On this special segment of The Full Ratchet, the following Investors are featured:
- Jay Patil
- Mathias Schilling
- Godard Abel
We asked guests to tell the most important lesson they’ve learned in their career.
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 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 rusty Raulston and Jay Patil of swell. VC, Rusty and Jay, can you tell us a story highlighting a critical lesson that has changed the way you invest?
0:45
Yeah, it’s kind of been our shared experience, right where one of the biggest lessons that rusty and I learned early on, and this is kind of like the launch of small fund zero, like that I mentioned, you know, earlier during the introduction, was like this proof of concept fund for us, it was like we didn’t really we want, we didn’t have money, right? Like, Rusty and I it’s like 2000 you know, 2008 2009 2010 like we were just about making rent, making it, making, you know, things work. As New Yorkers, we’re early in our careers, and we made the decision to put our own money on the line before we ever raised a single dollar from LPs. And I talked a little bit about that. What no one talks about is that judgment, honing judgment, crafting judgment, you know, fine tuning it, sharpening it, if you will, anything that’s forced us to be extremely, extremely disciplined. When it’s your own capital and risk you don’t have much data to go off. You learn real quick, right? The early stage, investing is not about jumping on hype cycle. It’s not about following trends. It’s not looking over the people’s shoulders. It’s all about the people. You better have conviction in yourself, better conviction in your own judgment, and you better bring something real and meaningful to the table that actually helps, moves mountains. You know, for the founders that he invested, and it goes back to the investment in atroc was like the first angel check that he ever wrote. Right What stood out at the time, wasn’t just the Tech of the market potential, it was his DNA as a founder, who he was at the core, what made him tick, right? Why was he a founder? Why was this company his life’s work? And he had the track record, he had the expertise, he had the drive, and he had the ability to go out there and recruit the best people on the planet. He is a talent magnet. I think that actually being the trenches with him, helping him hire what was like 40 out of 150 employees. That’s where we really learned what it takes to build real companies. Is actually being in the mode, in founder mode, alongside him, that really shaped our thesis. You know, it’s this people first approach. And he taught us that find the right people with the right mix of vision and drive, and you back him no matter what the market is buzzing about, you know, that is a winning formula, and that’s a lesson we’ve really taken to the heart. We’ve learned it the hard way, and we’ve now deploying that across every decision we make as a series of funds. Very good.
2:59
On today’s special segment, we have Matthias, Schilling of headline. Matthias, what’s the hardest lesson you’ve learned as an investor, and how has that changed the way you invest?
3:07
My biggest learning has been to try to manage asymmetric risk in our in our investing, because in theory, our downside is limited to our investment and the upside is unlimited. And that’s the art of this business, right? I’m German by birth. We don’t we have a tendency to be risk averse. And, you know, I learned over the years, I made the biggest mistake not investing in companies that had crazy risk and but the art is to to make an assessment, you know, really a balance in assessment. You know when, when that’s the case. When you know the risk warrants, sorry, the outcome warrants the risk. And in between, you just have to be consistent, you know, and be patient. And you know that balance between these different factors is the art, and I think that keeps you in the business through the cycles, right? You don’t go crazy in the exuberance like, you know, if you’re exuberant cycle, you’re too late. Don’t go crazy. Stay consistent. You know, on the down market, don’t leave it you know, then it’s again. It’s the moment to be consistent. Find, you know, find your investment strategy. I think, in my experience, you constrain it, you know, constrain it to something that works for you, and then take big risks within those parameters. It’s really
4:34
amazing to me how many, how hard it is for VCs in this industry. You know, they’re supposed to be contrarian. You’ll see, like a big collapse, as we’ve been through and everyone tightens up, oh, we’re slowing down. We’re not doing investments for the next, you know, Silicon Valley Bank crisis. I mean, at least half of my friends in the industry are like, you know, we’re just going to work for with the portfolio for the next six months. I was like, Really, this
4:58
is going to be a great time. I. It’s like, it’s totally empty, yeah, I mean, it’s, it’s completely wrong. That’s why, you know, my biggest learning has to be, has been, you know, be consistent always
5:15
on. Today’s special segment, we have Godard Abel of g2 Can you tell us a story highlighting a critical lesson that has changed the way you lead.
5:22
And I will say it’s, it’s the near failure, you know, almost being bankrupt and, and I think it says that’s, I think it’s made me more prudent, I think more careful as an entrepreneur. I still do at times, but less likely to just over invest. And, you know, keeping a closer eye on, hey, we do have to get profitable, free cash flow positive one day, and never getting too far away from that.
5:51
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.
