Investor Stories 494: Passing on Outliers, Misjudging Founder Quality, and Holding Too Tightly — Lessons from Notable, Superset, and Fika (Solomon, Vaidya, Chen)

SPEAKER_1 (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.

Nick Moran (0:41)

On today's special segment, we ask guests to tell the most important lesson that they've learned in their career. Here's the segment called Lessons Learned.

Nick Moran (0:56)

On today's special segment, we have Glenn Solomon of Notable. Glenn, what is the biggest mistake or hardest lesson you've learned? What's the story behind it?

Glenn Solomon (1:05)

I think my biggest successes by far all correlate most highly with the quality of founding teams I've backed. No matter how great an ideas, if the founding team isn't stellar, the outcome is not going to be great.

I've had to relearn this lesson many times in my career. But thankfully, I've also been bailed out many times by investing in incredible founders who always seem to find a way to make lemonade even if they get dealt lemons.

Nick Moran (1:45)

On today's special segment, we have Vivek Vaidya of Superset. Vivek, can you tell us the story highlighting a critical lesson that has changed the way you lead?

Vivek Vaidya (1:54)

It's along the lines of what I was saying about Satya, right? And it's the lesson that I learned for myself is I cannot do everything myself, even though I might like to, even though things would only be done in a certain way if I had done them. I had to get really comfortable with giving people the space and delegating authority to them, pushing authority down and then giving them enough of the context. That's the other thing I learned. That's the one thing I learned is it's not just enough to delegate. You have to delegate and provide context. And no amount of context is too much. What I do now is I go out of my way to tell people why. I'm asking you to do X, Y and Z.

Why am I asking you to do that? And I either narrate a personal experience or I'll tell them, well, if this happens, that will happen and this will happen, so that providing delegation with context has been key change in the last maybe five, six years or so of how I've led.

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Nick Moran (3:26)

On today's special segment, we have John Chen of Fika. John, what is the biggest mistake or hardest lesson you've learned as an investor? What's the story behind it?

John Chen (3:34)

I think, like many investors, maybe not many investors, in my specific case, I think passing on companies because of the deal spec has been one of the bigger mistakes in... And this again, this runs counter to a lot of what constitutionally, like Fika cares about making sure that, again, incentives are aligned on something that's reasonable on all sides, from a valuation and ownership perspective and all of that. But the ones that are, the outlier outcomes oftentimes look different or outrageous in certain ways. And so, yeah, not allowing the deal spec, maybe the lesson is actually not allowing the deal spec at all to creep into the conversation until you've actually done the real work of understanding the opportunity, the founder quality, et cetera. I think that's like starting with the work before thinking about the deal is a lesson I've had to learn many, many times over.

Nick Moran (4:41)

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, over-prepare, choose carefully and invest confidently. Thanks for joining me.