On this special segment of The Full Ratchet, the following Investors are featured:
- Jon Terbell and Ted Clark of FourBridge Partners
- Lara Banks of Makena Capital Management
- Jim Tananbaum of Foresite Capital
We discuss major conflicts that guests have faced and how they resolved them.
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 discuss major conflicts that guests have faced and how they resolve them. Here’s a special segment called high stakes conflicts.
0:35
On today’s special segment, we have Ted Clark and John turbell of four bridge partners, Ted and John, without revealing specifics, talk about a high stakes conflict. What was the issue that occurred and how was it resolved?
0:49
Well, it’s interesting. We’re limited partners of a lot of these funds, so we’re not directly involved in a lot of conflict. I think what’s changing in the business is that while there are often conflicts among these partnerships. In many cases, they’re becoming more transparent about it. It used to be, in the old days that conflict or turnover was bad. There was binary. It was it was always bad. And I think, as I learned in my career over the last 30 plus years, it depends, you know, conflict or people departures can be positive or negative for the firm, and we’re certainly finding with our better relationships is that they’re inviting us into that conversation, and they’re inviting some collaboration on look, we’re challenged by this either a can you help us with it, or what is best, Best Practices in terms of resolving the situation, whether it’s the career of a junior partner, whether it’s the discussion of a founder retiring in place a partner not pulling their own weight. There are lots of issues. These partnerships are very complicated, and so we can be a sounding board, again, not directly involved in that conflict, but we can offer some experience in our histories that can shed some light and give them some insight as to how to approach it. We’re seeing transparency be something that can help solve these problems pretty effectively.
2:18
On today’s special segment, we have Lara banks of mechanic Capital Management. Lara without revealing specifics, can you talk about one of the highest you faced as an investor, why the issue occurred and how it was resolved?
2:30
The ones that I can always think about are kind of those decisions to add capital to. It’s kind of more on the private equity side, but it’s always hard. It’s like we are at a point where we need a little bit more capital. We have some reason it can be, you know, sometimes a debt payment and, you know, but we think we can make it. And I’d say generally, and the ones that we’ve done, and we’ve done it ways where we add a little bit, but just it’s really hard to kind of get that to work. And, and it’s a conflict, because the manager really wants to make sure it works. And so they do ask you for that capital. And it comes in the case I’m thinking about as a call investment, where the need for extra capital and, and the hope is that can you can kind of around. There are hand reasons where that does work, but it’s usually really challenging to kind of make that turnaround
3:29
challenging at the VC level as well.
3:36
On today’s special segment, we have Jim Tannenbaum of foresight capital, without revealing specifics, talk about one of the highest stakes conflicts you face as a VC, why the issue occurred and how it was resolved.
3:49
You have to be a little I have to be a little careful, you know, in this regard. But what I would say is that we’ve been involved in a few situations where our Brenna, our view of the world is a little more I don’t know if conservative is the right way to say it, you know, or or cautious is another way to say it. And you know, and being an entrepreneur and being a venture capitalist, you have to be an optimist. So you know, the caution, you know, can occasionally run into the optimism in in ways that are frictional, when there’s a spread of opinion, when capital is tight, and you know, and our you know, our general advice, you know, would be, raise more money than you ever need to spend on whatever it is you’re pursuing. And, you know, sometimes people don’t listen to us. And and and sports are split, you know, around that mindset. And sometimes. Entrepreneurs are able to pull it all off, and sometimes they’re not. So I think there’s a, you know, if I were just to go back to the most common, you know, sort of place where I feel like, geez, I’ve been doing this for 30 years, and I’ve seen this pattern just so many times, and I want to cry when I see it develop, because I just, I just, it’s, what’s often the case is you have, like, a really, you know, good entrepreneur and a good set of product, you know, sort of things, but then and read of how difficult it’s going to be, you know, which is, which is less, you know, less conservative and and and then not enough capital is raised to get the job done. And, you know? And that’s a common pattern, you know. And it was, geez, they just don’t have enough capital if these things don’t go the way they think they’re going to go. And so I would say that’s, that’s probably top of, top of my list. And the over the last three years, that’s, that’s really, you know, you’ve seen that story repeat itself, you know, sadly, a few times and and then you have people like Martin, you know, like, who basically is like, like, I’m scared I’m going to get this job done. Like, you know, it’s come hell or high water. And, you know, they focus on getting the capital and getting out from under you know the the roll of the dice of not having the capital.
6:35
That will conclude this installment of investor stories. If you 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.
