The Exchanges

Q I'll do a race with you, for sure. You'll put me to shame. But yeah, tell me, final one, what's the most recent investment, and why did you say yes and get so excited?

A There are two that we've just done now. One is investment in Bitso, which we announced a few days ago. I've been a crypto denier. I don't get it. I can't predict if it's going to go up or down. But what I do know is crypto is a thing, and people want it. They want to store it. They want to trade it. They want to borrow against it, margin lending. I need it in my portfolio to hit my efficient frontier. And I want to be able to move it across border. So what we've done with Daniel Vogel at Bitso is that we're going to really lean in and help you build out traditional, if you like, banking products around this new asset class called Bitso. And a lot of what I'm doing working with him is how to scale his business and helping him do that. For me, it's loads of learning about an asset class that I haven't really grown up with and using, leveraging things that I have done for many, many years. The second thing that we just announced recently is a startup A platform, an accelerator, if you like, in Mexico City called Fontes, which is Spanish for fountain. We see in Mexico lots and lots of talent, but we don't see the accelerators in Mexico, so we're going to put that together, and we've raised money from LPs, some of which we've mentioned already today in the conversation, and we're going to help start things out of the ground in Mexico.

AI assessment note: “There are two that we've just done now. One is investment in Bitso”

Q Which other VCs do you think are doing really great things in fintech that you're super impressed by?

A Well, I love all of the boutique fintech venture firms, so Mickey Malkert, Ribbit's a dear friend, Matt Harris again at Bain, uh, Hans Morris at Nica, I've known for 30 years, and then the mainstream, you know, the really great generalists, Sequoia, Andreessen, Accel, Benchmark, I see them all doing really good work. As fintech has become a thing, And not just a fad, we're seeing the mainstream firms really invest in that, and although they may not have come out of operating routes and know financial services in the way that somebody like QED or Ribbit would know, what they bring is enormous other assets to the table in terms of scale and brand and reach and lots of other things.

AI assessment note: “Sequoia, Andreessen, Accel, Benchmark, I see them all doing really good work.”

Q though, on a topic that we chatted a little bit about before the show, and it's something that I'm obviously very passionate about, given I always kind of semi-joke and say there's very few addictions or problems that I haven't embraced personally fully. So I do want to start on the theme of mental health. Where does your passion for mental health come from, if you don't mind me asking?

A I do want to say this, Harry, that the fact that you're willing to bring it up So disarmingly, and talk about it so openly, I think is massively refreshing, and really, really important. Where does it come from? Look, I have a younger brother who has struggled with drug and alcohol addiction for 30 years. I've seen him go up, and I've seen him go down, and I've been there at the nadir and the depths of what alcoholism could do, and how it can shred your relationships, how it can shred everything in your life, and how it's just so destructive. I've watched him try and, you know, climb up the twelve-step ladder I've helped him go into various establishments and get stable. He's now been clean for 15 years. But he talks incredibly openly and disarmingly about his own journey and how hard it's been. So I have that part of my life. And just a point here, I think many of us have either had our own flirtations with various forms of difficulty in the workplace, or know people that have. And we tend to bury it. We tend to not talk about it. And I say all the time that if I have a sore arm or sore shoulder, I'll come into work, and I'll whinge about it, and I do whinge about things like that, but if I couldn't sleep last night and ambient, or I'm paranoid about going outside, or I've been taking substances I shouldn't take, I won't talk about it. I'll say that I'm going to my doctor to g…

AI assessment note: “I have a younger brother who has struggled with drug and alcohol addiction for 30 years.”

Q a realization that I had recently, which is like, when am I happiest? And I'm happiest when I'm having brunch with my mother and brother on a Sunday morning and And that's it, like, it's probably 20 bucks, but that's my happiest moment, and so when you think about your relationship to money, how do you think about that today, and how has that changed over time with increasing wealth?

A So look, you know, a working class grammar school boy, Welsh parents, growing up in a household where everybody read the Daily Mail, and I don't think there was a book in sight. I've been incredibly lucky in that I've been able to create Escape Velocity economically for myself and my family, and in the early days, it was about Just having enough money to be able to travel a little bit, and not to worry about money. The basic Maslovian stuff of feeding the family. And then it was getting to FU money. Whatever that is. And we can debate what that is. Maybe it's 15, maybe it's twenty million bucks. And I think once you cross that threshold, it doesn't matter anymore. Whether or not my latest investment, and we just invest in Bitso, for example, in Mexico City. I love that business, and I think it's going to be a rocket ship. But candidly, whether or not it does brilliantly, or does well, is not going to change my life. At this point. So the relationship with money has changed substantially through time. I don't get my nourishment from more zeros at this point. I get my nourishment from palpable, genuine relationships that I build on route, where I can help people half my age, twice as smart, that haven't been through the slings and arrows of misfortunes and mistakes like I have, helping them navigate that, being a coach, being a steward, being a support, being an encourager. Those…

AI assessment note: “So the relationship with money has changed substantially through time.”

Q Which other VCs do you think are doing really great things in fintech that you're super impressed by?

A Well, I love all of the boutique fintech venture firms, so Mickey Malkert, Ribbit's a dear friend, Matt Harris again at Bain, uh, Hans Morris at Nica, I've known for 30 years, and then the mainstream, you know, the really great generalists, Sequoia, Andreessen, Accel, Benchmark, I see them all doing really good work. As fintech has become a thing, And not just a fad, we're seeing the mainstream firms really invest in that, and although they may not have come out of operating routes and know financial services in the way that somebody like QED or Ribbit would know, what they bring is enormous other assets to the table in terms of scale and brand and reach and lots of other things.

AI assessment note: “Mickey Malkert, Ribbit's a dear friend, Matt Harris again at Bain”

Q I ask, you mentioned unit economics there, and I'm intrigued to hear your thoughts on this, because especially when investing so early, it's just so pie in the sky. Like, who knows what the count will be? Who knows what the term will be? And how do we fully grapple with unit economics? How do you think about the centrality of unit econ when we are often investing so early?

A Yeah, I mean, somewhere between C and A, you start to get some serious data. What does it cost me to acquire a customer? What do I think the LTV is? What do I believe the payback period will be? But, you know, in the Capital One days, Harry, the ultimate litmus test, the decision-making algorithm, was all around unit economics. And in the end, successive cohorts at the individual level in unit economics add up to the P&L of the company. And we joined those two phenomenon up. So for us, it is sine qua non that you focus on the unit economics. Now, and with each passing day, each passing week, you get more data and you get more clarity. Because we've made a 150 investments now over 14 years, we actually have a good sense of, here's one data point, now we can extrapolate from that. If it's like this, it'll do this. If it's like that, it'll do that. And we can go on that learning loop really fast, really quickly, do lots of A-B testing so that we can actually test the limits. And we can get a sense of the unit economics very quickly. Now, we have seen fintech companies that have eschewed the whole notion of unit economics. Hey, what does it matter? I've got a net promoter score that's off the scale. I can book customers for five bucks. I have no idea what the attrition rate's going to be, and you know what? I'm going to figure out how to make money down the road. Now, that sort of …

AI assessment note: “for us, it is sine qua non that you focus on the unit economics.”

Q out, though, and we think about, you know, From funding to exit, it was actually Matt at Bain who asked this, and it's like, exit timing is so crucial. How do you, from your many years doing this, both on the operator and now the investor side, how do you think about exit timing and decide what to do with each company in terms of exit opportunities that always come?

A To me, a lot of it is about how the company's doing and what the team wants to do. When a team comes to you and says, we want out, we want to take our chips off the table, we want to get our FU money, we And we have an option to exit, and we've had a number of these quite recently. It's very hard to say, no, no, you shouldn't do it, because that's really crucial. There's a time when you see the exponential growth starting to decay, and you see that the opportunities are less than they were, and we saw that at Capital One during my era. We had gone from credit cards to installment loans to home equities to deposits to mortgages, and we'd done it in the US, the UK, Canada, Italy, France, Spain, South Africa, and, you know, you could see that we'd Spread our wings widely, and everything was working, but that couldn't go on ad infinitum, and I think there's a time when you see the growth rate slowing, and you see the market being very supportive of the business model, and you say, look, this might be the time to move on. Now, how do you move on? No way of moving on is perfect. Do you sell to private equity? And you know what? That changes the culture, and there's some good private equity firms, and the ones that aren't so good. How do you figure that out? How do you bring in later stage investors? Should you IPO? Lots of conversations going on now with the IPO market being wide ope…

AI assessment note: “a lot of it is about how the company's doing and what the team wants to do”

Q a realization that I had recently, which is like, when am I happiest? And I'm happiest when I'm having brunch with my mother and brother on a Sunday morning and And that's it, like, it's probably 20 bucks, but that's my happiest moment, and so when you think about your relationship to money, how do you think about that today, and how has that changed over time with increasing wealth?

A So look, you know, a working class grammar school boy, Welsh parents, growing up in a household where everybody read the Daily Mail, and I don't think there was a book in sight. I've been incredibly lucky in that I've been able to create Escape Velocity economically for myself and my family, and in the early days, it was about Just having enough money to be able to travel a little bit, and not to worry about money. The basic Maslovian stuff of feeding the family. And then it was getting to FU money. Whatever that is. And we can debate what that is. Maybe it's 15, maybe it's twenty million bucks. And I think once you cross that threshold, it doesn't matter anymore. Whether or not my latest investment, and we just invest in Bitso, for example, in Mexico City. I love that business, and I think it's going to be a rocket ship. But candidly, whether or not it does brilliantly, or does well, is not going to change my life. At this point. So the relationship with money has changed substantially through time. I don't get my nourishment from more zeros at this point. I get my nourishment from palpable, genuine relationships that I build on route, where I can help people half my age, twice as smart, that haven't been through the slings and arrows of misfortunes and mistakes like I have, helping them navigate that, being a coach, being a steward, being a support, being an encourager. Those…

AI assessment note: “So the relationship with money has changed substantially through time.”

Q When was that mindset shift for you, though, in terms of going from, you know, efficient, well-functioning kind of family office operating vehicle to, actually, we're going to scale AUM and really build an institution with QED?

A I call it the Rubicon crossing event, and it's exactly as you frame it, because It would have been, in some ways, relatively comfortable to have that little family office with people I've known and loved for years, and do some investing, and not build another thing of any scale. But there were three criteria in my mind. One was, are we any good at it? Are we good investors? Now, my sense was I was a half-decent strategy consultant, and I had a really good run at Capital One, but this is a different game, investing, and are we any good at it? That was one. Two, do the portfolio companies that we work with want to work with us? I always say to my team, look, I much prefer to get four X and be loved and respected than five X and be despised and feel like we took advantage. Two is, you know, do they want to work with us? Do the skills and the approaches that we have resonate and work? And then three, do we like it? Do we enjoy it? You know, at that time in life, I had the luxury of, you know, focusing on doing what I want to do. So I started to tick those boxes and the size of the opportunity was becoming enormous. The wind was roaring at our back. We were seeing digitalization start to emerge. We're now six, seven years ago, and the opportunity to embrace that was bigger than I could fund personally with Frank and Caribou. And then we found that there were lots of other refugees f…

AI assessment note: “We're now six, seven years ago, and the opportunity to embrace that was bigger”

Q take in five hundred million too, but then we've just got to say, hey, let's make hay while it shines. Fuck it, bluntly. We're just going to see what happens with these numbers. How do you advise founders when their competitors are taking in a ton of money, and either they don't, and they get left behind, or they do, but then they have to make hay while sun shines?

A There's a thing called the just world hypothesis, and in the end, unit economics drive P&Ls. And if your business is built on a house of cards, and your unit economics don't make any sense, in the end, your business will not succeed. And that competitor, albeit them terrifically funded, albeit them getting on all kinds of lists of being unicorns, etc., in the end, they will fall apart. In the end, the talent pool there will go away. So it's a short-run, long-run phenomenon would be my first comment. The second thing is, when a competitor who might not be as vigilant in terms of You know, economics is funded so aggressively. It's for you to raise your game. Now, you still have to stay true to your north star, but you have to figure out how to compete with that, and you have to figure out how to make sure you get better customers that have better LTVs, that have better revenue, because that's not what they're focused on. They're focused on brand building and just getting a number of customers to shout about to their LPs, perhaps. So you have to, in the jujitsu of this, recognize that you stay focused on true north, and at the same time, you beat them at their own game. Now, That means that you have to look for ways to segment. This customer is better than that customer. Is it based on geography? Is it based on demography? Is it based on FICO score? Is it based on history? Is it, …

AI assessment note: “when a competitor who might not be as vigilant in terms of economics is funded so aggressively”

Q When was that mindset shift for you, though, in terms of going from, you know, efficient, well-functioning kind of family office operating vehicle to, actually, we're going to scale AUM and really build an institution with QED?

A I call it the Rubicon crossing event, and it's exactly as you frame it, because It would have been, in some ways, relatively comfortable to have that little family office with people I've known and loved for years, and do some investing, and not build another thing of any scale. But there were three criteria in my mind. One was, are we any good at it? Are we good investors? Now, my sense was I was a half-decent strategy consultant, and I had a really good run at Capital One, but this is a different game, investing, and are we any good at it? That was one. Two, do the portfolio companies that we work with want to work with us? I always say to my team, look, I much prefer to get four X and be loved and respected than five X and be despised and feel like we took advantage. Two is, you know, do they want to work with us? Do the skills and the approaches that we have resonate and work? And then three, do we like it? Do we enjoy it? You know, at that time in life, I had the luxury of, you know, focusing on doing what I want to do. So I started to tick those boxes and the size of the opportunity was becoming enormous. The wind was roaring at our back. We were seeing digitalization start to emerge. We're now six, seven years ago, and the opportunity to embrace that was bigger than I could fund personally with Frank and Caribou. And then we found that there were lots of other refugees f…

AI assessment note: “We're now six, seven years ago, and the opportunity to embrace that was bigger”

Q you is, like, with the energy and with the competitive nature, do you ever... Sit back and think, actually, just a little bit. We've done really well here, and I should be appreciative of, like, this great moment that we have, and, like, bank the wins, because shit will come. Do you ever just bank the wins and appreciate what you have a little bit? That's something I struggle with.

A Oh man, I do too. Look, I've been saying to my team the last few months, look, we've got this enormous growth in value in the portfolio from investments we've made in the past, and one of the things I learned very much was, look, it's never as good as you think it is, and it's never as bad as you think it is in the worst times. So get some balance. Get some perspective. When you're climbing up the ladder, don't keep looking up. Look around you and enjoy the view. This is a great time to be in venture. The wind is roaring at our back. FinTech is winning. Digitalization is coming at us like a train. We as QED have positive selection, and deals are coming our way, and things are working out. Enjoy it, because you know what? Six months from now, it might not be this way. But I am not very good at celebrating the gains on the way, and I try very hard to make sure that I Get the time to do that, but yeah, I think it's a, it's a challenge.

AI assessment note: “Oh man, I do too... I am not very good at celebrating the gains”

Q I ask, you mentioned unit economics there, and I'm intrigued to hear your thoughts on this, because especially when investing so early, it's just so pie in the sky. Like, who knows what the count will be? Who knows what the term will be? And how do we fully grapple with unit economics? How do you think about the centrality of unit econ when we are often investing so early?

A Yeah, I mean, somewhere between C and A, you start to get some serious data. What does it cost me to acquire a customer? What do I think the LTV is? What do I believe the payback period will be? But, you know, in the Capital One days, Harry, the ultimate litmus test, the decision-making algorithm, was all around unit economics. And in the end, successive cohorts at the individual level in unit economics add up to the P&L of the company. And we joined those two phenomenon up. So for us, it is sine qua non that you focus on the unit economics. Now, and with each passing day, each passing week, you get more data and you get more clarity. Because we've made a 150 investments now over 14 years, we actually have a good sense of, here's one data point, now we can extrapolate from that. If it's like this, it'll do this. If it's like that, it'll do that. And we can go on that learning loop really fast, really quickly, do lots of A-B testing so that we can actually test the limits. And we can get a sense of the unit economics very quickly. Now, we have seen fintech companies that have eschewed the whole notion of unit economics. Hey, what does it matter? I've got a net promoter score that's off the scale. I can book customers for five bucks. I have no idea what the attrition rate's going to be, and you know what? I'm going to figure out how to make money down the road. Now, that sort of …

AI assessment note: “for us, it is sine qua non that you focus on the unit economics.”

Q out, though, and we think about, you know, From funding to exit, it was actually Matt at Bain who asked this, and it's like, exit timing is so crucial. How do you, from your many years doing this, both on the operator and now the investor side, how do you think about exit timing and decide what to do with each company in terms of exit opportunities that always come?

A To me, a lot of it is about how the company's doing and what the team wants to do. When a team comes to you and says, we want out, we want to take our chips off the table, we want to get our FU money, we And we have an option to exit, and we've had a number of these quite recently. It's very hard to say, no, no, you shouldn't do it, because that's really crucial. There's a time when you see the exponential growth starting to decay, and you see that the opportunities are less than they were, and we saw that at Capital One during my era. We had gone from credit cards to installment loans to home equities to deposits to mortgages, and we'd done it in the US, the UK, Canada, Italy, France, Spain, South Africa, and, you know, you could see that we'd Spread our wings widely, and everything was working, but that couldn't go on ad infinitum, and I think there's a time when you see the growth rate slowing, and you see the market being very supportive of the business model, and you say, look, this might be the time to move on. Now, how do you move on? No way of moving on is perfect. Do you sell to private equity? And you know what? That changes the culture, and there's some good private equity firms, and the ones that aren't so good. How do you figure that out? How do you bring in later stage investors? Should you IPO? Lots of conversations going on now with the IPO market being wide ope…

AI assessment note: “a lot of it is about how the company's doing and what the team wants”

Q be a venture? Because what I worry about is, like, with the proliferation of capital, with pricing being where it is, with competition being where it is, like, I think we're going to see VC returns denigrate to more PE-style returns, and I'm actually looking at the asset class going, wow, actually, these are some challenging times ahead. How do you see that? Am I just inherently old and negative?

A I've, uh, sort of equated what's going on now in some ways to the Weimar Republic, Of Germany in the twenties, in that you've got people running around with wheelbarrows full of money trying to buy a loaf of bread. Yeah, there's a lot of money out there, and some of it is not incredibly discerning about where it puts the money, and valuations have gone up dramatically. That's absolutely true. You know, for us, it's staying focused on the basics of this business. Do the unit economics make sense? Are we solving a real customer problem? Can this technology and this team really scale? Can they sell the story? Can they attract The talent they need to build the business. But I've had the luxury, Harry, of being a strategy consultant in banking, being a banker, you know, in a public company, and now as a venture, and I have three unique purchase. So I see how challenged the banks are in being able to meet the needs of a digitalizing economy, and how difficult is it for them to compete with the burgeoning fintechs. So I believe, actually, there's a huge amount of open field running to come. Now, does that mean that all venture firms will succeed? I don't think so. There's a lot that don't really have a lot that they bring to the table, per se. And we are specialists. We are very deep in what we do. That doesn't mean that we're always going to be successful, but our unique perch allows…

AI assessment note: “So I believe, actually, there's a huge amount of open field running to come.”

Q take in five hundred million too, but then we've just got to say, hey, let's make hay while it shines. Fuck it, bluntly. We're just going to see what happens with these numbers. How do you advise founders when their competitors are taking in a ton of money, and either they don't, and they get left behind, or they do, but then they have to make hay while sun shines?

A There's a thing called the just world hypothesis, and in the end, unit economics drive P&Ls. And if your business is built on a house of cards, and your unit economics don't make any sense, in the end, your business will not succeed. And that competitor, albeit them terrifically funded, albeit them getting on all kinds of lists of being unicorns, etc., in the end, they will fall apart. In the end, the talent pool there will go away. So it's a short-run, long-run phenomenon would be my first comment. The second thing is, when a competitor who might not be as vigilant in terms of You know, economics is funded so aggressively. It's for you to raise your game. Now, you still have to stay true to your north star, but you have to figure out how to compete with that, and you have to figure out how to make sure you get better customers that have better LTVs, that have better revenue, because that's not what they're focused on. They're focused on brand building and just getting a number of customers to shout about to their LPs, perhaps. So you have to, in the jujitsu of this, recognize that you stay focused on true north, and at the same time, you beat them at their own game. Now, That means that you have to look for ways to segment. This customer is better than that customer. Is it based on geography? Is it based on demography? Is it based on FICO score? Is it based on history? Is it, …

AI assessment note: “when a competitor... is funded so aggressively. It's for you to raise your game.”

Q I mean, that is very, very touching for me to hear, but I do want to start with a little context. So obviously, that was the incredible Capital One journey, and now the incredibly exciting newer chapter with Tell me, how did you make your transition from the days of operations and founding companies to the transition to the world of venture with QED?

A Well, look, if I ever write the book on QED, Harry, I'll make out that it was very thoughtful, and I had laid out a strategic plan, and then I flawlessly executed against it. But look, it's been a journey of me putting one foot in front of another and figuring it out day by day. But look, you know, the Capital One experience was absolutely amazing. I wouldn't change it for the world. I got to work with Rich Fairbank, who's one of the most special human beings on the planet, and we had amazing run. Out of Signet Bank, this wonderful old traditional regional bank in Richmond, we built this credit card juggernaut, and I had 10 years running a public company with Rich that was just incredibly special. We grew amazingly. We went from a market cap of a billion to ten billion. We grew our earnings at 25%. We became, you know, a great place to work. We developed the What's in Your Wallet brand. And it was really amazing, but I started to wake up in my late, middle, late forties and started to say, gosh, this is slowing down. My intellectual curiosity is not being peaked as much. I'm not sure if this is going to be what I want to do in the long run. And, you know, people came to me and said, Nigel, look, this is what happens when you get to the last third of your business career. You know, have you thought about getting that really nice red sports car? Because it's all part of life. But…

AI assessment note: “it's been a journey of me putting one foot in front of another”

Q be a venture? Because what I worry about is, like, with the proliferation of capital, with pricing being where it is, with competition being where it is, like, I think we're going to see VC returns denigrate to more PE-style returns, and I'm actually looking at the asset class going, wow, actually, these are some challenging times ahead. How do you see that? Am I just inherently old and negative?

A I've, uh, sort of equated what's going on now in some ways to the Weimar Republic, Of Germany in the twenties, in that you've got people running around with wheelbarrows full of money trying to buy a loaf of bread. Yeah, there's a lot of money out there, and some of it is not incredibly discerning about where it puts the money, and valuations have gone up dramatically. That's absolutely true. You know, for us, it's staying focused on the basics of this business. Do the unit economics make sense? Are we solving a real customer problem? Can this technology and this team really scale? Can they sell the story? Can they attract The talent they need to build the business. But I've had the luxury, Harry, of being a strategy consultant in banking, being a banker, you know, in a public company, and now as a venture, and I have three unique purchase. So I see how challenged the banks are in being able to meet the needs of a digitalizing economy, and how difficult is it for them to compete with the burgeoning fintechs. So I believe, actually, there's a huge amount of open field running to come. Now, does that mean that all venture firms will succeed? I don't think so. There's a lot that don't really have a lot that they bring to the table, per se. And we are specialists. We are very deep in what we do. That doesn't mean that we're always going to be successful, but our unique perch allows…

AI assessment note: “I believe, actually, there's a huge amount of open field running to come.”

Q when they said about weaknesses, they said the thing with Nigel is he's so bought in, and he is so impassioned and involved with every project that he is in, that bluntly, when there is a time to cut, Nigel doesn't, because he's in for 90 minutes. How do you think about that? When's the time to cut with that kind of challenge of being there for the whole journey?

A I'll take that as a point of development for myself, even at these, uh, Advanced years. Yeah, and look, I think it comes out of being an operator. In the operating environment, and you've got six or 10 people working with you, you tend to spend more time with the ones that are not working. You tend to the ones who are failing. In venture, it's much easier to turn four X into five X than turn zero X into one X. Clearly mathematically the case. But this is not about stock picking. It's not about just picking the team to go onto the field. Part of the quid pro quo of that really deep relationship is Is that you are willing to engage all the way through the journey from a seed to IPO, and you can add value all the way through that period. Now, that doesn't mean that you are just passively supportive. It doesn't mean that you are wedded ad infinitum in bondage with the relationship that you had at the beginning. Many of the conversations I'm having with trusted relationships is, look, we need to sell this thing. It's not working. Growth is slowing. You can't be CEO anymore. You need to move to executive chairman, and the relationship that you have enables you to have those kinds of conversations. And Harry, they don't happen in the boardroom. They happen outside of the cadence of the board meeting. So often, the value that I'm adding, if I'm adding any at all, is not in the boardroo…

AI assessment note: “if I have a failing here is that I do not give up”

Q He said, essentially, every conversation that you leave Nigel with You feel like you're the most special person in the world, and he is the best in the world when it comes to listening and asking the right questions. If we kind of break those down, it's a weird one to ask, but like, what does listening intently mean to you, and how do you think about listening intently well?

A So many of the people that come in with pitch decks, and by the way, we're in Alexandria, Virginia, Harry, and nobody rides their bike to pitch us, so we have to do a lot more outreach. We have to build a lot more relationship. And we spend a lot of time with companies that we'll never invest in, but we're building the ecosystem, and we're being supportive to the overall environment, the agar jelly of fintech investing, and we're very happy to do that. So first of all, you've got to create the right ambience where people will have a conversation with you in a way that's meaningful, where you get incremental, nuanced signal from the conversation. So it's not like talking to a robot. You don't ask a question, what do you think your revenue is going to be in six years? They have no idea what the revenue is going to be in six years. They can't even predict what it's going to be in six months. So don't ask silly questions and set up a sense of what the nature of what the conversation is going to be, which is going to be about important things. Harry, I think it's a really interesting business. Why are you doing it? Harry, what's important to you here? If you look back on the last six months, what's gone really well and what hasn't gone well? And if you could run the clock back, what would you do differently six months ago? Who are the people that you really trust on your team? And h…

AI assessment note: “create the right ambience where people will have a conversation with you in a way that's meaningful”

Q Can I ask, do you find people are willing to open up in that way to those questions? Because I think the same, you've got to create an environment of safety, you've got to give a little bit of yourself in terms of that vulnerability.

A I messed around in a lot of psychology in my undergrad days, and there's a humanist psychologist called Sidney Girard, Canadian, and he talks about reciprocity and disclosure being really important about building trust. So he has this notion that the stranger on the train phenomenon. You're on the train, there's a stranger, and she starts telling you about her life, and her divorce, and how her children this and that, and you're going like, hold on, this feels like weird because she's disclosing too much. But you build relationships by a stair-stepping of Incremental disclosure about each other, and build rapport, and relationship, and trust around that. And I find that the people that we want to work with, and the ones who want to work with us, are willing to engage in that. QED is not about stock picking. We play the full 90 minutes. Use a soccer, football analogy there. We don't just pick the team to go on the pitch, and let them sort of manage the next 90 minutes. My team, Tottenham Hotspur, does this regularly. You're two nil up at 30 minutes, and you lose four two. It's really easy to do that. So we play the full 90 minutes, and the people who want to work with us, and it's a mutual mating process, are the ones who recognize that what they're attempting to do is really difficult. It's .9 to the power six, and they need partners and supporters along the way that can help t…

AI assessment note: “the people that we want to work with... are willing to engage in that.”

Q I mean, that is very, very touching for me to hear, but I do want to start with a little context. So obviously, that was the incredible Capital One journey, and now the incredibly exciting newer chapter with Tell me, how did you make your transition from the days of operations and founding companies to the transition to the world of venture with QED?

A Well, look, if I ever write the book on QED, Harry, I'll make out that it was very thoughtful, and I had laid out a strategic plan, and then I flawlessly executed against it. But look, it's been a journey of me putting one foot in front of another and figuring it out day by day. But look, you know, the Capital One experience was absolutely amazing. I wouldn't change it for the world. I got to work with Rich Fairbank, who's one of the most special human beings on the planet, and we had amazing run. Out of Signet Bank, this wonderful old traditional regional bank in Richmond, we built this credit card juggernaut, and I had 10 years running a public company with Rich that was just incredibly special. We grew amazingly. We went from a market cap of a billion to ten billion. We grew our earnings at 25%. We became, you know, a great place to work. We developed the What's in Your Wallet brand. And it was really amazing, but I started to wake up in my late, middle, late forties and started to say, gosh, this is slowing down. My intellectual curiosity is not being peaked as much. I'm not sure if this is going to be what I want to do in the long run. And, you know, people came to me and said, Nigel, look, this is what happens when you get to the last third of your business career. You know, have you thought about getting that really nice red sports car? Because it's all part of life. But…

AI assessment note: “it's been a journey of me putting one foot in front of another”

Q How do you think about dealing with insecurity today for you? I think a lot of people would look at you, Nigel, and go, Nigel's got everything sorted. He's done everything. He's achieved so much. He doesn't have insecurities. How do you think about dealing with your own insecurities and self-doubts?

A Yeah, look, I've been really, really blessed, and really, really lucky, and I've surrounded myself with people who are immensely more talented than me, and built great relationships with them, and I've had a really good run. But, every day I get up and say, you know, what I'm trying to do here with QED, and having the responsibility of managing, you know, now over a billion dollars under management, is not easy. And venture is much harder than running a big public company, because if I have a big public company, next year's earnings are already in the bag, largely. And if I can reduce cost by five percent, and if I can grow at 10%, then I'm going to get my bonus, and everything's fine. And you have an edifice and a cadence that's already fully up and running. Running a large company is much easier than running a smaller one. Private equity is much easier than venture. I've got numbers to look at. I can dial in what the revenue is going to be next year, up and down a few percentage, and I can manipulate that on a spreadsheet, and out comes different answers. Venture is about extracting enormous signal out of very little data. So what do I know? I've got an entrepreneur with an idea, particularly at the early stage, and how do I evaluate that? Now that means that I think it's like, it's what I call the .9 to the power six problem, and that is that when you think about all the thi…

AI assessment note: “venture is much harder than running a big public company”

Q Can I ask, do you find people are willing to open up in that way to those questions? Because I think the same, you've got to create an environment of safety, you've got to give a little bit of yourself in terms of that vulnerability.

A I messed around in a lot of psychology in my undergrad days, and there's a humanist psychologist called Sidney Girard, Canadian, and he talks about reciprocity and disclosure being really important about building trust. So he has this notion that the stranger on the train phenomenon. You're on the train, there's a stranger, and she starts telling you about her life, and her divorce, and how her children this and that, and you're going like, hold on, this feels like weird because she's disclosing too much. But you build relationships by a stair-stepping of Incremental disclosure about each other, and build rapport, and relationship, and trust around that. And I find that the people that we want to work with, and the ones who want to work with us, are willing to engage in that. QED is not about stock picking. We play the full 90 minutes. Use a soccer, football analogy there. We don't just pick the team to go on the pitch, and let them sort of manage the next 90 minutes. My team, Tottenham Hotspur, does this regularly. You're two nil up at 30 minutes, and you lose four two. It's really easy to do that. So we play the full 90 minutes, and the people who want to work with us, and it's a mutual mating process, are the ones who recognize that what they're attempting to do is really difficult. It's .9 to the power six, and they need partners and supporters along the way that can help t…

AI assessment note: “So yes, the ones that we want to work with want to work with us”

Q How do you think about dealing with insecurity today for you? I think a lot of people would look at you, Nigel, and go, Nigel's got everything sorted. He's done everything. He's achieved so much. He doesn't have insecurities. How do you think about dealing with your own insecurities and self-doubts?

A Yeah, look, I've been really, really blessed, and really, really lucky, and I've surrounded myself with people who are immensely more talented than me, and built great relationships with them, and I've had a really good run. But, every day I get up and say, you know, what I'm trying to do here with QED, and having the responsibility of managing, you know, now over a billion dollars under management, is not easy. And venture is much harder than running a big public company, because if I have a big public company, next year's earnings are already in the bag, largely. And if I can reduce cost by five percent, and if I can grow at 10%, then I'm going to get my bonus, and everything's fine. And you have an edifice and a cadence that's already fully up and running. Running a large company is much easier than running a smaller one. Private equity is much easier than venture. I've got numbers to look at. I can dial in what the revenue is going to be next year, up and down a few percentage, and I can manipulate that on a spreadsheet, and out comes different answers. Venture is about extracting enormous signal out of very little data. So what do I know? I've got an entrepreneur with an idea, particularly at the early stage, and how do I evaluate that? Now that means that I think it's like, it's what I call the .9 to the power six problem, and that is that when you think about all the thi…

AI assessment note: “venture is much harder than running a big public company”