On this special segment of The Full Ratchet, the following Investors are featured:
- Grant Demaree of Onebrief
- Mark Peter Davis of Interplay
- Glenn Solomon of Notable Capital
Each investor highlights a situation where they decided not to invest, why they passed, and how it played out.
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 discuss their anti portfolio, a startup investment that they passed on. Here’s the segment called “Why I Passed.
0:35
Grant Emery joins us today from the Bay Area. He’s the CEO and founder of One Brief, the defense company building the operating system for military planning. Talk to us about a critical opportunity or decision you chose not to pursue. Was it the right call, and why did you pass on the opportunity?
0:52
I could have acquired a prediction aggregator, like for really, really little money, and like I’m a huge believer in prediction aggregators, as like you know, most of our businesses like you can’t plan without getting to the truth, and production aggregators are a really good way of doing this. And this was long before like the the current wave where these companies have obviously been very successful. Obviously, it was wrong to pass. Like I think from a a purely financial perspective, it makes a lot of sense, and I had this idea in my head that it’s very connected to our core business, and I don’t think at the time I had the credibility to sell that, nor the inclination on all the other things we were doing, and I chose not to make that my main thing. Like if I could go back, I think I would have said no. This is a risk that is really worth taking. I’m willing to stake like all my credibility on like this is this is actually is central to to what we do and like this is a thing that we need to be doing.
1:59
On today’s special segment, we have Mark Peter Davis of Interplay Ventures. Mark, can you tell us about your anti portfolio, a startup that you pass on?
2:10
Oh, there’s a bunch. I’ll throw out one of the earliest ones I remember was my first venture role. We missed Zocdoc. Why I bring up that one? There’s probably there’s been at least 100 since. There’s so many logos that are out there that I saw. Sometimes I even forget that I saw them by the time they’re successful because we’re talking years, years and years. Zocdoc was one that stung because it was the first time I realized how painful it can be to miss. The mentor of mine at the time had a great phrase. It was a veteran VC that there’s always another one, and it’s part of our role, our job to live with the anti portfolio. You have to, if you’re going to play in this kitchen, you have to be okay getting burned with some of these misses. If you’re not missing some, either you’re perfect, which I don’t think any of us are, or you’re not seeing the deal flow. So if you’re going to have a real shot of being legit, you actually have to develop an anti-portfolio by nature. So that was my first moment where I realized I was starting to accrue one. There have been plenty since. I’m sure I could drudge up a huge list.
3:14
On today’s special segment, we have Glenn Solomon of Notable. Glenn, can you tell us a story about a startup that you passed on your anti portfolio
3:24
back in 2010. I had a handshake with Brian Chesky to lead Airbnb’s Series A. Oof, a 10% stake for roughly $7 million. That’s an oof. You’re right, Brian. Return my draft term sheet, crossing out the board seat I’d asked for, saying he didn’t want help at the board for from a Series A lead, and I also got some feedback from a lawyer that was working with me on the deal that couch surfing looked like it might be illegal, be made illegal in New York and some other jurisdictions, and as a result, I got cold feet. I backed out of the deal and lost millions, billions. Now, fortunately, we remained on very good terms with Brian and his co-founders Nate and Joe, and we ended up investing later in their journey. But you know, missing that Series A really haunts me.
4:28
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, overprepare, choose carefully, and invest confidently. Thanks for joining me.
