the choir, for sure. On
2:21
today’s special segment, we have Nam D ok of six, four or five ventures, what would you say is the biggest mistake or the hardest lesson you’ve learned as an investor? And what’s the story behind that lesson?
2:32
Yeah, we’ve talked about some of the deals that that I passed on over the years. So though I think those should be the biggest learnings, honestly, because we, we live in a power law world as investors, and, you know, like, there are only so many companies that get to massive scale. And if you have the privilege of looking at one, and you don’t invest, I think that should be a bit of a, you know, wake up call. So, so, as I mentioned, like when we started 645, a lot of the inspiration for me was having seen exceptional early stage deals like Skype or like Facebook that we didn’t invest in at insight, and saying, Look, I believe we can find companies like that using this kind of outbound sourcing, data driven approach, you know, investing early, you know, pursuing, pursuing those companies. So, in a sense, like, for me, a little the inspiration of starting 645, was to kind of like, you know, learn from some of those companies in the anti portfolio. And I would say, you know, Aaron also was kind of like minded. I think Aaron was thinking a lot about coming out of a firm, DFJ Gotham ventures, you know, how does he take some of the learnings he had there in terms of deals they didn’t do, and, you know, kind of like, build a firm that would do those deals and and had the intellectual flexibility to do that. So I think that’s a one area of learning for me and for Aaron too.
3:57
On today’s special segment, we have Lara banks of mechanic Capital Management. Can you tell us a story highlighting a critical lesson that has changed the way you invest? Yeah, I’d say for me,
4:08
some of my biggest lessons learned are around kind of like value trap. And my team will know this like I am probably more of a growth the investor because of that I’ve just seen too many times down on let’s go for the second quality company in this arena. It’s cheaper, it’ll still and it doesn’t work out well, and it just doesn’t have that value, kind of discount on entry and higher on exit, or just the entire company doesn’t work out. And so that’s something that really has shaped me and thinking about, let’s go for quality and not pay up, you know, obscenely, but generally, willing to pay more for a quality company with a quality management than one that particularly for in a minority plan if we’re going to go kind of the the lower tier. Mm. Brenna,
5:04
that will conclude this installment of investor stories. If you’re enjoying the program and would like to see it continue, take a moment and leave a five star review in iTunes. Okay, that will wrap things up for today until next time over. Prepare, choose carefully and invest confidently. Thanks for joining me.
