Investor Stories 464: Anti Portfolio Confessions: Missing Twilio, Zoom, DocuSign, MongoDB, and Solana (Austin, Simpson, Chaddha)

**Nick Moran** (0:00)
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**SPEAKER_2** (0:44)
Welcome to the podcast about venture capital, where investors and founders alike can learn how VCs make decisions and reach conviction. Your host is Nick Moran, and this is The Full Ratchet.

**Nick Moran** (1:00)
Welcome back to TFR on today's special segment, we asked guests to discuss their anti-portfolio, a startup investment that they passed on. Here's the segment called Why I Passed. On today's special segment, we have Ethan Austin of Outside VC. Can you tell us a story about a startup that you passed on, your anti-portfolio?

**Ethan Austin** (1:26)
Yeah, sure. One of my LPs started a company called Kin, and he had gone through Techstar Chicago with me back in 2010 I got a name, Sean Harper, and one of our other buddies, Sheil at Better Tomorrow Ventures was an investor. He said, hey, invest in this company in the seed round. I think I just didn't have any money at the time, but I wish.
I just saw they just raised at a $2 billion valuation, I think a couple of weeks ago, and missed on that one, which would have been a nice one to have invested in. There's a lot. The anti-portfolio tends to be larger than the portfolio, but that was one that really hurt.

**Nick Moran** (2:14)
On today's special segment, we have Arianna Simpson of Andreessen Horowitz. Can you tell us a story about a startup that you passed on?

**Arianna Simpson** (2:22)
One thing we think a lot about is correcting our mistakes where possible. In some cases, it's certainly not possible because the opportunity has passed. But I think we erroneously passed on the very early round of Solana.
I think at the time, we had some questions about the architecture and a number of other things. The reality was that the team executed extremely well, and so not long thereafter, we were able to correct our mistake and still join the bandwagon a little bit later than we would have liked, but still early in the grand scheme of things. I think that, and I give a lot of credit to my colleague, Ali, for this, it requires a certain dose of humility as an investor to be willing to say, oh, shit, I was totally wrong about that and I want to fix my mistake. Obviously, it also requires the entrepreneur to be gracious enough to come back and say, yes, I want to work with you despite the earlier no. But investors are human and we often make mistakes, so despite our best efforts, sometimes we're wrong. In some cases, we're actually right, but the answer is still wrong, meaning we had concerns about X, but then the founders fix X, and we might have been right, but maybe they're able to fix it or things like that. In many cases, you have to be constantly re-evaluating your thinking because you might be right at a certain point in time, but still have come to the wrong ultimate conclusion, and so being able and willing to fix that is important. I think that's one of the things that I appreciate about being at a firm that invests in many stages. I think the challenges, there are pros and cons to everything, but I think if you only do seed investments, if you miss the seed, then that's that.

**Nick Moran** (4:29)
It's a benefit of being a multi-stage firm, I guess.

**Arianna Simpson** (4:31)
Yeah, yeah, exactly. And so sometimes we get another opportunity to work with a founder, even if we made the wrong call early on.

**Nick Moran** (4:44)
This episode of TFR is brought to you by adr.org.
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