Sep 5, 2016 · 31m · 20vc
20VC: Lerer Hippeau's Ben Lerer on 'Investing With Imagination', Strategies To Avoid Fomo & Develop Pattern Recognition As An Investor and Why We Have Seen The Rise of Direct To Consumer Business & Will This Continue With Further M&A
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of The 20 VC, host Harry Stebbings interviews Ben Lerer, Managing Partner at Lerer Hippeau, discussing the transition from angel investing to venture capital, strategies for overcoming FOMO, pattern recognition, and the mechanics of direct-to-consumer brand building.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 22.6% of the talking time here. How this is scored →
Harry as informed peer 2.6 Guest teaching 2.9 Guest disagreement 1.3 Harry pushing back 0.7
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 25:15 Political Condemnation of Donald Trump
When Harry playfully asks about the prospect of a Trump presidency, Ben passionately reacts, labeling Trump a racist pig and stating his election would be the worst thing in American history.
Hardest push from Harry ▶ 20:35 Challenging M&A vs. $10B Standalone GrowthHarry pushes back against early M&A exits by bringing up portfolio company Raden, questioning why founders shouldn't aim to build $10 billion standalone powerhouses instead of selling early.
Biggest teaching moment ▶ 16:40 Reframing DTC Advertising PipesBen educates Harry on why direct-to-consumer is no longer just about removing the middleman, explaining that modern brands win by mastering new social discovery pipes like Facebook and Snapchat over legacy TV ad networks.
Harry holds his own ▶ 20:35 Framing Portfolio Strategy and Standalone UpsideHarry demonstrates keen awareness of Lerer Hippeau's investments by referencing suitcase brand Raden and framing a sophisticated trade-off between investor liquidity demands and massive long-term standalone upside.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Ben Lerer's Origin Story & Founding Lerer Hippeau | 1 | 3 | 1 | 0 | Ben shares the origin story of Lerer Hippeau, detailing how operating Thrillist alongside his father's work at Huffington Post led to angel investing and eventually raising a fund. Harry listens attentively and interjects briefly to confirm Ben's age during the timeline. | |
| Transitioning from Angel Investing to Institutional Venture Capital | 2 | 2 | 0 | 0 | Harry asks how the transition from personal angel investing to institutional money changed Ben's mindset. Ben explains that core principles remain the same, but institutional investing requires more structure, brand-building, and balancing gut instincts with fund discipline. | |
| Strategies to Avoid FOMO in Early-Stage Investing | 3 | 3 | 1 | 1 | Harry smoothly pivots off Ben's mention of gut decisions to ask about managing FOMO in early-stage venture capital. Ben elaborates on strategies to avoid herd mentality, such as ignoring co-investor names and moving quickly with strong conviction. | |
| Evolution of Pattern Recognition and Evaluating Teams | 2 | 3 | 1 | 0 | Harry asks how Ben's pattern recognition has evolved over a decade of investing. Ben explains that as big obvious ideas are taken, disruption moves further out from core sectors, emphasizing the need to stay team-focused. | |
| The Rise of Direct-to-Consumer (DTC) Business Models | 3 | 4 | 1 | 0 | Harry references portfolio company Raden to kick off a discussion on the rise of direct-to-consumer businesses. Ben breaks down the fundamental shift from linear TV ad pipes to modern social platforms and predicts major corporate consolidation. | |
| Navigating M&A versus Independent Company Growth | 4 | 3 | 1 | 2 | Harry asks a sharp question contrasting M&A liquidity for VC funds with the potential for portfolio companies to become multi-billion dollar standalone businesses. Ben outlines how he balances founder ambition with investor expectations for liquidity. | |
| Quickfire Round: Books, Vision, Mentors, Politics & Everytable | 3 | 2 | 4 | 2 | Harry leads a quickfire round covering books, firm vision, mentors, and politics. Ben responds with passionate hostility regarding Donald Trump's presidential run before detailing his enthusiasm for his latest investment, Everytable. |
Statements from this episode (12)
Ben Lerer: Best Early-Stage VCs Are Former Operators, Not Number Crunchers
“But for me, the best investors, particularly the best early stage investors are going to be people who have actually been in the trenches and built and sold their own businesses and raised money for their own businesses and gone through sort of that slog versu…”
Ben Lerer: VCs Should Invest Institutional Capital Like Personal Money
“I think in its best scenario, you invest other people's money the same way that you would invest your own money.”
Ben Lerer: VC Firm Branding Drives Top-Tier Deal Flow To Spot Outliers
“Brand is what gives us so much Amazing deal flow, which enables us to really be able to see enough companies to be able to identify the ones that seem to be the outliers and the really special ones”
Ben Lerer: Seed Investors Must Rely On Imagination Because Startups Pivot Frequently
“So many of the businesses that we invest in don't end up looking like what we invest in. We need to be able to have an imagination.”
Ben Lerer: FOMO Is A Bigger Factor In Early-Stage Investing Than Late-Stage
“FOMO is a part of life as an investor, and I think more so a part of life in early stage than in later stage.”
Ben Lerer: Blinding Co-Investor Information Leads To Cleaner Venture Decisions
“Making sure that we in some cases have less information about who's investing makes me more capable of making cleaner decisions.”
Ben Lerer: Most Big, Obvious Tech Startup Ideas Have Already Been Claimed
“So many of the big obvious ideas have been taken and there's multiple companies building them. It's rarer that we see some life changing, brilliant invention or idea that we never imagined would be possible.”
Ben Lerer: Simply selling direct-to-consumer without middlemen is no longer disruptive
“I don't think Just being direct to consumer is disruptive anymore, though. Just selling products without a middleman is no longer enough to sort of consider yourself to be, you know, sort of breaking the old model.”
Ben Lerer: Legacy retail and media will heavily acquire DTC startups
“The last few weeks in retail, I mean, just look at the jet and dollar shave acquisitions. You're seeing, these are the first dominoes in what will be a bunch of dominoes falling. I believe in consolidation where the traditional guys in retail, the traditional …”
Ben Lerer: Long-Term Independent Startups Must Provide Early Investors Periodic Liquidity
“Generally speaking, we'd love our companies to sort of take the approach that you've seen a war be take, for instance, which is we're going to build something for 20 years. We're going to put our heads down. And then in those situations, you would hope that th…”
Ben Lerer: Television made brand building easier 20 years ago
“Brand building 20 years ago was easier in that you, like, you sort of Could buy your brand growth, which was, there was really one channel that, that was so much more powerful than all the others from a marketing perspective, which was television advertising.”
Ben Lerer: A Donald Trump Presidency Would Be The Worst US Event
“Him becoming the president would be the worst thing that has happened in the history of the United States since its inception. I think he is a racist pig who makes other Racist, sexist, misogynistic, disgusting people feel like they are allowed to share those …”