The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:27:23 · Harry Stebbings
[00:27:23] S0: No. I totally get you. I mean, speaking of speed of deals, one final question for the quick fire. But you led a multibillion dollar raise into Robinhood in what I think was about twenty four hours. What was that like in that twenty four hours?
00:27:34 · Nick Shalek
[00:27:34] S1: I'd say it was very busy. I went by in a flash. In some ways, it felt like an eerily unremarkable day. We've known the company for almost a decade. And we'd been through a bunch of complex situations together. We'd re underwritten and invest in the business, I think, seven times, like from the A to the G. Micky had started his career as an entrepreneur building a broker dealer, and we'd built a very deliberate thesis around brokerage, and we'd invested in the category all over the world. So when Vlad called in the morning and said Robinhood had a collateral issue and needed an impossible sum of money right away to try to live up to their brand promise, was actually pretty straightforward for us to say yes and just get to work. And because we understood the problem and because we had... This is really important because we'd spent years building relationships with our banks and LPs and co investors and various people at Robinhood, like we were able to figure out terms and get the liquidity to wire them $500,000,000 that day. I don't want to play it down. Like for us, it was really important across the team, you know, not just we think it'll be a good investment, but because we had the chance to help an amazing company at a moment of fear and volatility. And that's what like Ribbit aspires to be is just like in financial services, you're going to have these challenging moments. So we want to have a steady hand and be smart investors, but more importantly, be good partners.
00:28:42 · Harry Stebbings
[00:28:42] S0: Can I ask you, Nick, when you have those moments where it's like, how much do you need? You know, 1,000,000,000, 500,000,000, or I don't know, not obviously Robinhood, but another company where it's like, we're gonna lose our regulatory authority. How do you deal with them? Are you level headed? Are you quite frantic? What do you do, and how do you digest these oh shit moments?
00:28:59 · Nick Shalek, Harry Stebbings
[00:28:59] S1: I was talking earlier about the value of being thesis driven. You know, another way of saying this is sort of pointing out that you want to pre negotiate the ideas in your mind. When we underwrite an investment, we work really hard to imagine these types of scenarios. And often, like you live through them in small ways with these companies or with other companies across portfolio. That's what it felt like with Robinhood, like we'd been to this movie before. So I think when you've done that, you don't overreact even in a frightening situation, feel like, you know, we understand this business, we've done the work, and let's be steadfast, and the right kind of partner is not the kind of partners who, you know, suddenly try to re examine everything that they know to be true. I think there's a lot of things actually about being a sector focused fund that are a disadvantage that people think are advantage like expertise that we talked about earlier, because, you can become way too full of your own ideas, and you miss that the best companies are often have some very core simple insight. But one of the advantages of being a sector focused fund or a focus firm in general is you can really underwrite and get to know companies and a theme. And I think that can make you steadier as an investor over a long period of time. [00:30:01] S0: I do wanna move into my favorite though, Nick, which is a quick fire. So I say a short statement and you give me your immediate thoughts. Does that sound okay? [00:30:07] S1: Sounds great. Okay. So what's the favorite
00:30:07 · Nick Shalek, Harry Stebbings
[00:30:07] S1: Sounds great. Okay. So what's the favorite [00:30:09] S0: book and why? What must you be reading on the summer holidays? [00:30:11] S1: You know, really I love fiction. So if you ask favorite book, I'd say something like East of Eden or All the Kingsmen just because I think they're timeless parables and beautifully written and fun to read and reread. But if you want something about FinTech and innovation or entrepreneurship, think I a great thing to read is a piece of the action, which is Joe Nocera wrote this book about financial innovation in America over the twentieth century. And one of the reasons I love it is it just reminds you, like, I think a lot of good business history that nothing is new. Like before Robinhood, there was Schwab. And before Stripe, there was Visa. And before Chime, was there Bank of America and on and on. Very well researched and written with great pacing. [00:30:45] S0: You are also the first person on the show to suggest that. That's a great moment for me. Tell me, when you think back at the Ribbit journey, what would you have done differently?
00:30:45 · Harry Stebbings, Nick Shalek
[00:30:45] S0: You are also the first person on the show to suggest that. That's a great moment for me. Tell me, when you think back at the Ribbit journey, what would you have done differently? [00:30:52] S1: Yeah, it's easy to say because hindsight is twenty twenty. But I would have done more of the things that we knew we should do. Like the biggest manifestation of this is we could have been even more concentrated in the companies that we really believed in. We've done plenty of doubling down on our winners, but I would try to do it even more. Some of this is classic bull market thinking, but I think the signal was really strong after working with companies even for a matter of months. Other than that, I think most of what I would have done differently fits in the bucket we talked about earlier, where we just had the wrong idea about something or about a company and we did an armchair underwriting. It's fine to have boundaries in places where defocus, but you also need to just go meet the founders and hear it from them. And our worst mistakes have been where we sort of judge from afar rather than finding ways to dive in with real curiosity. What's been [00:31:33] S0: your biggest miss and how did it come about, Nick?