Investor Stories 342: Why I Passed (Green, Walsh, Aoun)

Investor Stories 342: Why I Passed (Green, Walsh, Aoun)

On this special segment of The Full Ratchet, the following Investors are featured:

  • Mitchell Green
  • Colin Walsh
  • Adrian Aoun

Each investor highlights a situation where they decided not to invest, why they passed, and how it played out.

The hosts of The Full Ratchet are Nick Moran and Nate Pierotti 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:

Welcome back to TFR on today’s special segment, we asked guests to discuss their anti portfolio startup investment that they passed on. Here’s the segment called Why I passed.

On today’s special segment, we have Mitchell green of lead edge capital. Mitchell, tell us a story about a startup that you passed on. Oh,

all along. We got. We walked into Pinterest. Now again, it wouldn’t it wouldn’t. It wouldn’t have been on any criteria, but the user traction was insane. My wife had told me about this company. I believe that companies that get giant user traction are built on the are not built on the coasts. Think of it as if you can get the soccer mom in Columbus, Ohio to use your product. You’ll probably build a big business, user traction, it soared. Our former boss at Bessemer. Jeremy Levine, I think it invested like at 4050 $30 million valuation. Traction was going vertical. We met we met guys. There were like 10 of them in a room and I think it was in Palo Alto or Menlo Park, my partner Nima and I were like, Oh, that’s pretty interesting. But again, didn’t invest that didn’t meet our criteria. We could have, of course made an exception. But more than that, we’re like we would have paid like 50 or 60 million. Like I think Andreessen did it at 200 Like God bless them like that they killed in AppDynamics with a company that we met through one of the guy that was on the board of one of our first companies 10 million of recurring route 10 million in revenue licence maintenance. Did a deal, like 200 million, I think sold for 3 billion or something. Oh, it gets worse. procorp. We were investors in Procore, we put a tiny amount in the round that Bessemer did. It was like $60 million valuation or something. We had helped those guys a bunch loved him, too. He and the team there rusty was the CFO like antastic. Guys were like, it’s construction software, though. It’s cyclical. Like this stuff goes up and down. Yep, the Latin the next round, iconic that will Griffith God bless him, like just absolutely crushed it. Paid 200 We’re like, oh, we’ll pay you 160 lost the deal. Oh, well, that costs us a billion dollars, at least, at least. And you know, by the way, we joked, you know, when Procore filed the rest one in like February of 22. Right as COVID started, like, as is happening, though, s one came out. And I remember I sent me sending a note to my partner, Brian was like, well, we got the thesis, right that, you know, the housing markets are cyclical, we just got the timing a little wrong. You know, it built like a billion dollar business by then I got 50 more that we missed up all the time.

Well, as long as the ones you’re doing, you’re losing money, right? Exactly.

On today’s special segment, we have Colin Walsh of viral bank. Colin, can you talk to us about a critical opportunity or decision that you chose not to pursue? Was it the right call? And

why did you pass on the opportunity. So I tend to after you know, many years of being in business, either starting my own company, or having worked in these larger organisations, trust my instincts. And you know, and I absolutely have had, you know, since starting borrow, there have been opportunities to, you know, look at other companies, and that we’ve sort of taken a pass and decided not the right time or not the right fit for what we’re doing. I mean, I can give you one personal story of when I was in the UK, I got offered a role to go join one of the global bank running consumer banking, and I turned it down, because I felt like the culture was broken. And to me, that’s so important to make sure that when you’re taking on any new challenge that that you are doing the right thing for your people for yourself into the environment that you’re going into. And again, over time you, you do develop pattern recognition on certain things, too. So you can trust your instincts, but But you constantly, especially as a founder, and a CEO, you’re making all sorts of choices. It’s not just the things that you choose to do. It’s the many things that you choose not to do that ultimately will help define your success. Yeah.

On today’s special segment, we have Adrian EIlen, founder and CEO of forward, Adrian, and can you talk about a critical opportunity or decision that you chose not to pursue? Was it the right call, and why did you pass on the opportunity? I’ll give you I’ll give you a good one. So so early on, so I know Adam Newman. I don’t know him super well, but I know how to do it. And Adam, you know, checks out for it. And he’s like, this is awesome. And he’s like, I want to put a foreword in every single week. work, I will I will pay for it and everything. And I’m like, No, I’m good. So then Marc Benioff, who’s one of my one of my investors calls me and starts chewing me out. Adrian, what are you doing? You idiot like you’re crazy. This guy’s the golden child, this company is like taking off, you should go do a deal with them. And I say no, you know what, like, honestly, like, I just get bad vibes. Like I just don’t think this guy like, I will tell you it’s maybe not the nicest thing but I’ll tell you the phrase I said I said at some point Adams going to jail and I don’t want to be around when he does. And Mark Mark, you know, honestly, like kind of beat me up pretty hard. Now conveniently, Mark forgets this whole conversation, I’ll tell you but, but he beat me up pretty hard over it. And I look back and I go, You know what, like, sometimes just trusting you’re trusting your gut is kind of the way to go.

That will conclude this instalment of investor stories. If you’re enjoying the programme 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