On this special segment of The Full Ratchet, the following Investors are featured:
- Todd Klein
- Larsen Jensen
- Alex Edelson
We asked guests for the most important piece of advice that they’d share with folks early in their venture career.
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:
0:19
Welcome back to TFR on today’s special segment, we ask guests for the most important piece of advice that they’d share with folks early in their venture career. Here’s a segment called key advice.
0:36
On today’s special segment, we have Todd Klein of revolution growth. Todd, if you could share one piece of advice with a young, new investor, what would you tell them? Okay,
0:45
I’ll do this in the form of an old joke. Okay, that used to be associated with the moving industry, but at the time of the.com bubble, it jumps species, so to say. And here’s how it goes. Are you ready? Here’s how it goes. Four venture capitalists are in a boat going across the ocean. Boat hits a rock. They have to bail out and they get into a little lifeboat. Okay, unfortunately, once they get into the lifeboat, they realise there’s only room for three of them, and they have to figure out a fair way to throw somebody over the side. So the first VC pipes up and says, Oh, you know, we have the longest standing reputation. We’ve got the, you know, we’re the most well known firm. I should stay. Second one pipes up and says, no, no, no, no, no. Our fund just killed it last time. We have the highest IRR and DPI and all these statistics. I definitely should stay. The third one says, no, no, no, no, we have the most AUM, we’re the biggest and baddest on the block, whatever, and I should definitely stay. And the fourth one just thinks to himself, I’ll just dip my toe in, and they’ll all follow. Okay? And to me, the biggest risk to a new investor, a young investor is me too, thinking, right, if you can establish your own independent views and not say to yourself, they’ve got an AI deal. I need an AI deal. Like if you can do that, then you’re going to have a really good career. Do you
2:12
recall the first investment you made that was truly out on a limb, contrarian, maybe one that would go against the grain of of of what the example you’re giving here is,
2:22
I’m trying to think of a good example. And if not, no worries. Yeah, no, I don’t, I don’t have a great one. I mean, temper pack was a little that way. It’s a sustainable packaging company. And you know the idea that you can replace Styrofoam peanuts with, you know, some totally organic, actually edible, ironically, substitute. People were very dubious that that was the case. But in fact, not only can you but consumers strongly prefer like if you’re ordering organic meal, the fact that it would come in styrofoam is, you know, is counterintuitive, and for most people, unacceptable. So the idea that people would only make a purely economic decision, or, you know, would care about that, versus just getting what it is that they ordered. There were some folks who were doubtful of that. Yeah,
3:09
I could see why.
3:16
On today’s special segment, we have Larson Jensen of harpoon ventures. Larson, if you could share one piece of advice with a young, new investor, what would you tell them deliver
3:26
value before you ask for anything? This is the single piece of advice I would have given my former self too many times, people show up and they want something, they ask for something without ever delivering anything. I think if you’re an early investor and you’re trying to build relationships in the ecosystem with the goal of finding amazing deals to invest in, you have to offer something or nobody’s going to call you back. My conversations with founders are concretely different. If I show up to a conversation, well read, well researched, I understand the comps, and more importantly, I understand the budgets. I know who’s going to buy it. And I’ve had those conversations with early adopter customers to understand their buying patterns for this technology in question. If I show up to a meeting, a first meeting with a founder that I know is amazing, armed that information, we’re already on third base. If I don’t show up with it, I’m struggling to get to first, and I’m probably going to strike out love it.
4:31
On today’s special segment, we have Alex Edelson of slipstream. Alex, if you could share one piece of advice with a young, new investor, what would you tell them? Good
4:39
question. I would say, see a lot of deals before you make many investments. I think it’s so helpful to, like, calibrate on, like, what’s a good deal, what’s a great deal. It’s hard to know early on what’s great and, like, what you’re what’s a fit for you,
4:57
unless you until you’ve seen a lot of deals. It’s fun. Because years and years ago, when I was trying to learn this business, I read a Fred Wilson blog, and we had exchanged some emails and such, but he had written about when he first started, he looked at deals for like, 18 months before he did one, and then I had Brad Feld, who was the other, like, you know, og blogger, right? I had him on the show, and I asked him, like, what’s one of your regrets, or what’s something you would change? And he said, I just would have done way more deals earlier. Oh, yeah, it was, like, the opposite advice, but I think there was a lesson in both. I mean, obviously looking at a lot of deals is really important if you don’t want to lose money. But Brad’s point was, there was a lot of good stuff he was looking at back in the day, and to learn, you just have to, like, get shots on goal, and then your learning pace increases significantly, because you kind of see what good looks like and what bad looks like, and you learn by doing. So yeah,
5:58
both, both resonate with me that wrestling
6:08
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.
