Investor Stories 485: Inside VC Anti-Portfolios: Missing Whatnot, Facebook & MongoDB (Dillon, Cheng, Black)

**Nick Moran** (0:00)
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Now, on to the episode.

**SPEAKER_2** (0:24)
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** (0:40)
Welcome back to TFR. On today's special segment, we asked guests to discuss their antiportfolio, a startup investment that they passed on. Here's the segment called Why I Pass.
On today's special segment, we have Natalie Dillon of Maveron. Natalie, can you tell us a story about a startup that you passed on, your antiportfolio?

**Natalie Dillon** (1:05)
Early in my career, I had an opportunity. I met Grant at Whatnot. This was in the thick of the pandemic. I thought he was incredibly sharp. He is incredibly sharp, clearly. I had been looking at the live shopping ecosystem in Asia for years. I actually spent a summer in China when I was in college because I was just fascinated with Chinese consumers and their buying behaviors and patterns. I was a senior associate. I met him on Zoom and I think I talked myself out of it and didn't think that this was the right one.
I look back and deeply, deeply regret not trusting my instincts, not pushing harder, not believing in myself. I look back and I'm like, I had the pieces. This guy was a rock star. It should have been one that I pushed much harder and not pass on.

**Nick Moran** (1:59)
On today's special segment, we have Larry Cheng of Volition. Larry, can you tell us a story about a startup that you passed on, your anti-portfolio?

**Larry Cheng** (2:07)
In my early days as a young investor, I went to Harvard. I was at Battery Ventures at the time, and I went back to visit a school club that I was involved with, and I asked the students, what's going on on campus at school? And they said, there's this new website called The Facebook. And I said, oh, what is it? It's like a social network that had been started by Zuckerberg and Eduardo Severin. And so I spent some time with Mark and Eduardo, and I actually brought them back to my firm that I was working at, and explained to them what a term sheet was, and socialized the term sheet, and so forth.
And ultimately, because I was young and so forth, the investment committee couldn't get their head around investing in a software in college, or in the social network that had like 6,000 users at one school, which is reasonable at the time. And then obviously, Mark and Eduardo went off to the West Coast and launched 200 more schools, and then expanded beyond from there, and it became what it is today. It's well known in the Boston area that I was the first VC to meet with Mark and Eduardo, and I don't wear that proudly. I wish we had invested, but it's interesting to see a company from it's literally three or four weeks old, to what it has become now. It's amazing.

**Nick Moran** (3:17)
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On today's special segment, we have Ben Black, managing director of Akkadian Ventures, CIO of Powerlaw Corp and founder of Raise Global.
Ben, can you tell us a story about a startup that you passed on, your ANTI portfolio?

**Ben Black** (4:05)
This is the most painful pass of my life, and it's one that I still lie in bed, think about all the time. A long time ago, it was in our third fund, and I knew NoSQL databases were going to be big. So you had MongoDB was new, and then you had Databricks, and there was a third one who I've not forgotten the name of.
I was like, really, I said, I got to pick one of these. I probably should have used the bottom all, but I said, I got to pick one. And so I got some of the most smartest people in the room that I knew was the CIO of, VP of Technology at Netflix, the CIO of Yahoo at the time, and a guy that was running 20,000 developers for Disney who was the CIO of one of the Disney divisions, and I was like, MongoDB, Databricks, this third one, which do you like? Sorry, not Databricks, DataStacks. I misspoke, which is no more. It's been bought, and all of them, all three of these calls, all three of them were like, we hate MongoDB because of security problems, and our developers love it, and they all want to use it, but we were trying to get a lot of our stack.