On this special segment of The Full Ratchet, the following Investors are featured:
- Kevin Stevens
- Manish Patel
- Craig Shapiro
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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You can learn more about New Stack Ventures by visiting our LinkedIn and Twitter.
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.
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On today’s special segment, we have Kevin Stevens of Energize. Kevin, what is the best question an LP has asked you? The best
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question LPS ask is, what is your right to win? We’re in a space that is growing rapidly, both in interest and competitors, whether it’s from folks that have never done this before but have great track records elsewhere, or just new competitors. And they ask, how do you keep winning. How do you keep attracting good deals? How do you keep helping those companies? And I’m fond of this Steve Schwartzman quote, which is, there’s no IP in finance, and I think that’s very true. And so for us, you know, I think we’ve learned over time that our right to win expands. So there was some internal thought, like would in growth equity, jumping from venture to growth equity, like our skills have always been helping and go to market and finance and then finding talent. And it was like, okay, but do companies with 25 million in revenue still need that expertise? Do they still need us? And the resounding answer we’ve gotten is yes. We want that energy expertise on our board. We want this expertise on our board. And so we think a lot about, how do we keep building in house capabilities? We have an in house team called edge that helps our portfolio company, that all work for energize but are free for our portfolio companies to use. And it’s like, how do we keep expanding that moat? Because I do think as we continue to generate returns in this space, smart folks will figure it out, and competition will increase.
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You on today’s special segment, we have Manish Patel of Nava ventures. MANISH, what is the best question an LP has asked you? The
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question I love that LPS ask is like, where do you want to be? You know, because LPS have such a different time horizon than GPS, than entrepreneurs and as an LP, good LPs are not investing in one fund. They’re usually going to invest in three or four funds, right? If they make that commitment, and they’re really asking you, like, what do you want to be in 10 years? And it’s not just like, oh, we want to be a winning firm. We want to be a firm that, you know, it does great deals, blah, blah, blah. Those are all, like, pretty cliche answers, right? What’s your right to win like? Okay, sure, it’s really about what is Nava going to stand for, and what does your firm look like in 10 years? And then the sub question of that, which I think is very interesting, what are you doing today to honor that vision? Right? And I think the best firms do make the sacrifices at time zero or time one to be able to be exist in a great way at, you know, in 10 years from now, you know, if you build, like, we want to build a multi generational firm, so we pay a high tax, my partner and I a tax in the sense of, like, building a team, building infrastructure, our first hire was a CFO, right? If you’re just doing you don’t need a CFO if you’re managing a couple 100 million dollars, right? But, like, we invested a lot in a guy that we’ve worked with in the past, Chris cross as a thought partner for us, right? We knew that was important part of infrastructure for a firm. A lot of firms outsource that, right? But we want to build a multi generational firm, and that’s if you really want to do that, then you got to start building these key capabilities
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in house. Where is Nava in 10 years? Oh, my hope
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is that the firm is right to be something that outlives me, you know, like, I hope that we’ve done excellent deals on series A I also hope that we’ve done deals that have shown people how venture can be done differently. You know, I think the fail case for me would be being a mini Excel, a mini Sequoia. Those firms are great in their own right, but they’re their own firms, right? My hope is that people see how we operate, see what our little special sauce is, our kind of point of views on the world in particular sectors. And they’re like, oh, wow, you can do this, right? It is different, right? There is an opportunity for emerging managers to do different types of venture capital deals, and not just different from the perspective of, like, you know, diversity and different types of people, but how these companies grow and evolve and what they how they impact the world. Because my the thing that I think demonstrates firms better than anything else is their founders, and how those founders grow, and how they choose to shape their companies that then impact the world. And my hope is that we are able to be in some founders that get to that
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scale. Well, you’re hearing it here first on TFR. Remember Nava love it
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on today’s special segment, we have Craig Shapiro of collaborative fund. Craig, what is the best question an LP has asked
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you? Best? Yeah. I would say, well, one thing that comes to mind is that maybe caught me off guard. Actually, in our we raised a bond earlier this year, was they asked me how I define success. And that was a first. It seems like a very obvious question, but it was, it was illuminating in the sense that it was a forcing function to see if our, if we were aligned in what success looked like. And you know, their, their point was, you know, hey, we’ve allocated dollars to these other asset classes that are much more risk averse, be it real estate, private credit, etc. And like, we’re really looking for an early stage manager that is swinging for the fences, that’s, you know, that’s taking big, big risk. And I think that’s, that was a good question, because it having alignment, making sure that you’re, you guys are aligned, as it relates to what success looks like, is, is, I think, critical to like that LP, being with you over the long term. Love it.
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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.
