On this special segment of The Full Ratchet, the following Investors are featured:
- Rusty Ralston of Swell VC
- Godard Abel of G2
- Han Shen of iFly.vc
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 rusty Raulston and Jay Patil of swell. VC, Rusty and Jay, what is the best question an LP has asked you? That’s a
0:45
good one. I think one of the most insightful questions was when an LP asked us, you know, not about fun metrics, but it was, you know, tell me about your values. You know, who you were as a kid, who you are now, and who you’ll be in the future. And I think that I love the question because, you know, that’s foundational, right? It’s like, if you want to go into business, someone for for 1020, 30 years, that’s the right question to be asking, because trust, character, integrity, you know, are truly foundational. And I think that our relationships with LPs and founders are building those same values. And we’re not just in this for a fun cycle. We’re in it for decades. And I think that was a just a good question, kind of to get to the heart of being a business partner with someone for decades.
1:35
On today’s special segment, we have Godard Abel of g2 Godard, what’s the best question a VC has asked you, why are customers churning? Why is that the best question? There’s a lot of insight in and obviously we all tend to market more what’s working right, but what’s not working. And I think there’s a lot of insight there. And I think also as entrepreneurs, a lot of insight, like, how do you keep getting better? And I think as an entrepreneur, that’s kind of what I tend to like focusing on. Obviously, I love that, the happy stuff, but I also I always want to get better and like that Dan Hercules proven, I think he learned from the failures.
2:10
On today’s special segment we have Han Shin of iFLY Han, what is the best question an LP has asked you? The best
2:17
question is, why are you different? Right? I love that question because the answer is not simple, but you cannot say, Oh, we bet on the next generation AI solution for XYZ. I mean that to me, is not only not differentiated, but also just kind of lame, right? If my associate comes to me say, Oh, they love this company because it’s a next generation AI enabled solution for XYZ. I said, Look, you know, let’s use human language describe why you’re excited. So the differentiation actually does require GP or founders, and of course, myself, to have a deep thinking why we’re different. The difference is not just a surface, not just about what I say, right? It’s also down to the day to day activities, from sourcing to investing, deal structure and portfolio support. So to summarize what we do, right? So it’s a very much thesis driven conviction based with a ton of research as a background before we ever get serious about investing. With the conviction, we put a sizable check, typically a couple million dollars, into a company, and build a very, very concentrate portfolio. So last seven, eight years, a total number of investments is 15, right? And then, of course, with the concentration, we are motivated to spend time, and actually we can afford to spend time with these founders. But when you when you really look at it, every piece is interconnected, right? I can tell people, it’s all conviction driven, but I invest in 200 companies each fund, then the model of taking a phone call from founders at midnight would not work, right? So, so nowadays, you know, still, of course, a lot of Alps can tell me, oh yeah, I hear what you say, but you’re not differentiated. So I have to think how I reframe the narrative to find a resonance with such LPs. But a lot of founders, or excuse me, a lot of LPs, did like this approach, especially when they are former founders. They appreciate the kind of the depth and the availability, availability of me as a GP, me as investors. So in that kind of a conversation, usually, the first meeting to assigning is the most kind of a swift process, perfect
4:38
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.
