The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:31:33 · Harry Stebbings, Nick Shalek
[00:31:33] S0: your biggest miss and how did it come about, Nick? [00:31:35] S1: Yeah, the biggest miss has been in payments. We've ended up making large investments in payments. But early on at Ribbit, we had the opportunity to invest in in stone and Adyen and Stripe, you know, in a number of companies that are relatively early stage. And we said we're not doing payments right now. Yeah, that allowed us to focus on a number of other things. So you can't really run the counterfactual. But again, I think the miss was we had an idea. And we wanted to stick to that idea rather than just really go and listen and look where the data would take us. [00:32:03] S0: Tell me, what do you know now that you wish you'd known at the start of your career adventure? [00:32:06] S1: Oh, there's a lot. I'll give you two. Yeah, there's the platitude that you have two ears and one mouth, and you should use them in proportion. And in the early days, I thought I needed to have an opinion on everything. And that's how I could provide value, especially since I was young, I didn't have a track record building a huge company, I felt like I needed to have a strategic view on any topic. It's simply not true. And worse, it's counterproductive, since no matter how smart you are, your job as a VC is to cajole and challenge and suggest, but you can't possibly have the answers since you're so much further from the customers than the entrepreneurs. But secondly, if I was giving myself advice, I'd just say buy more Bitcoin.
00:32:06 · Nick Shalek, Harry Stebbings
[00:32:06] S1: Oh, there's a lot. I'll give you two. Yeah, there's the platitude that you have two ears and one mouth, and you should use them in proportion. And in the early days, I thought I needed to have an opinion on everything. And that's how I could provide value, especially since I was young, I didn't have a track record building a huge company, I felt like I needed to have a strategic view on any topic. It's simply not true. And worse, it's counterproductive, since no matter how smart you are, your job as a VC is to cajole and challenge and suggest, but you can't possibly have the answers since you're so much further from the customers than the entrepreneurs. But secondly, if I was giving myself advice, I'd just say buy more Bitcoin. [00:32:41] S0: Well, I mean, that was actually gonna be my next question is like, Ribbit invested fund one directly into Bitcoin. Talk to me about that process and
00:32:48 · Nick Shalek
[00:32:48] S1: the decision there. Yeah. Very early at Ribbit, we were working in the office for Micky's old company, and it was me and Micky and Wences, Micky's longtime business partner. And Micky and Wences just wouldn't shut up about Bitcoin. It was, you know, very fringe, and I thought they might be out of their minds. But for two long time fintech founders from Venezuela and Argentina, it was just mind blowing that there might be a global digital non sovereign form of money, and that you could transact with it fully peer to peer without any financial institution in the middle. They both lived through hyperinflation. So it wasn't a weird idea to them that the currency of record in your country might not be a reliable store of value. Yeah, I'd worked briefly on Facebook credits. So I knew some of the problems of trying to build a centralized digital currency. But when Micky started making noises about buying it in the fund, and I said, Alright, if we're gonna do that, like we better write a letter to our LPs about what Bitcoin is and why. Yeah, I spent a few weeks on that and myself have been kind of hooked on crypto ever since and convinced that, you know, it's one of the best risk adjusted bets you can make anywhere in the world. A lot of people have asked like how we thought about buying crypto in the funds, which other firms just felt like they couldn't do. Know, at the end of the day, think you get the investors, you know, the reactions you asked for, like, we always told our LPs, we might do unexpected things, so long as they were great investments. And it turns out Bitcoin was just the first of many to come like that. And we took the risk, but we also... We've been fortunate to have amazing partners from the start who trusted us.
00:34:03 · Harry Stebbings, Nick Shalek
[00:34:03] S0: I mean, I love it. And I love the conviction back there. I do want to finish, Nick, with, you know, the most important probably, which is the founders themselves that you invest in. Most recent publicly announced investment. And why did you say yes and get so excited? [00:34:15] S1: I'll name a couple because they're both great and very different ends of the spectrum of what we do. Like, we recently backed Adam Nash, who was a longtime, you know, friend and who was CEO of Wealthfront in the past in his seat round. We don't do many seats, but we break that rule when we've known a founder for a long time, and we're excited about their product vision and just wanna work with them. I'm thinking because I don't think the company has a formal name yet, but it's definitely something to watch. We also recently backed a Mexican company called Kavak, which we're convinced could end up being one of the largest companies ever built out of Latin America. The founder Carlos is fantastic, and he's assembled a really world class team with a global ambition. This is a company that we missed for years, just for context, Harry, because we didn't have a thesis on the used auto market, but we see huge upside and very excited to be investing with them now. [00:34:55] S0: Nick, as you know, I've wanted to see this one for such a long time. So thank you so much for joining me, Stan, for putting up with my wayward questions that were a little bit off schedule. [00:35:02] S1: Harry, no problem. It's great chatting with you, and thanks for having me.
00:35:08 · Harry Stebbings
[00:35:08] S0: Love that discussion with Nick and just in awe of all Micky, Nick, and the team at Ribbit have built with the platform over the last decade. Just incredible to see. If you'd like to see more from us, of course, you can on the twenty minute vc.com. But before we leave you today, I have to say I just love using AngelList Fund admin platform to manage my investments. The team and the platform at AngelList takes care of all my back office needs so that I can focus on working with great founders. Leading fund managers have made over 10,000 investments into 6,000 startups via AngelList, all online and all in one place. And with the recently announced rolling funds, you can easily find and invest in these top fund managers on angellist.com/rolling. And let's face it, this new world of remote work is here to stay. And so all of the new headaches that come with running a remote team though, which is a nightmare. Rippling though helps fast growing startups automate their HR and their IT, and now they're making it super easy to manage employees and contractors anywhere. When you hire people in new states, Rippling can now automatically register your startup with each state tax agency and keep you compliant with all the different local labor laws. From there, Rippling lets you onboard new hires in literally ninety seconds. You can instantly set up people's payrolls, benefits, all their apps like Slack and GitHub. So if you're looking for an easier way to run your startup remotely or just a better way to manage your HR and IT, visit rippling.com/20vc. And finally, did you know that there'll be 1,400,000 job openings for developers in 2021? That's where my friends at Terminal come in. Terminal helps fast growing companies build remote high performing tech teams by connecting you with elite global talent and owning end to end processes from hiring to onboarding to remote teams integration. Terminal delivers the product building powerhouse your business needs to grow from workspaces to on the ground support. They take the guesswork out of remote management so that you can just thrive. But don't take my word for it. Take the word of high growth businesses like Gusto, Chime, HIMS, all trusting Terminal with their remote teams, and you can find out more today at terminal.io.
00:37:04 · Harry Stebbings
As always, I so appreciate all your support, and I cannot wait to bring you an exceptional episode on Thursday this week.