On this special segment of The Full Ratchet, the following Investors are featured:
- Alan Patricof
- Ilya Strebulaev
- Jake Yormak
We asked guests to tell the most important lesson they’ve learned in their 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 to tell the most important lesson that they’ve learned in their career. Here’s the segment called Lessons Learned.
0:35
On today’s special segment, we have Alan Patricof and Abby Miller levy of primetime, Alan and Abby, can you tell us a story highlighting a critical lesson that has changed how you invest?
0:48
It’s a critical lesson. But I have nieces, which I think is also something that we’ll learn, which is I learned to try to wipe out the biggest risk with the smallest amount of money. And it ties into what Abby said, I’m not a big believer of which, you know, I guess flies in the face of reed Hoffman. But of course, he lives in San Francisco and has been more successful. And I live in New York, not quite as successful. And I can’t say sorry to say I’m very happy with where I am. But I don’t believe in flooding companies with money. And I think that, you know, by just pushing through a low, certainly it’s successful, and a lot of certainly the West Coast type companies that I believe in, and Pico wipe at risk with a small amount of money and then pour in more capital, that is an intelligent way to approach investing.
1:47
On today’s special segment, we have Ilya Strebel of Stanford. Ilya, can you tell us a story highlighting a critical lesson or insight that has changed the way you think about venture capital?
1:59
Oh, gosh, there are so many. Let me give you one example from the from the book. Whenever I talk to anybody about the venture mind stung by the VC who is not an expert on VC who actually know doesn’t know much about VC, okay. They will they will, they will say very critically Oh philia. We see, well, how about Threadless? Okay, how about Elizabeth, the founder thoroughness and isn’t the case when VCs fail. And the critical lesson here is that in fact VCs did not fail. The reality is if you look at the cap table, so look at the investors who invest in Serrano’s, there are no VCs, I mean, those small Angel checks by VCs, okay. But there are no VCs. In fact, I did and check out for the book, every single VC fund, every single VC investor that did look at thoroughness. And the FJ wasn’t in their nose. DJ was but a very smart very, very early on, very early on, like the angel check. And by the way, if I would do DFJ and could have put like half a million into rhinos very early on, I would. But Nick, do you remember talked about follow on rounds? They didn’t. They didn’t follow on. Alright, interesting. So, right. And if you looked at the Serrano’s board, they had Secretary of State Secretary of Defense, they had all this amazing people. One of one venture capitalists who I interviewed for the book said they were Zynga said said when I looked he’s a famous biotech investor, what he said, When I looked at the thoroughness board, I thought if they wanted to invade Europe, tomorrow, that was the right group of people. But but not for the not for the biotech for what they were doing. And so he passed and so every single series investor passed. So in fact, the critical lesson for everybody outside, okay, outside the VC world is that it works. The venture minds it does work.
4:09
On today’s special segment, we have Jake, your Mac of story ventures. Jake, can you tell us a story highlighting a critical lesson that has changed the way that you invest? I would say it is so hard to achieve that outlier success. It’s hard enough to go from zero to one, but then to go from one to many is even wider enough is even harder. It’s just slightly a different skill set. And we’ve seen a lot of companies go from zero to one that top out. And unfortunately, companies for the most part get acquired on the basis of like they get acquired on the basis of free cash flow in a very good environment. So four years ago, five years ago, they would get acquired more oftentimes for strategic reasons, and the promise of like future cash flow or the ability paired with an existing distribution network. To grow faster, that has become really hard. In today’s environment, the bigger tech companies are not able to make a lot of the acquisitions they used to make. And there’s just not as much acquisitive behavior. And so if you’re not going to get acquired by a strategic, then there is like, no, there’s just no middle point exit, you can’t get out if you don’t find a strategic or have ridiculous, like a ridiculously good business. And so I’d say the biggest lesson is, again, it comes back to the founders and the people invest in the people that are able to put it all together that can go from zero to one and one to many do your best to invest in those people. When you when you invest in a company that got from zero to one and you anticipate is not going to get from one to n or one to many, then it’s that it’s try and be transparent and direct with those founders and try to help bring in the right people to get the company there, which is not always in the control of the investor. So it’s probably the difficulty of going from one to N more than from zero to one.
6:17
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
