The Exchanges

Q I mean, I love it. And I love the conviction back there. I do want to finish though, Nate, 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?

A 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 the CEO of Wealthfront in the past in his seed rounds. We don't do many seeds, 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 want to 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 a huge upside, and Very excited to be investing with them now.

AI assessment note: “we recently backed Adam Nash... We also recently backed a Mexican company called Kavak”

Q You mentioned Yale. You mentioned, you know, the prior investing. You know, you worked with the legendary David Swanson. I have to ask this one, but like, what were your biggest takeaways and lessons from working with David? And I guess, how did it impact your mindset, do you think?

A Yeah, it's really pretty amazing to me in retrospect that I got to have one of the all-time great investors as my first boss. Obviously, it's not the usual path from endowment investing to tech investing, but a lot of what I took from Yale has really influenced my thinking. You know, in my view, the LP and the venture business are actually similar in a lot of ways. You know, both are fundamentally about backing amazing people, often with limited control or data as an LP, you know, you're mostly putting money in blind pools. So you learn to really fixate on how to underwrite people and how they might think or act in future scenarios. On lessons from Dave specifically, I'll riff on a few things. Yeah. First, I learned from him that the foundation of great investing is really about getting the incentives and relationships right. So If I were to summarize the Yale algorithm, it would be something like find remarkable people, put yourself on the same side of the table as them, then build rapport. So they let you invest. And so they'll call you in the middle of volatility, which is when you find, you know, a lot of the best investment opportunities. The second thing I guess I'd say is sort of ignore the received wisdom and try to approach investment problems from first principles. And when you're confused, come back to them. And people throw around this term first principles a lot th…

AI assessment note: “On lessons from Dave specifically, I'll riff on a few things.”

Q Okay. So what's the favorite book and why? What must you be reading on the summer holidays?

A You know, I really, I love fiction. So if you ask favorite book, I'd say something like East of Eden or All the King's Men, just because I think they're timeless parables and beautifully written and fun to read and reread. But if you want something about fintech and innovation or entrepreneurship, I think a great thing to read is a piece of the action, which is Joe Nocera wrote this book about financial innovation in America over the 20th century. And one of the reasons I love it is it just reminds you, like, I think a lot of good business history, that nothing is new. Like, before Robin Hood, there was Schwab, and before Stripe, there was Visa. Before Chime, there was Bank of America, and on and on. Very well researched and written with great pacing.

AI assessment note: “if you ask favorite book, I'd say something like East of Eden”

Q Well, that is very kind of you to say, but I do want to start with a little bit on you. So how did you make your way into the very wonderful world of venture and come to be, you know, one of the leading investors in the mega wave of fintech today with Ribbit?

A As far as getting into venture or fintech specifically, I wish I could tell you it was the plan all along, but It's really been a series of unexpected introductions and some serious luck. I actually always had plans to be an entrepreneur. My mom was an entrepreneur, and so from about the time I was 10, that's what I wanted to be. But somehow, I've always ended up reading investment books and working as an investor, so at this point, I've just come to embrace that there's probably a reason for that. As for Rivet, about 10 years ago, I got introduced to my partner, Mickey, who you know well. I was on what I would have told you at the time was an unwavering path to start an education company. I was working with a charter school in Oakland, and Finishing up my master's in education and very much obsessed with the potential for technology to change education. I'd been an investor earlier in my career at Yale investments and then had been part of a team focusing on incubations at general catalyst in Boston. So I knew the venture business a bit, or at least I had a lot of moderately informed, but strongly held opinions about it. And when I got connected to Mickey by a mutual friend named Dan Levy, it was kind of with no pretense other than that I should meet this guy, Mickey, who was supposedly really great. So I had no problem telling him all the things I thought were wrong about his…

AI assessment note: “It's really been a series of unexpected introductions and some serious luck.”

Q No, I totally get you. I mean, speaking of speed of deals, one final question for the quickfire, but you let a multi-billion dollar raise into Robinhood in what I think was about 24 hours. What was that like in that 24 hours?

A I'd say it was very busy. Went by in a flash. You know, sometimes it felt like a pretty, like an eerily unremarkable day. We've known the company for almost a decade, and we'd been through a bunch of complex situations together. We'd re-underwritten and invested in the business, I think, seven times, like from the A to the G. And, you know, Mickey had started his career as an entrepreneur building a broker-dealer, and we'd built a very deliberate thesis around brokerage, and we'd invested in the category all over the world. So when Vlad called in the morning and said Robinhood had a collateral issue and needed an impossible sum of money right away, To try to live up to their brand promise. It was, it was actually pretty straightforward for us to say yes and just get to work. And because we understood the problem and because we, this is really important because we'd spent years, you know, building relationships with our banks and LPs and co-investors and various people at Robin hood. Like we were able to figure out terms and get the liquidity to wire them half a billion dollars that day. I don't want to play it down. Like for us, it was really important across the team. You know, not just, we think it'll be a good investment, but because we had the chance to help an amazing company at a moment of fear and volatility. And that's what Like Ribbit aspires to be is just like in fina…

AI assessment note: “I'd say it was very busy. Went by in a flash.”

Q Well, that is very kind of you to say, but I do want to start with a little bit on you. So how did you make your way into the very wonderful world of venture and come to be, you know, one of the leading investors in the mega wave of fintech today with Ribbit?

A As far as getting into venture or fintech specifically, I wish I could tell you it was the plan all along, but It's really been a series of unexpected introductions and some serious luck. I actually always had plans to be an entrepreneur. My mom was an entrepreneur, and so from about the time I was 10, that's what I wanted to be. But somehow, I've always ended up reading investment books and working as an investor, so at this point, I've just come to embrace that there's probably a reason for that. As for Rivet, about 10 years ago, I got introduced to my partner, Mickey, who you know well. I was on what I would have told you at the time was an unwavering path to start an education company. I was working with a charter school in Oakland, and Finishing up my master's in education and very much obsessed with the potential for technology to change education. I'd been an investor earlier in my career at Yale investments and then had been part of a team focusing on incubations at general catalyst in Boston. So I knew the venture business a bit, or at least I had a lot of moderately informed, but strongly held opinions about it. And when I got connected to Mickey by a mutual friend named Dan Levy, it was kind of with no pretense other than that I should meet this guy, Mickey, who was supposedly really great. So I had no problem telling him all the things I thought were wrong about his…

AI assessment note: “about 10 years ago, I got introduced to my partner, Mickey, who you know well.”

Q pick you? On the flip side of that, obviously, you also have to want to invest, and you said first principles being like thrown around a lot. The other one is conviction. Conviction. And everyone has conviction on this investment. So when we chatted before, you said conviction is critical, but certainty will kill you. Can you unpack this one for me? What did you mean when you said that?

A Yeah, yeah, definitely. And I'll make sure to say this all with a lot of conviction. You know, we felt from the start of Ribbit, one way to be a great investor is to be thesis driven. It doesn't mean you have to have the answers. In fact, you shouldn't, but it means that you have thought hard about what they might be. You've looked at all the data you have available to you. Developed a reasonable hypothesis about the future. So we might take an area like crypto or insurance and write a thesis and share it with our friends and LPs and entrepreneurs and use the feedback and dialogue from all that to get us to a level of conviction that gives us an advantage. And that advantage is when a great founder walks in the door and wants to start something, it's easy to say yes, since we've already pre-negotiated our enthusiasm for what the company might be or how the space might evolve. And to me, that's conviction. The danger in all this is you get too stuck on your ideas. Focusing intently on something doesn't give you a crystal ball about it. You know, things that, that work are often the things that fly in the face of experience. So for example, early days at Ribbit, we had a view that digital payments were commoditizing and would be a declining margin business. And it's the kind of thing an expert would say, and it sounded smart to me at the time, but it turns out to be very naive an…

AI assessment note: “The danger in all this is you get too stuck on your ideas.”

Q No, I totally get you. I mean, speaking of speed of deals, one final question for the quickfire, but you let a multi-billion dollar raise into Robinhood in what I think was about 24 hours. What was that like in that 24 hours?

A I'd say it was very busy. Went by in a flash. You know, sometimes it felt like a pretty, like an eerily unremarkable day. We've known the company for almost a decade, and we'd been through a bunch of complex situations together. We'd re-underwritten and invested in the business, I think, seven times, like from the A to the G. And, you know, Mickey had started his career as an entrepreneur building a broker-dealer, and we'd built a very deliberate thesis around brokerage, and we'd invested in the category all over the world. So when Vlad called in the morning and said Robinhood had a collateral issue and needed an impossible sum of money right away, To try to live up to their brand promise. It was, it was actually pretty straightforward for us to say yes and just get to work. And because we understood the problem and because we, this is really important because we'd spent years, you know, building relationships with our banks and LPs and co-investors and various people at Robin hood. Like we were able to figure out terms and get the liquidity to wire them half a billion dollars that day. I don't want to play it down. Like for us, it was really important across the team. You know, not just, we think it'll be a good investment, but because we had the chance to help an amazing company at a moment of fear and volatility. And that's what Like Ribbit aspires to be is just like in fina…

AI assessment note: “I'd say it was very busy. Went by in a flash.”

Q pick you? On the flip side of that, obviously, you also have to want to invest, and you said first principles being like thrown around a lot. The other one is conviction. Conviction. And everyone has conviction on this investment. So when we chatted before, you said conviction is critical, but certainty will kill you. Can you unpack this one for me? What did you mean when you said that?

A Yeah, yeah, definitely. And I'll make sure to say this all with a lot of conviction. You know, we felt from the start of Ribbit, one way to be a great investor is to be thesis driven. It doesn't mean you have to have the answers. In fact, you shouldn't, but it means that you have thought hard about what they might be. You've looked at all the data you have available to you. Developed a reasonable hypothesis about the future. So we might take an area like crypto or insurance and write a thesis and share it with our friends and LPs and entrepreneurs and use the feedback and dialogue from all that to get us to a level of conviction that gives us an advantage. And that advantage is when a great founder walks in the door and wants to start something, it's easy to say yes, since we've already pre-negotiated our enthusiasm for what the company might be or how the space might evolve. And to me, that's conviction. The danger in all this is you get too stuck on your ideas. Focusing intently on something doesn't give you a crystal ball about it. You know, things that, that work are often the things that fly in the face of experience. So for example, early days at Ribbit, we had a view that digital payments were commoditizing and would be a declining margin business. And it's the kind of thing an expert would say, and it sounded smart to me at the time, but it turns out to be very naive an…

AI assessment note: “The danger in all this is you get too stuck on your ideas.”

Q You mentioned Yale. You mentioned, you know, the prior investing. You know, you worked with the legendary David Swanson. I have to ask this one, but like, what were your biggest takeaways and lessons from working with David? And I guess, how did it impact your mindset, do you think?

A Yeah, it's really pretty amazing to me in retrospect that I got to have one of the all-time great investors as my first boss. Obviously, it's not the usual path from endowment investing to tech investing, but a lot of what I took from Yale has really influenced my thinking. You know, in my view, the LP and the venture business are actually similar in a lot of ways. You know, both are fundamentally about backing amazing people, often with limited control or data as an LP, you know, you're mostly putting money in blind pools. So you learn to really fixate on how to underwrite people and how they might think or act in future scenarios. On lessons from Dave specifically, I'll riff on a few things. Yeah. First, I learned from him that the foundation of great investing is really about getting the incentives and relationships right. So If I were to summarize the Yale algorithm, it would be something like find remarkable people, put yourself on the same side of the table as them, then build rapport. So they let you invest. And so they'll call you in the middle of volatility, which is when you find, you know, a lot of the best investment opportunities. The second thing I guess I'd say is sort of ignore the received wisdom and try to approach investment problems from first principles. And when you're confused, come back to them. And people throw around this term first principles a lot th…

AI assessment note: “First, I learned from him that the foundation of great investing is really about getting”

Q know, many of your companies have gone to multi-billions in valuations and then kind of anything else in that vein, you automatically view with this kind of rose tinted spectacle. And then anything that's done badly, you're like, ah, we're never going to make money. And as you said, that kind of payments, declining margin business, whatever. How do you retain that mental plasticity with the successes that one has?

A You just have to train your mind to constantly be paranoid. And for me, this is a lot of what trying to be a good investor about is maintaining the optimism to see how big something can be and the skepticism to not believe sort of your own BS. And I think it comes from constantly examining what you believe and And then comparing it against the actual data, you know, does this belief hold up? You know, we're all subject to confirmation bias and we want to find data points that suggest that we're right. And it's really easy with the sort of filter bubbles that exist today to go find lots of people who tell you that you're really right about something. But I think when you step back and you say, well, what's the consumer actually doing? What's the customer want? Are they responding to this thing? And why are they doing that? And, you know, that was the thing with payments was we might have this intellectual view of how the space was going to develop, but then when you really looked at what Developers were doing, or merchants were doing, and then you started to see the, the incredibly smart people who were attracted to companies, like, you know, Stripe is, of course, the most iconic example. You know, at some point, you just have to capitulate and realize you're fooling yourself.

AI assessment note: “You just have to train your mind to constantly be paranoid.”

Q I do want to ask on the reinvestment decision-making side, how do you process that? What does that structure look like? I mean, I know a lot of funds have the automatic pro rata that they kind of guarantee. How do you feel about that? And then also how do you structure your reinvestment decision-making process?

A You know, I think if I were to criticize it, we, you know, arguably we spend too much time on it, but our principle from the beginning is we re-underwrite every deal, including follow-on decisions. In follow-on decisions, we certainly take into account The importance of the relationship and the fact that we've been, that it's our default posture to be supportive of companies. And then going back to what I was sort of alluding to before, Harry, I think if a follow on decision happens within a short period of time, and you're struggling with it, a lot of times it's because you haven't done the right work up front. So I always think like, try to do the right work up front so that we can be supportive of the company over time. And then you take everything on a case by case basis. So what we do is We assign, you know, a few people on the team, and we do the same sort of underwriting, maybe it takes us a little bit less time, that we would have done in any other scenario, and we try to let that guide us in terms of what to do.

AI assessment note: “we re-underwrite every deal, including follow-on decisions”

Q You are also the first person on the show to Suggest that. So, uh, that's a great moment for me. Tell me, when you think back at the rivet journey, what would you have done differently?

A Yeah, it's easy to say because hindsight's twenty-twenty, but I would have done more of the things that we knew we should do. Like, the biggest manifestation of this is we could have been even more concentrated in the companies that we really believed in. We've done plenty of doubling down on our winners, but I would try to do it even more. Some of this is classic bull market thinking, but I think the signal was really strong after working with, you know, with companies even for a matter of months. Other than that, like, I think most of what I would have done differently fits in the bucket we talked about earlier, where we just had the wrong idea about something or about a company, and we did an armchair underwriting. It's fine to have boundaries in places where you defocus, but you also need to just go meet the founders and hear it from them, and our worst mistakes have been where we sort of judged from afar rather than finding ways to dive in with real curiosity.

AI assessment note: “we could have been even more concentrated in the companies that we really believed in”

Q ask, you know, we take this forward, you know, you obviously have the Yale experience, and then when it comes to joining venture and joining Mickey, you said to me before, why I tell people not to do what I did when they call to ask about being part of a new fund. Help me out here, Nick. What's the thinking on this, and what did you mean by it?

A Yeah, I just think the odds of a new fund working are extremely improbable. You know, the reasons to be in the venture business is to have a chance to work with the best entrepreneurs. And it's very hard for most people to get in venture because there are these amazing storied institutions and legions of angels and VCs with every sort of angle and specialty. And I don't think you can learn the venture business the right way if you don't see what great companies and founders look like. And you're just at very high risk of that happening with new funds. So you need a really realistic appraisal of the situation. So I knew that and I knew the probabilities, but what, you know, why did I do it?

AI assessment note: “I just think the odds of a new fund working are extremely improbable.”

Q know, many of your companies have gone to multi-billions in valuations and then kind of anything else in that vein, you automatically view with this kind of rose tinted spectacle. And then anything that's done badly, you're like, ah, we're never going to make money. And as you said, that kind of payments, declining margin business, whatever. How do you retain that mental plasticity with the successes that one has?

A You just have to train your mind to constantly be paranoid. And for me, this is a lot of what trying to be a good investor about is maintaining the optimism to see how big something can be and the skepticism to not believe sort of your own BS. And I think it comes from constantly examining what you believe and And then comparing it against the actual data, you know, does this belief hold up? You know, we're all subject to confirmation bias and we want to find data points that suggest that we're right. And it's really easy with the sort of filter bubbles that exist today to go find lots of people who tell you that you're really right about something. But I think when you step back and you say, well, what's the consumer actually doing? What's the customer want? Are they responding to this thing? And why are they doing that? And, you know, that was the thing with payments was we might have this intellectual view of how the space was going to develop, but then when you really looked at what Developers were doing, or merchants were doing, and then you started to see the, the incredibly smart people who were attracted to companies, like, you know, Stripe is, of course, the most iconic example. You know, at some point, you just have to capitulate and realize you're fooling yourself.

AI assessment note: “You just have to train your mind to constantly be paranoid.”

Q I find challenging also is bluntly in a world of COVID and less in-person interactions, the compression of fundraising timelines and Zoom fundraising. Bluntly, it's just made it much harder to build the relationship with the founder, build the relationship with wider team members, feel the culture of the office, and understand that fabric of wonderful. If that makes sense and isn't too cheesy. Do you struggle with that too?

A A hundred percent. I think that's the biggest challenge for us. The fundraising environment, the valuation environment, I should say is one thing. I think that's just a reality that you have to adapt to, but how to build meaningful relationships and partnerships, which we see as kind of a cornerstone of how to be a great investor that that's harder to do. We always think when we're underwriting a deal and this, I learned, you know, as an LP too, the first decision is important, but it's, you should do the work to make the second decision because You often will have to, and especially in this environment, you have to make that decision before you have a chance to collect all that much more data. But, you know, even more importantly, if something goes wrong, which is, you know, almost is inevitably the case in fintech companies. If there's some, you know, regulatory issue or a balance sheet issue you want to have to get back to that word, you want to have the conviction to be great partners at that time. And I think a lot of the worst behavior we see from investors is where they came into something quickly and they didn't really understand it. And we really work hard not to be those investors, but it's hard to do on a three day timeline on zoom. So we're working on it, adjusting, and trying to do a lot of things to figure out how to be on the front foot rather than the back foot.

AI assessment note: “A hundred percent. I think that's the biggest challenge for us.”

Q Well, I do want to touch on that because attribution is so cool to a lot of how LPs think, and obviously LPs love it. Most venture firms do actually have pretty clear and granular attribution. Given that you don't, like, going a little bit deeper, why do you not, and what are the benefits of not having attribution?

A Yeah, it's just always seemed right to us for Rivet not to have attribution. Like, deals almost always have advocates. This is what I'm saying. Like, in fact, we sort of have this loose rule that if someone's not pounding the table, there's no point in considering an opportunity. A little different than the follow-ons where we have to consider it, or, you know, we have to think about it. But we never label something Nick's deal or Nikolai's deal or Ray's deal. The biggest reason is we just think it's more fun to live and die as a team. And once we've decided to do a deal, there's no credit claiming or finger pointing. And it does get rid of a lot of the pathologies of venture. It's It just becomes a ribbit deal. You know, from an investment perspective, we try to depersonalize it. Like it can be easier. And this is what I was alluding to before. Like it can be easier to bring the wrong biases when it's a deal attached to a person. Like we need brutal honesty as a firm and a kind of no holds barred kind of debates, but you might think about supporting the person behind the deal, which is a nice sentiment, but it's not very productive when something's going in the portfolio. Like our promise to founders, the way we structure is that everyone on the team is available to them. This all rings a lot truer. Internally and externally, like if everyone feels like they're contributing to…

AI assessment note: “The biggest reason is we just think it's more fun to live and die as a team.”

Q So like, we just pile on. And I'm like, is that a concern for you? Because now you do have the brand of success, bluntly, in FinTech, where bluntly, people just want to give your companies money because you're it. Is that a concern for you? And how do you advise founders on taking those preemptive rounds and taking that cash that is coming very aggressively and sooner than planned?

A I think it's really hard, Harry. You know, mostly what we encourage founders to do is keep their head down and focused on the business. You know, it's rarely the case that more money will make the business successful. It's never the case that more money will, you know, patch over a lack of interest from customers or a lack of execution by your team. So there are thousands of ways you can die as a startup. Having more money is one of them, but there are lots of others too. It always sounds like self-serving advice when you're coming in as an investor and around, I'm sure you've had this conversation many times around encouraging founders not to get too far ahead of the company on valuation, but it's a little easier once you're already a partner. Like with anything else, try to give founders our perspective and share some examples and then let them make their own decision. You know, the one thing I would point out, since I think it's bad to look a gift horse in the mouth, is that we could, you know, view all this capital as a bad thing through a competitive lens, but I actually think it, it can bend the curve on returns for some types of businesses. Like when your competition, like it does in fintech, comes from incumbents with huge balance sheet and regulatory advantages, having more capital can increase your chances of Success in a material way. Like, I don't think this is true…

AI assessment note: “mostly what we encourage founders to do is keep their head down”

Q you, Nick, when you have those moments where it's like, how much do you need? And it's, you know, a billion, half a billion, or I don't know, not obviously Robinhood, but another company where it's like, we're going to lose our regulatory authority. How do you deal with them? Are you level-headed? Are you quite frantic? What do you do? And how do you digest these oh shit moments?

A I was talking earlier about the value of being thesis driven. You know, another way of saying this is sort of pointing out that you want to pre-negotiate the ideas in your mind. When we underwrite an investment, we work really hard to imagine these types of scenarios. And often, like, you live through them in small ways with these companies or with other companies across the portfolio. That's what it felt like with Robin. Like, we'd been to this movie before. So I think when you've done that, you don't overreact even in a frightening situation. You feel like, You know, we understand this business, we've done the work, and let's be steadfast and the right kind of partners, not the kind of partners who, you know, suddenly try to reexamine everything that they know to be true. I think there's a lot of things actually about being a sector-focused fund that are a disadvantage that people think are an advantage, like expertise that we talked about earlier, because, you know, you can become way too full of your own ideas, and you miss that the best companies are, you know, often have some very core, simple insight. But one of the advantages of being a sector-focused fund or a focus firm in general is you can You know, really underwrite and get to know companies and a theme. And I think that can make you steadier as an investor over a long period of time.

AI assessment note: “when you've done that, you don't overreact even in a frightening situation.”

Q you think about ownership, often a lot of funds, you know, certainly of your size, have very specific ownership requirements. How do you think about ownership requirements on entry? And then how possible do you think it is to build ownership over time? Often I find with the best companies, they get taken away by the best, and you never see them again. How do you think about those two?

A Ownership definitely matters to me. That's like almost a immutable law, but I think this is one of the tricky dichotomies of the business. And there are a bunch that you can never quite reconcile. There's this F Scott Fitzgerald quote that I remember maybe from college that like the test of a true first rate intelligence is the ability to hold two ideas in your head at the same time and still retain the ability to function. And that's what I think about on this topic all the time. So here's my two opposing ideas that, you know, seem hard to reconcile. Like first, Ownership really matters. Mostly because we're all limited by the time we can allocate. And at Ribbit, we really believe in making concentrated, focused investments and putting our money where our mouth is. But second, at the same time, I think investing in the best companies should be the tail that wags the dog. You know, you certainly shouldn't back a weaker company because you think you can own a few more percent of it. So the thought experiment for me goes like this. Like if the best founders only want to sell you X percent of their company and X is lower than your ideal, you kind of have three choices. One, you don't back the founders. Two, you just shut down your business. Or three, you try to find ways to align your desire to own more with their objective to make the business successful. So we start with who we …

AI assessment note: “try to find ways to align your desire to own more with their objective”

Q Tell me, what do you know now that you wish you'd known at the start of your career in venture?

A Oh, there's a lot. I'll give you a two. You know, 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 and 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, like 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, if I was giving myself advice, I'd just say buy more Bitcoin.

AI assessment note: “in the early days, I thought I needed to have an opinion on everything.”

Q you think about ownership, often a lot of funds, you know, certainly of your size, have very specific ownership requirements. How do you think about ownership requirements on entry? And then how possible do you think it is to build ownership over time? Often I find with the best companies, they get taken away by the best, and you never see them again. How do you think about those two?

A Ownership definitely matters to me. That's like almost a immutable law, but I think this is one of the tricky dichotomies of the business. And there are a bunch that you can never quite reconcile. There's this F Scott Fitzgerald quote that I remember maybe from college that like the test of a true first rate intelligence is the ability to hold two ideas in your head at the same time and still retain the ability to function. And that's what I think about on this topic all the time. So here's my two opposing ideas that, you know, seem hard to reconcile. Like first, Ownership really matters. Mostly because we're all limited by the time we can allocate. And at Ribbit, we really believe in making concentrated, focused investments and putting our money where our mouth is. But second, at the same time, I think investing in the best companies should be the tail that wags the dog. You know, you certainly shouldn't back a weaker company because you think you can own a few more percent of it. So the thought experiment for me goes like this. Like if the best founders only want to sell you X percent of their company and X is lower than your ideal, you kind of have three choices. One, you don't back the founders. Two, you just shut down your business. Or three, you try to find ways to align your desire to own more with their objective to make the business successful. So we start with who we …

AI assessment note: “try to find ways to align your desire to own more with their objective”

Q I do want to ask on the reinvestment decision-making side, how do you process that? What does that structure look like? I mean, I know a lot of funds have the automatic pro rata that they kind of guarantee. How do you feel about that? And then also how do you structure your reinvestment decision-making process?

A You know, I think if I were to criticize it, we, you know, arguably we spend too much time on it, but our principle from the beginning is we re-underwrite every deal, including follow-on decisions. In follow-on decisions, we certainly take into account The importance of the relationship and the fact that we've been, that it's our default posture to be supportive of companies. And then going back to what I was sort of alluding to before, Harry, I think if a follow on decision happens within a short period of time, and you're struggling with it, a lot of times it's because you haven't done the right work up front. So I always think like, try to do the right work up front so that we can be supportive of the company over time. And then you take everything on a case by case basis. So what we do is We assign, you know, a few people on the team, and we do the same sort of underwriting, maybe it takes us a little bit less time, that we would have done in any other scenario, and we try to let that guide us in terms of what to do.

AI assessment note: “our principle from the beginning is we re-underwrite every deal, including follow-on decisions.”

Q with founders at the earliest and earliest of stages, when you think about the decentralization of entrepreneurship, You have to be the first thought for fintech founders in LATAM or in New Zealand, you name it. How do you think about Ribbit's brand? Cause you've done so well despite not being out there. How do you think about that? And do you think it will change as you move forward?

A This is something that Mickey and I discussed probably in our very first meeting together. It aligns with my personality and with what I believe, but I really kind of like learned the value of it from Mickey, which is, you know, just being comfortable letting the work speak for itself. We've always believed that the brands that, that matter the most are the ones that we back and have thought that like, if we do our job well, the word should get out about rivet. And that there are a lot of people that were out there shouting with megaphones, you know, much, much bigger megaphones than our own. Some who are doing it incredibly well with great star power and teams of people that we shouldn't try to play that game. We should try to do something that felt more authentic to us. You know, I think that's like a subset of a broader thing, which is, you know, I've seen from Mickey's like really good at framing what success looks like and not getting caught up in the noise. And we've tried to carry that, you know, on at Ribbit, like for example, early on at Ribbit, we said, you know, what if one of our core KPIs was how many of our founders would actually invest their own money in Ribbit? You know, after working with us, that's been a great guiding light today. A significant majority of the founders, we've backed our investors in Ribbit, which means a lot to us. And it's always a good way…

AI assessment note: “just being comfortable letting the work speak for itself.”

Q You mentioned the kind of Swiss Army Knife team and the expansion of the team, and this one was actually from Frank Rotman at QED, but he said, you know, you've had the most incredible journey professionalizing from small early stage specialist to now stage agnostic powerhouse, bluntly, and he asked, what were the biggest challenges in making the transition and the professionalization of the firm as you have done?

A You know, I'll take anything from Frank. You know him and Nigel and QED, and they're just actually awesome. To be honest, I don't think we've changed the core parts of Ribbit. We always defined ourselves by our thesis and by wanting to work with the best people who are changing finance, not really by a particular stage or kind of deal. You know, just for example, in the first fund, we had early companies and mature companies across several geos. We had fun surprises like Bitcoin, and that same thing is true in the current fund. Like, we love to invest as early as we can. Ownership matters. Be thesis driven, you know, rather than reactive and do it with a scrappy team with a lot of data and not much process. And all that has stayed very consistent. You know, that said, what's definitely changed is the market. Like fintech's gone from being this sort of ignored backwater to one of the hottest sectors in tech. Last year, you probably know this, but you know, you've heard some of these stats, like PayPal became more valuable than Bank of America and Square became more valuable than Goldman. And the speed of that happening has shocked even us. Like if you take the top seven, eight fintechs and the top seven, eight banks last year, Something like eight hundred billion dollars in market cap swap hands between them. You know, at the same time, the number of companies identifying as fin…

AI assessment note: “To be honest, I don't think we've changed the core parts of Ribbit.”

Q with founders at the earliest and earliest of stages, when you think about the decentralization of entrepreneurship, You have to be the first thought for fintech founders in LATAM or in New Zealand, you name it. How do you think about Ribbit's brand? Cause you've done so well despite not being out there. How do you think about that? And do you think it will change as you move forward?

A This is something that Mickey and I discussed probably in our very first meeting together. It aligns with my personality and with what I believe, but I really kind of like learned the value of it from Mickey, which is, you know, just being comfortable letting the work speak for itself. We've always believed that the brands that, that matter the most are the ones that we back and have thought that like, if we do our job well, the word should get out about rivet. And that there are a lot of people that were out there shouting with megaphones, you know, much, much bigger megaphones than our own. Some who are doing it incredibly well with great star power and teams of people that we shouldn't try to play that game. We should try to do something that felt more authentic to us. You know, I think that's like a subset of a broader thing, which is, you know, I've seen from Mickey's like really good at framing what success looks like and not getting caught up in the noise. And we've tried to carry that, you know, on at Ribbit, like for example, early on at Ribbit, we said, you know, what if one of our core KPIs was how many of our founders would actually invest their own money in Ribbit? You know, after working with us, that's been a great guiding light today. A significant majority of the founders, we've backed our investors in Ribbit, which means a lot to us. And it's always a good way…

AI assessment note: “just being comfortable letting the work speak for itself”

Q you, Nick, when you have those moments where it's like, how much do you need? And it's, you know, a billion, half a billion, or I don't know, not obviously Robinhood, but another company where it's like, we're going to lose our regulatory authority. How do you deal with them? Are you level-headed? Are you quite frantic? What do you do? And how do you digest these oh shit moments?

A I was talking earlier about the value of being thesis driven. You know, another way of saying this is sort of pointing out that you want to pre-negotiate the ideas in your mind. When we underwrite an investment, we work really hard to imagine these types of scenarios. And often, like, you live through them in small ways with these companies or with other companies across the portfolio. That's what it felt like with Robin. Like, we'd been to this movie before. So I think when you've done that, you don't overreact even in a frightening situation. You feel like, You know, we understand this business, we've done the work, and let's be steadfast and the right kind of partners, not the kind of partners who, you know, suddenly try to reexamine everything that they know to be true. I think there's a lot of things actually about being a sector-focused fund that are a disadvantage that people think are an advantage, like expertise that we talked about earlier, because, you know, you can become way too full of your own ideas, and you miss that the best companies are, you know, often have some very core, simple insight. But one of the advantages of being a sector-focused fund or a focus firm in general is you can You know, really underwrite and get to know companies and a theme. And I think that can make you steadier as an investor over a long period of time.

AI assessment note: “when you've done that, you don't overreact even in a frightening situation.”

Q You mentioned the kind of Swiss Army Knife team and the expansion of the team, and this one was actually from Frank Rotman at QED, but he said, you know, you've had the most incredible journey professionalizing from small early stage specialist to now stage agnostic powerhouse, bluntly, and he asked, what were the biggest challenges in making the transition and the professionalization of the firm as you have done?

A You know, I'll take anything from Frank. You know him and Nigel and QED, and they're just actually awesome. To be honest, I don't think we've changed the core parts of Ribbit. We always defined ourselves by our thesis and by wanting to work with the best people who are changing finance, not really by a particular stage or kind of deal. You know, just for example, in the first fund, we had early companies and mature companies across several geos. We had fun surprises like Bitcoin, and that same thing is true in the current fund. Like, we love to invest as early as we can. Ownership matters. Be thesis driven, you know, rather than reactive and do it with a scrappy team with a lot of data and not much process. And all that has stayed very consistent. You know, that said, what's definitely changed is the market. Like fintech's gone from being this sort of ignored backwater to one of the hottest sectors in tech. Last year, you probably know this, but you know, you've heard some of these stats, like PayPal became more valuable than Bank of America and Square became more valuable than Goldman. And the speed of that happening has shocked even us. Like if you take the top seven, eight fintechs and the top seven, eight banks last year, Something like eight hundred billion dollars in market cap swap hands between them. You know, at the same time, the number of companies identifying as fin…

AI assessment note: “I don't think we've changed the core parts of Ribbit.”