On this special segment of The Full Ratchet, the following Investors are featured:
- Larsen Jensen
- Pejman Nozad
- James Joaquin
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:
0:18
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.
0:35
On today’s special segment, we have Larson Jensen of harpoon ventures Larson, can you tell us a story about a startup that you passed on?
0:42
Nick, there’s so many that I’ve passed on. And I’ve been completely wrong, it’s hard for me to point to it. I’d say since we’ve talked a little bit about Android thus far, I didn’t have the opportunity to invest at the series A so maybe a bad a bad proxy for this. But I remember thinking how much devaluation I thought was crazy at the time, I believe their seed round was something like 70 post and then their series A was in the three hundreds. And it’s just been bonkers since then. So that’s something I mean, I was definitely wrong on you know, that’s not one that I again, passed on. But that’s one where I saw it. I thought that the valuation was out of whack for the opportunity, and I was obviously very wrong.
1:25
On today’s special segment, we have page mon nose out of pear page. Mon, can you tell us a story about a startup that you passed on? Oh,
1:34
there are many of them. But I was doing engine investing we we passed Facebook series A at $80 million valuation? I have actually if you search the web, there’s an email from Facebook lawyer to me, the exact amount was $49,984.36. So it wasn’t like some people say I had an opportunity for me was like why did the money but is it is a long story why we didn’t do it. I think Facebook is like a trillion dollar company today. So probably the million to one cleaners like fewer than 10,000x by then. But there are multiple I think what I learned about you always learn from your mistakes. We the biggest mistakes we I haven’t always done in the Paradise like we like the founders, we overanalyze everything else. And then you know, founders always prove us wrong. Amazing.
2:29
On today’s special segment, we have James Joaquin of obvious ventures. James, can you tell us a story about a startup that you passed on? Well, Nick,
2:37
I don’t like to kiss and tell and talk about, you know, specific startups. But I’ll tell you about an entire category of startups that we passed on at obvious, very good, okay. And this goes back to our world positive thesis, right? You asked me kind of how do you measure world positive? What do you think a world positive startup is and, and our Monday investment teams are filled with discussion and debate on that very topic. And early in the history of obvious, we saw a number of companies that were pitching us that were in this new area of FinTech called Buy now pay later BNPL. And I’m sure you’re familiar, there are some very large exits in this category. So clearly, you can drive venture returns right with Buy now pay later. But when we saw these companies at an early stage, we asked the question, should this be one of the 30 companies in our fund Does this meet our world positive thesis, and while they were creating sort of micro lending for for consumers that maybe otherwise couldn’t access? Debt Capital, we found that it was so low friction and it was so impulse at the point of purchase, that it was more world negative than world positive that it that it had the potential to to encourage people to get over their skis and maybe borrow more than they could support with their income. So we decided as a firm to not invest in that category that it was outside of our thesis in our focus.
4:10
Well, we’ve seen consumer debt has grown substantially saving savings rates have dropped. I mean, 100%, this is a big issue. And we talked before about, you know, Prime Time partners and the older generation, you know, there are some fears that you know, what is this generation do that’s encumbered by massive amounts of debt when they get to retirement age?
4:35
Yeah. For sure. And, you know, it’s all of our responsibility, right? We we need a healthy society. So we need financial safety nets. We need financial literacy. We need you know, of course, we need debt. It helps make capitalism work, but we need people to use it responsibly.
4:59
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
