On this special segment of The Full Ratchet, the following Investors are featured:
- Alexa von Tobel
- Adam Felesky
- Sandeep Patil
We asked guests to share the best question they’ve ever been asked by an allocator.
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:
0:18
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 Alexa Von Tobel of inspired capital. Alexa, what is the best question an LP has asked you?
0:43
Why are you doing this? Why? Why? Why? It’s a really long job. This not a job. It’s unlike any other job. You don’t get to show up and in three years say, I want to take sabbatical, like go hang out more. This is a job. So I think, like, really, really understanding why people do this. And I think not all of them even ask it, why? Why do you want to do this? And getting, like, a, you know, under past the like veil dancer and the canned ones of like, what is motivating you here? In the same way that we back entrepreneurs to come in and do profoundly hard things. Venture is a profoundly hard thing. It is like an incredibly humbling sport, because you really, really, really, not only don’t know if you’re good at it, but then you also worry all the time, but it’s like such a love of the game. So like you worry with love and so, yeah, the why? Why are you doing this? And what’s your why? I don’t know that there’s a better use of my time period outside of being with my children. I don’t given the skill sets that God gave me. I do not believe there is a better use of my time here on this earth. Perfect.
2:11
On today’s special segment we have Adam faleski of Portage. Adam, what is the best question an LP has asked you? I
2:19
think you know it changes over time. I think the one of the good questions, obviously, is, where do you think your alpha comes from? Who on your team has generated the alpha that you have in your returns? How are you retaining those people? Why are people so excited to be on the platform? What keeps keeps them at Portage? I think, I think the the good questions from LPS for me is really about understanding the strengths of our people and and how do we keep them perfect? And how do you answer it look, I work for our people every single day. And, so, you know, making sure that, of course, the they’re, they’re compensated, you know, well above market. But I think it’s more important is, is really giving our, our people, the rope to, you know, think differently. We’re like group think. I think it’s the worst thing you can have in a VC, IC, so we love debate, and we want to push for more debate. I think we’re big believers that the the companies that we we fight about the most or argue about the most, probably end up being the best investments we make
3:42
on today’s special segment, we have Sandeep Patil of QED. Sandeep, what is the best question an LP has asked you?
3:49
They have to ask. What’s the best question they have asked me? I think the questions I found most thought provoking were comparing how international investors have fared in developing markets, and why or why not, it has been easy to get returns from those markets. I’ve really been involved with emerging markets since 2007 onwards, right? When I was a ractus, then at as a consultant, I helped a lot of private equity funds and hedge funds think about their developing markets investing strategy, even to an extent us investing strategy, right? So from an LP perspective, that’s always interesting. Why would developing markets Trump a return that you can get by investing in sort of Frontier avenues, in a US economy, for example, right? Like if you go really after the where the technology is just being formed, why would those returns outstrip something like an India or Indonesia or Brazil and so on, so forth. Well, new bank is a great case example of that where the returns really have outstripped anything that we have seen in a long time. I think a number of other cases why capital formation at a large, large scale can really drive very differentiated returns for. Or private investors.
5:00
You know, as you see us, trained investors that enter international markets, are there common are there common blind spots that you witness them having when they start investing internationally? Yeah,
5:15
yeah. See, I think private investing, investing in general, is a job of pattern recognition, right? So your pattern recognition is only as strong as the data you have been exposed to. If you invest in public market, same thing, right? You can observe trends, and then that formulates your sort of strategy for trade execution, all the way to fund execution and so forth. Same thing holds in public in private markets also. So if you’re a US trained investor going into developing economy, a growth economy, I would say, first of all, growth economies are not for bigness. You should not assume that because there’s a lower concentration of startups or lower concentration of founders, or lower concentration of VC firms, or lower dollar amounts in terms of total dollars invested. Smaller economy size, smaller population size. That does not mean that it would not have complexities of its own right. Every country that you go into, every vertical that you go into, has its own nuances. There is an education to be had. You should have the humility to first learn it, then you can throw dollars and get away with it, sure, but that would be more like getting getting lucky if you want to, especially get into big developing economies, India, Brazil, I would say you really have to learn those geographies. Know the nuances of it. Why like be grounded on your thesis, on why you’re picking this particular company, picking this vertical, before you throw dollars, otherwise your math might go wrong on number of people and number of customers involved, revenue per customer, any number of operational issues, regulatory issues. There’s so many landmines to avoid, I would say, perfect
6:56
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.
