On this special segment of The Full Ratchet, the following Investors are featured:
- Ilya Strebulaev
- Jake Yormak
- Katelin Holloway
We asked guests to share the best question they’ve ever been asked by an allocator.
The hosts 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
On today’s special segment, we have Ilya strebul of Stanford. Ilia, what is the best question an investor has asked you?
0:44
Well, the best question that a venture capital investor ever, ever asked me is, how can I apply the lessons from the venture mindset to help my most successful and the least successful portfolio companies,
1:07
and your answer was to pull the plug on the least successful
1:11
so to pull the plug on the least successful again, to do it in a very specific way, and to find out the specific way. And for the most successful startups, very often. I think the lesson of the venture mindset is, don’t do much, don’t do much, and wait for them to come back to you if they need advice.
1:35
Interesting. I love that you
1:43
on today’s special segment, we have Jake, your Mac of story ventures, Jake, what’s the best question that an LP has asked you? I The one that comes to mind is probably the bandwidth question of just as you as you’re on more boards of companies and doing more like, how do you maintain consistency? And that’s it’s a hard it’s just hard. We’ve begun to put structures in place. We’ve hired people on our like our back office organization, to create repeatable processes. We’ve created a Scout Program, which has actually gone really well, where we empower a lot of technical and sometimes non technical founders and senior executives at companies to invest on our balance sheet. And there’s a whole average Scout program, and that’s been both like fun, enriching and and very helpful. And we’re also in the in you know, for our next fund, we’re beginning to put together a board of advisors which we actually have, the one of that board of advisors already, but a board of advisors who can actually participate with us on boards, people who shadow us as board observers when Brian or I are on the boards of companies and and then eventually we’ll be able to take board seats on behalf of story ventures as they learn our style and As we really trust them in that capacity. And then lastly, it’s going to be hiring. We’re going to hire a new principal in our next fund, and over time, whether that person becomes a partner and or hiring other partners like in order for an LP to invest in us, I think they have to believe that we not only are great investors, but we can be great firm builders, and it’s a different muscle. It’s one I think we could do really well with, but it’s one we’re currently building
3:33
on. Today’s special segment, we have Caitlin Holloway of 776, Caitlin, what’s the best question that an LP has asked you?
3:39
LPS have asked us a ton of wild questions over the last four years. I think that we’re a really interesting beast in the market in that, you know, technically, we qualify as an emerging manager because we’re not quite four years old. But at the same time, Alexis, the founder of the firm, has an incredible track record and has been in the business for a long time, having been in the first class of YC, being a partner there, starting initialized capital, having those returns on the board. He’s very well experienced. But I’m trying to think, and this is it’s actually a question that I just got recently from an LP. I was doing a diligence call with them, and they asked me the question, why have you led so few deals in this last quarter? And I didn’t like that question. I found it initially offensive, and then I realized that I was just being defensive because of my own thoughts and feelings about building my own brand, and probably having a decent amount of imposter syndrome when you have a business partner that’s as compelling and successful as Alexis, and knowing that I have my untraditional background, and then you talk to a, you know, a big old, you know, institutional LP. Who’s looking for a traditional background and looking for the track record of which I have neither. I realized that my react, my initial reaction to it, was actually just defensive, where I wanted to say that it was wrong, or pull up things from the prior quarter or the past year to say but no, no, I promise. I’m a really good investor, and look at this. And I, my initial response was, Well, you know, it’s about quality over quantity. And that was how I started the conversation. I tried to assuage them, but this was actually a very, very savvy LP and and they wanted to go more deeply, because their criteria, their scorecard, for GPS, was in the process of changing, because the ecosystem is changing. And so they actually were happy that I had not written that many checks in the last quarter and had not led deals. And like I said, we invest collaboratively and we support collaboratively, which makes us different. And again, that’s where my defense mechanism went, where I was like, blah, blah, blah. But this is how you know this early, you know, early signal of fund returner. And this is, this is how I was involved with that deal. And they stopped me politely and supportively, and they said, No, it’s important to us now to understand what GPS do when they aren’t writing checks because pace of deployment matters with, you know, dry powder not being as relevant and and or, you know, as available as it has been, we are now making our decisions between what firms to fund based on what they’re do, what they do when they are not investing, and that I do that all day. So it made me feel better. Made me feel happy for our ecosystem, that it is shifting and evolving in this way. So I took something that, again, you know, was my my BS, imposter syndrome, trying to step in and, you know, smoke and mirror my way out of out of the actual numbers, the facts on the spreadsheet. And I was very pleased to know that there are LPS out there who want to know how we spend our time when we’re not writing checks and sourcing deals. And they they very much, were interested in the fact that we we spend our time developing the portfolio. So yeah, that’s my LP question
7:18
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.
