On this special segment of The Full Ratchet, the following Investors are featured:
- Rick Heitzmann
- Alexa Von Tobel
- Adam Felesky
Each investor highlights a situation where they decided not to invest, why they passed, and how it played out.
The host 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:
0:19
Welcome back to TFR on today’s special segment, we ask guests to discuss their anti portfolio, a startup investment that they passed on. Here’s the segment called Why I passed
0:35
on. Today’s special segment, we have Rick heitzman of FirstMark. Rick, can you tell us a story about a startup that you passed on? Oh,
0:43
yes, I was it was in a board meeting a while ago, and someone said, Hey, you should look at this company. And we really think it’s super interesting. And I said, Well, what? What do? What’s the founder’s background like? Well, they just dropped out of school. What did they do before? Well, they never really had jobs. Okay, well, what’s the revenue traction? Well, they don’t have revenue. Well, what’s the rest of the team look like? It’s really just the two of them. Okay, well, what sector are they in? And it was like, well, they’re in a sector. It’s highly competitive, and there’s like, 20 guys in that sector. What’s the valuation? Very high. Okay, well, it doesn’t seem like these Google guys are financeable, so I don’t even really want to meet with them. So that was, uh, my kids still remind me of that, of, you know, hey, being, being, you know, overly quickly, dismissive, you know, we made me miss Google. And I think that. I think it worked. I think it worked out for both of the founders and investors there. Despite it, I’m
1:46
amazed that you, you saw that one being based in New York, and it was
1:49
out west. I was in a Sunnyvale based board meeting, and that was some of the existing angel investors and series A investors. And, yeah, it was just, it was, it was probably 2000 ish, and it was, I was disappointed. I was I was leaving, I was heading to the airport, and I thought, hmm, doesn’t seem like there’s a good team or revenue traction or anything. It’s probably not going to amount to anything. Yikes.
2:21
On today’s special segment. We have Alexa Von Tobel of inspired capital. Alexa, can you tell us a story about a startup that you passed on?
2:29
So I will actually way back in the day, as I was building LearnVest, there was a company that my husband cliff. It’s called troop swap, and the founder I never got to meet. So to be fair to me, I didn’t get to meet the founder, because had I, had I met Blake, I would have been like, let’s give him all of our money. It was early, and it was before I built a business and sold a business, but we passed on troop swap, which has gone on to become ID me, which is now like the identification layer of the United States. It’s literally, when you they have a relationship with the IRS, it’s how you will pay taxes. Is through ID me online, and he’s just, he was a, he was a an HBs grad. And, you know, I believe, I don’t want to get this wrong, but I think he was either an Army Ranger or a Navy Seal, I mean, something just a very resilient human being. And I look back, and I always joke with my husband, I’m like, I’m really sorry we passed on that idea. You know, 25k would be worth a wild amount of money, but, but I joke always. I’m like, but I didn’t actually meet him, and the idea at the time was, you know, Groupon for the military, and I didn’t think that was a great idea. And to Blake’s incredible credit, he’s just pivoted and pivoted. And by the way, the punchline of this we ended up putting in some money at one point, at a more expensive price, personally, before inspired existed. But that gives you a sense of one that I regret. I regret because businesses can, if the founder is really resilient and hangs on for 15 years and compounds it. They can, they can want the business can move a lot. And so it’s really, that’s, you know, to answer the question you had at the top of the hour. It’s about the human being. That’s what matters. That’s the most important ingredient. And Blake is a force of nature, amazing.
4:22
On today’s special segment we have Adam faleski of Portage. Adam, can you tell us a story about a startup that you passed on?
4:29
I would say one of my great lunches I had in probably 2016 was with a young entrepreneur called Tom Bloomfield, the founder, Monzo, and he was struggling to raise. I can’t remember now what round that was, and we were pretty young as as a fund, so we didn’t have infinite capital, but we hemmed and hawed about leading a round for Monzo, and of course, we serve. Only should have. I think TS has taken it to a whole other level, but he was a real impressive entrepreneur, and then maybe a bad trade. We did. We were, we were investors in quovo. We back Putnam Lowell, Putnam, who’s a great founder, and they ended up doing a being acquired by Plaid, and I didn’t know that management team terribly well. I do now Jason pate’s A friend and an advisor, but we ended up taking most of the consideration in cash, and definitely should have wrote it and rolled it into the plaid story
5:42
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.
