On this special segment of The Full Ratchet, the following Investors are featured:
- Grant Demaree of Onebrief
- Ben Black of Akkadian Ventures
- Glenn Solomon of Notable Capital
We asked guests to share the best question they’ve ever been asked by an allocator.
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:
0:18
Welcome back to TFR. On today’s special segment, we ask guests to share the best question they’ve ever been asked by an allocator. Here’s the segment called “Best LP Question.
0:36
Grant Emery joins us today from the Bay Area. He’s the CEO and founder of One Brief, the defense company building the operating system for military planning. And what’s the best question a VC has asked you?
0:47
This was in the in the early days, so this was actually at the pre-seed. So we didn’t have any revenue. So I don’t know how credible all my statements were there, but I can tell you, you would have gotten a really good return if you’d invested at that 5 million cap safe note, and I got a question from someone who’s who’s a really big deal in defense tech, and he was genuinely very helpful. He passed, and he was like, “Why is this O and M for operations and maintenance go to market going to work? What he meant was like we’re selling into the department bottom up, and basically asking individual military headquarters to give us some money each year to use our product, and that’s not really how good military sales work. He said that’s going to break in the small single-digit millions. What can I say to that? Like I don’t have any hard evidence that’s not going to. I can be like, hey, well, I I have an intuition that we’ve built something that’s fairly universal that every military headquarters across the world is going to benefit from. Here’s the price point I think they’re going to end up at. I don’t think that’s going to top out anywhere close to there. But but he was like, it’s it’s going to top out at that level. There is a sense in which he was right. I mean, the sense in which he was right. Is first of all, I had totally not thought this through. Second sense in which he was right is it did top out. Like we did eventually get to you can’t go farther on this bottom up individual units pay, but it it topped out at more than an order of magnitude larger than where he said it was, and and there there actually was time to build the network effect from other sources to build the product improvements. I guess the the lesson there is first of all, like the the conversations with investors who passed like were actually really helpful to the extent that they they gave a like concrete objection because my thinking wasn’t that clear until he said that like he was helpful, and second of all, you don’t really know what the truth is until the market tells you. Like I can have my intuition, he can have his intuition, and then we go and do it, and we’re like, oh, well, we have now empirically measured where this stops out.
2:59
On today’s special segment: We have Ben Black, managing director of Acadian Ventures, CIO of PowerLaw Corp, and founder of Raise Global. Ben, what is the best question a founder or an investor has asked you?
3:12
I love the questions when LPs talk to me about like long term. I think when LPs get into you and and and really like try to understand not just what you’re doing today, but what you’re building to. That’s something that I I really like. It like tells me that there’s an LP that I want. If LPs are just like nitpicking me over like recent performance or decisions, and are very backward looking, and I think it gives you a different perspective. So I really love it when when when an LP tries to understand what I’m building, what I’m building towards, and a lot of LPs don’t. They just are looking at like, do I this current fund in a moment? And that’s what I really look for. I think it tells you a lot about an LP. Like those are the LPs you want.
3:58
On today’s special segment, we have Glenn Solomon of Notable, Glenn. What is the best question a founder or LP has asked you? A few
4:06
times in my career, founders have come to me to ask whether they should accept an offer for their company to be acquired. There’s there’s no right answer to this question, and the algorithm depends on circumstances, on the founder’s appetite to take risk, their outlook for the future, their confidence in that outlook. I’ve always tried to bring data to those conversations, and I only tried to express an opinion if asked. I try to stay humble through those processes, even if I think I know what the right answer is, because again, it’s it’s very personal. It’s a very vulnerable time for founders, and ultimately they need to decide. And I think as a VC, I’ve always tried, and I’ve always felt it’s my job to support them in whatever decision they want to make.
5:01
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.
