YouSaid · the spoken record

Matt Harris

lines on the record: 31
first: 2019-09-23
most recent: 2019-09-23
sittings or episodes: 1
sources: podcast

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“Tier of that. So if you're a software company and you want to start taking payments, Phoenix is our view, the best way to do it, capture most of the economics and have the most integrated solution. And let me tell you, you know, we talked about improbability and we talked about somebody in the partnership raising their hand and saying, I think this is a terrible idea. So in the case of Phoenix, I would say their core competitor is one of the best run, most dynamic, most exciting and successful companies in the valley, which is Stripe, a company about which I have nothing but good things to say, a management team, I revere. And yet, you know, if you're a software company and you're thinking hard about it, your choice is going to come down to partnering with Stripe or partnering with Phoenix. And so is that a windmill that I'm excited to be tilting at? Not exactly. But we believe in these founders and we believe the market's big enough for a couple three players. And we believe that the trend is powerful enough that a lot of boats are going to rise. And so we're really excited about partnering with Finnish.”
2019-09-23 · The Twenty Minute VC · 20VC: Bain's Matt Harris on Why Valuation And Market Size Are Not The Most Important Thing At Series A, Why Backing Sociopaths Can Work & Late Cycle Momentum Investing & The Changes That Will Stay in Venture Forever · IDENTIFIED FROM THE TRANSCRIPT · source
“So just this week, we announced an investment, a company called Phoenix, which is a San Francisco-based payments company. And here we have some elements of improbability. So what Phinex does is basically enable software companies to become payments companies. This is the single most important thing that we see happening in payments right now. The functions that used to be played by merchant acquirers and merchant processors and even issuers and issuer processors are now all being taken over by software companies who acquire customers, whether they be retailers or folks on the cardholder side, acquire those customers through great software and then enable those customers to take payments or make payments using embedded payment functionality. And so that is what's happening. Now, it's a small market today to our earlier conversation. It's about 8% of all payment spend goes through software companies. But our view is that that eight is going to 80. And Phoenix is the leading company that's in the”
2019-09-23 · The Twenty Minute VC · 20VC: Bain's Matt Harris on Why Valuation And Market Size Are Not The Most Important Thing At Series A, Why Backing Sociopaths Can Work & Late Cycle Momentum Investing & The Changes That Will Stay in Venture Forever · IDENTIFIED FROM THE TRANSCRIPT · source
“I wish I'd known more about myself. I feel like I'm 46. I've been doing this a long time. And through that, I know who I am now. I know, for instance, that I'm introverted. I really am not the kind of person you could plop down in the middle of a cocktail party and who would meet everybody by the end of it and have 15 new friends. That's just not who I am. I think when I was 26, that's who I thought I should be. And so I endeavored to be that person. And I wish back then I'd said.”
2019-09-23 · The Twenty Minute VC · 20VC: Bain's Matt Harris on Why Valuation And Market Size Are Not The Most Important Thing At Series A, Why Backing Sociopaths Can Work & Late Cycle Momentum Investing & The Changes That Will Stay in Venture Forever · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't make it work. I mean, it's a hot mess is the actual answer to the question. But I would say what has been helpful is relatively ruthless privatization. I've learned how to delicately, I hope, tell people that I've got too much on my plate to do a particular coffee ketchup. And I've tried to excise some of the things that can be delayed and deferred out of my schedule. Further, I think I've gotten more sensible about what I'm actually critically required to do, whether that's the school play, helping a founder hire a CFO. on Maslow's hierarchy of needs is my contribution most essential. And I've learned both with my many kids and with my many the founders that I'm privileged to work with, you know, have a nuanced conversation about this afternoon you'd like somebody to come do a pricing workshop with you and I could recommend one of my colleagues to do that, but like that's not going to be something that I can do today and I want you to be super successful. So how can we solve that problem? So I've learned how to have the courage to have harder conversations.”
2019-09-23 · The Twenty Minute VC · 20VC: Bain's Matt Harris on Why Valuation And Market Size Are Not The Most Important Thing At Series A, Why Backing Sociopaths Can Work & Late Cycle Momentum Investing & The Changes That Will Stay in Venture Forever · IDENTIFIED FROM THE TRANSCRIPT · source
“Single biggest is time management. We have this unbelievable obligation to the founders we've already invested in that everyone in the business of integrity takes incredibly seriously. And so when our founders call, we have to drop everything and pick up the phone. And as the portfolio grows and the port seats multiply, and frankly, as ownership length stretches out, more and more companies. And so that really detracts from everything else, the everything else being sourcing and winning and leading new deals. And that tension is an ongoing struggle.”
2019-09-23 · The Twenty Minute VC · 20VC: Bain's Matt Harris on Why Valuation And Market Size Are Not The Most Important Thing At Series A, Why Backing Sociopaths Can Work & Late Cycle Momentum Investing & The Changes That Will Stay in Venture Forever · IDENTIFIED FROM THE TRANSCRIPT · source
“Trust your instincts. I think we run into a parallel here of ventilators where we do analysis to convince ourselves in or out of things. And I stand by our practice of doing analysis. But at the end of the day, if it fundamentally controvers your gut, you need to go redo the maths on that because we all, all of us who've been investing a long time with good results got here for a reason and we need to listen to those instincts.”
2019-09-23 · The Twenty Minute VC · 20VC: Bain's Matt Harris on Why Valuation And Market Size Are Not The Most Important Thing At Series A, Why Backing Sociopaths Can Work & Late Cycle Momentum Investing & The Changes That Will Stay in Venture Forever · IDENTIFIED FROM THE TRANSCRIPT · source
“I am ready Third plate by Dan Barber. It's a book about our food systems and other impacting climate change and what we can do about it. Two things that both have to do with hiring. We need to, at the lower ranks of our firms, we need to bring in the correct balance, corrects being 50-50 at a minimum of men and women and minorities should be added to this question as well. And we also need to lateral in senior investing talent at the same time. Both can be done.”
2019-09-23 · The Twenty Minute VC · 20VC: Bain's Matt Harris on Why Valuation And Market Size Are Not The Most Important Thing At Series A, Why Backing Sociopaths Can Work & Late Cycle Momentum Investing & The Changes That Will Stay in Venture Forever · IDENTIFIED FROM THE TRANSCRIPT · source
“Rules of a given industry, not just this rule in the case of Alice that hourly workers don't utilize pre tax spending, but other rules as well, whether it be the rules of the taxi and limousine commission that Uber broke, or more problematically the rules of the SEC that lending club broke. There's enough of a pattern of rulebreaking and people missing the distinction between those rules that ought to be broken and those rules that should never be broken in our industry by these entrepreneurs that I think we need to declare it something that is fundamental. And so in our view, like we are not looking to backtimid founders. We are looking to back founders, of course, that have a deep sense of fiduciary and founders that are not going to break any laws. But if we only back founders who are unwilling to break rules, then I think we're giving away a lot of the upside of our industry.”
2019-09-23 · The Twenty Minute VC · 20VC: Bain's Matt Harris on Why Valuation And Market Size Are Not The Most Important Thing At Series A, Why Backing Sociopaths Can Work & Late Cycle Momentum Investing & The Changes That Will Stay in Venture Forever · IDENTIFIED FROM THE TRANSCRIPT · source
“Okay, now we're definitely cherry picking controversial quotes here, but I'll stand by all of it. Definitely at one point or another, I said all these things. You know, there's a famous quote, I think, by Balzac who says behind every great fortune lies a criminal. And he's a genius, and he wasn't thinking of venture capital when he said that. But it has been my experience, even if you look at companies like Facebook, of course, forgetting about their current travails. If you think about the founding story of Facebook, it's obviously been literally litigated that the idea was stolen, that there was a great crime at the beginning of that story. And I don't think that's, in my experience, that is not uncommon, that these founders who are setting out change the world, to change at least their industries, and in many cases actually the world and change how people behave fundamentally, the level of bravado that that takes comes along with in many cases a willingness to break rules, not just the”
2019-09-23 · The Twenty Minute VC · 20VC: Bain's Matt Harris on Why Valuation And Market Size Are Not The Most Important Thing At Series A, Why Backing Sociopaths Can Work & Late Cycle Momentum Investing & The Changes That Will Stay in Venture Forever · IDENTIFIED FROM THE TRANSCRIPT · source
“alignment to though which I do want to discuss with you is kind of the element of market sizing for these potentially improbable ideas. They look for big towns. Had that on the show Market sizing when thinking about investing in a company. Well, one of my partners, AJ, is fond of saying that he never wants to hear market size in a Series A investor debt.”
2019-09-23 · The Twenty Minute VC · 20VC: Bain's Matt Harris on Why Valuation And Market Size Are Not The Most Important Thing At Series A, Why Backing Sociopaths Can Work & Late Cycle Momentum Investing & The Changes That Will Stay in Venture Forever · IDENTIFIED FROM THE TRANSCRIPT · source
“But it is a red flag, or at least a yellow flag for us, because that level of consensus, if it's driven by how incredible the entrepreneur is, then fine. That's a good signal. But sometimes it's driven by something that just makes too much sense, that rhymes a little too much with stuff that we've seen in the past and lights up everything green on our pattern recognition. And frankly, if that's true for us, it's going to be true for every other venture investor. And census is no way to build an important company. So I think we need at least some level of somebody raising their hand in the partnership and saying, hey, excuse me, but this is impossible. This is not going to happen. You, Matilde, are not going to reinvent email. Email has been around for 50 years and people's habits are incredibly set. And so that's what we look for is some level of contention around whether there's such a thing as possible.”
2019-09-23 · The Twenty Minute VC · 20VC: Bain's Matt Harris on Why Valuation And Market Size Are Not The Most Important Thing At Series A, Why Backing Sociopaths Can Work & Late Cycle Momentum Investing & The Changes That Will Stay in Venture Forever · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, really nice 300 million asset by Salesforce, but they're not. And they're $1 or $2 billion now. That distinction and being able to make it. Well, challenging, and I can't say we figured it out entirely, but I'll point out in the case of Matilde that the audacity to disrupt email is a grand vision. I mean, it's exactly what you want your entrepreneur and founder to say is that what they care about is organizational discipline. And she's not wrong, obviously. But from an investor's perspective, she was ranks extremely high in the first instance on the Audacity scale. It was an improbable idea that she, because of her organizational strength has actually made possible. But I don't actually think that contradicts the point. I mean, the great entrepreneur's focus on those organizational tasks that make up their real work, but her and many others started with something deeply improbable. So how do you know the difference? I think, you know, you need to have, we have a rule internally that if everybody votes for a deal, we need to pause and rethink it. It doesn't mean that perversely, if everyone votes yes, we're going to say no.”
2019-09-23 · The Twenty Minute VC · 20VC: Bain's Matt Harris on Why Valuation And Market Size Are Not The Most Important Thing At Series A, Why Backing Sociopaths Can Work & Late Cycle Momentum Investing & The Changes That Will Stay in Venture Forever · IDENTIFIED FROM THE TRANSCRIPT · source
“where you build a company and you sell it for $300 million to an incumbent. And if you had bought in at 30 posts, you're delighted. But if you bought in at 60 posts and got some dilution along the way, you're probably not so delighted. So improbability is one of those criteria that for us have helped to define which companies have a chance. Which companies are actually going to potentially put a dent in the universe, to quote Steve Jobs, and which companies are more kind of the work a day, we're going to get to a good point and someone's going to want to buy us. In on the show, and she said that actually organizational discipline is much more important than grand vision. kind of enterprise software companies today that are at that billion dollar mark”
2019-09-23 · The Twenty Minute VC · 20VC: Bain's Matt Harris on Why Valuation And Market Size Are Not The Most Important Thing At Series A, Why Backing Sociopaths Can Work & Late Cycle Momentum Investing & The Changes That Will Stay in Venture Forever · IDENTIFIED FROM THE TRANSCRIPT · source
“Fair question, certainly counter to it on the face of it. I think what we found is that probable ideas, ideas that seem reasonable on the face of it, are unlikely to generate economic moats and profit pools and outstanding both performance and multiples that we need these days. And we have seen, I mean, the good news, you and I have talked a little bit about the challenges in our business, but the good news is if you look at the data on exits or let's say opportunities to enjoy liquidity, sometimes not a full exit, it used to be that most venture exits were between 250 million and half a billion. And the fact is empirically the ceiling has been raised in terms of the potential value creation. Now, again, it could revert tomorrow and this could all be illusory, and much of it, in fact, is secondary liquidity and not full exit. So please enjoy my list of caveats. But empirically, the value creation ceiling has gone up. And so the job is to figure out which companies look”
2019-09-23 · The Twenty Minute VC · 20VC: Bain's Matt Harris on Why Valuation And Market Size Are Not The Most Important Thing At Series A, Why Backing Sociopaths Can Work & Late Cycle Momentum Investing & The Changes That Will Stay in Venture Forever · IDENTIFIED FROM THE TRANSCRIPT · source
“To collaboratively lean in at Series A and help build a company. And the fact is the physics of our business have made that much harder. So I feel good about our discipline in terms of maintaining our focus on ownership. I feel good about our practice of continuing to honor seed vets, seed investors and angel investors and where we've struggled is a two-handed Series A, which is just very difficult at this point.”
2019-09-23 · The Twenty Minute VC · 20VC: Bain's Matt Harris on Why Valuation And Market Size Are Not The Most Important Thing At Series A, Why Backing Sociopaths Can Work & Late Cycle Momentum Investing & The Changes That Will Stay in Venture Forever · IDENTIFIED FROM THE TRANSCRIPT · source
“It had proven to be feasible for us and it requires discipline. We definitely walk away from deals based on ownership and that happens frequently, far more frequently than walking away based on valuation, although of course the issues are related. The bigger issue that valuation though is what you raise, which is co-lead dynamics. So we as a firm are generally allergic to the idea of forcing people to give up their pro rata. I mean, even if it was possible and generally it's legally not actually possible to force anyone to, but as you know, probably to your frustration is common practice for Series A and later investors to push around the seed investors, and we generally don't do that. We think they deserve those rights and they should get to avail themselves of those rights. So where we end up having to somewhat frustratingly draw a hard line is we generally don't co-lead Series A's anymore. And it used to be this incredibly collegial, fun experience of partnering with the peer investor to”
2019-09-23 · The Twenty Minute VC · 20VC: Bain's Matt Harris on Why Valuation And Market Size Are Not The Most Important Thing At Series A, Why Backing Sociopaths Can Work & Late Cycle Momentum Investing & The Changes That Will Stay in Venture Forever · IDENTIFIED FROM THE TRANSCRIPT · source
“Has moved meaningfully. But again, in our experience, not so much that it constrains the company's ability to raise future capital if it's merited.”
2019-09-23 · The Twenty Minute VC · 20VC: Bain's Matt Harris on Why Valuation And Market Size Are Not The Most Important Thing At Series A, Why Backing Sociopaths Can Work & Late Cycle Momentum Investing & The Changes That Will Stay in Venture Forever · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, and so I would say the incidence of us participating in some of these series A's, I mean, look, let's be honest, there are series A's that happen that are 90 to 120 post. And we have not done those. Our view is that the expectation that the Series B will therefore be at 250 million. It may well happen, but it is surely an unfair expectation on any founding team that they'll be able to continue sufficient momentum without a blip to be able to have that kind of successful follow-on financing. So there is an absolute level at which and above which we think it's just unhealthy, that it isn't about value transfer to the founder is just about being opportunistic, frankly, in a way that's not only not great for the investor, but not great for the company. But in what we would now have come to believe is a reasonable post-money range for Series A, so kind of 30 to 60, which is important in light of the fact that you go back five years, that range would have been kind of 15 to 30.”
2019-09-23 · The Twenty Minute VC · 20VC: Bain's Matt Harris on Why Valuation And Market Size Are Not The Most Important Thing At Series A, Why Backing Sociopaths Can Work & Late Cycle Momentum Investing & The Changes That Will Stay in Venture Forever · IDENTIFIED FROM THE TRANSCRIPT · source
“So we don't obsess about Series A valuation. Do obsess about Series A ownership. And we, of course, in those deals that end up with these stratospheric valuations in the early stages, our underwriting thresholds around the quality of the founding team are similarly stratospheric. So I have two questions that I can't not ask post that. The first one is like the most common thing that I would hear in response to that is that's fine and I understand kind of the transfer of value to the founder, but actually it just makes the series be that much harder because then”
2019-09-23 · The Twenty Minute VC · 20VC: Bain's Matt Harris on Why Valuation And Market Size Are Not The Most Important Thing At Series A, Why Backing Sociopaths Can Work & Late Cycle Momentum Investing & The Changes That Will Stay in Venture Forever · IDENTIFIED FROM THE TRANSCRIPT · source
“That if you get the right ownership and you get the company right, then whether you paid more in the sense of dollars for that meaningful ownership or not is irrelevant. Now, obviously, it affects multiple. And the fact that turn 100x deal into a 50x deal by overpaying by 2x seems laughable because 50x is obviously still a marvelous outcome. But surely on average in an aggregate for our industry, what it's doing is shifting economic value from investors to founders and saying that this sort of let's skim the cream off these returns on a multiple basis that investors used to enjoy when they invested at lower valuations and now the valuations shift up that those truly extreme multiples frankly get diminished and more values in the pockets of founders than in the pockets of series a investors i don't know that as a society that's a bad thing i mean it's certainly not ideal for our industry but i get it given the scarcity of extraordinary”
2019-09-23 · The Twenty Minute VC · 20VC: Bain's Matt Harris on Why Valuation And Market Size Are Not The Most Important Thing At Series A, Why Backing Sociopaths Can Work & Late Cycle Momentum Investing & The Changes That Will Stay in Venture Forever · IDENTIFIED FROM THE TRANSCRIPT · source
“But first, I'd like to say that I really look forward to the first time an entrepreneur plays that back to me in our negotiations. So thank you for outing me on that sentiment. And it is indeed, of course, shorthand. But what I mean by that is our discipline here at the Series A is largely focused on ownership versus pure valuation. And our observation, again, across 20 years of venture capital here at Bank Capital of Ventures is that if you own 0%, 25%, 18%, something meaningful of a company that ends up being important, then it doesn't really matter whether your entry price was 20 posts or 40 post. In other words, whether you put in $6 million or even $12 million to buy that 20% ownership, you're going to be richly rewarded if you got the company right. If it ends up being one of these companies that end up being worth multiple billions of dollars, you're never going to regret the price you paid. And so that's what I mean.”
2019-09-23 · The Twenty Minute VC · 20VC: Bain's Matt Harris on Why Valuation And Market Size Are Not The Most Important Thing At Series A, Why Backing Sociopaths Can Work & Late Cycle Momentum Investing & The Changes That Will Stay in Venture Forever · IDENTIFIED FROM THE TRANSCRIPT · source
“Frankly, as we're seeing from some of our peers, an acceleration in pace, both the pullback and acceleration seem to me arbitrary. So our goal has been to invest $300 or $400 million a year. Again, we do both venture and growth equity, so that seems like a lot of money, but many of those are large shacks and later stage companies. Fully half of it is your classic $5 to $12 million Series A. And our pacing has been as steady as we can manage it, which is, I think, a kind of a declaration of ignorance, if you will, that we don't know how this is going to end or when it's going to end. And so therefore, we want to be in the market on a steady basis. No, I agree with you in terms of the steady basis, but I do want to speak about the pricing element there. Because when we chatted before, you said to me series A valuations don't matter. Now, I may be paraphrasing and cutting and cleaning that one to make it sound worse than it is in which me for it, but imagine actually I had some strong questions following. So what did you mean by series evaluations don't matter anymore? What's the thing?”
2019-09-23 · The Twenty Minute VC · 20VC: Bain's Matt Harris on Why Valuation And Market Size Are Not The Most Important Thing At Series A, Why Backing Sociopaths Can Work & Late Cycle Momentum Investing & The Changes That Will Stay in Venture Forever · IDENTIFIED FROM THE TRANSCRIPT · source
“In them now. So, my natural reaction is to be scared and skittish, et cetera. But that footing, as mentioned, has cost me a fair amount of money because I've missed some great companies on price that I now regret. I mean, we're going to get on to price. If we talk about kind of cadence of investing first and kind of the market timing, so to speak, I always could pull back and say, no, this is ridiculous. I'm not paying 300 X revenues for this or whatever that may be. And then many mentors of mine say, Harry, you can never time markets, you'll lose money. How do you think now, having had those learnings about cadence actually of deploying capital through these cycles? Is it the continuous stream? How does one change their cadence? I endeavor not to change my cadence. You know, there's a concept that limited partners talk about of time diversification. And I think it's important. It is impossible to know except in long retrospect whether 2019 was a great year to be investing or a horrific year to be investing. And so to make subjective judgments regarding either a pullback”
2019-09-23 · The Twenty Minute VC · 20VC: Bain's Matt Harris on Why Valuation And Market Size Are Not The Most Important Thing At Series A, Why Backing Sociopaths Can Work & Late Cycle Momentum Investing & The Changes That Will Stay in Venture Forever · IDENTIFIED FROM THE TRANSCRIPT · source
“As skeptical four years ago as I am today. So, yes, the things we see today, and there are innumerable examples from this week, this month, you know, this quarter seem preposterous in light of the 40-year experience of the venture industry and of the technology industry, but yet they've proven to be durable. And so I think for many of us, we've had to reconsider the fact that some of these changes may be actually with us for a long time and may be forever. Perhaps what's happening in technology is actually so important that the future earnings streams associated with some of these sectors and some of these companies are just so meaningful and transformative that yes, maybe they're being recognized and priced in early. But in fact, there's some correct observations to be made and the market is logical and aggregate in saying that high growth technology companies are capable of creating tens of billions of dollars. And so therefore, we will pay very high prices to get.”
2019-09-23 · The Twenty Minute VC · 20VC: Bain's Matt Harris on Why Valuation And Market Size Are Not The Most Important Thing At Series A, Why Backing Sociopaths Can Work & Late Cycle Momentum Investing & The Changes That Will Stay in Venture Forever · IDENTIFIED FROM THE TRANSCRIPT · source
“Sure, feels more secular than cyclical. And every time there's a lip downward in multiples or in the market, it actually has come right back up. And so all of that pattern recognition I have around what long-term multiples should be and the fact that what goes up must come down has not resurfin me particularly well, I will say, and this incredible duration of this bull run. I mean, I'm fascinated by the discussion on the bull run because naturally I see it and I get very hesitant I pull back. Can I ask, do you think that we are seeing late cycle momentum investing? Is that your belief today? The only thing that keeps me from enthusiastically saying yes to that is that I've said that very same enthusiastic yes four years in a row. So, I mean, we've redefined, I guess, what late cycle means and proven that you can stay late for longer than anyone thought. I don't see new behavior today that I wasn't seeing for years ago. And I wasn't.”
2019-09-23 · The Twenty Minute VC · 20VC: Bain's Matt Harris on Why Valuation And Market Size Are Not The Most Important Thing At Series A, Why Backing Sociopaths Can Work & Late Cycle Momentum Investing & The Changes That Will Stay in Venture Forever · IDENTIFIED FROM THE TRANSCRIPT · source
“It was a formative experience 2000. And as I mentioned, we started the firm in partnership with these two even then very tenured venture capitalist Mark Nunnelly and Paul Mater. And I'll never forget spring of 2000 when the Nasdaq kind of plummeted. Bow and I, you know, as brash young folks in our mid-20s, were thinking, hey, this is just a blip. This happens. It goes down. It comes back up. We're still in the middle of a revolution. And they sat us down very clearly and said, no, you don't get it. This is nuclear winter. This is not a blip. This is not necessarily something that you can just ride out. You have to rethink your strategy. And it was amazing for us at that point to get that input. And yet, I will say, I think that my deep and abiding fear and recognition of the cyclicality of finance and the cyclicality of technology has actually cost me a lot of money because, you know, we're 10 years in, maybe 11 by some counting into this incredible bull run where”
2019-09-23 · The Twenty Minute VC · 20VC: Bain's Matt Harris on Why Valuation And Market Size Are Not The Most Important Thing At Series A, Why Backing Sociopaths Can Work & Late Cycle Momentum Investing & The Changes That Will Stay in Venture Forever · IDENTIFIED FROM THE TRANSCRIPT · source
“I want to win and help the companies as much as I want to help them. And it's possible in certain lanes and with certain types of practice and certain types of investors that that might be a startup fund or a standalone fund. But for me, it's very clear in financial technology that being at Bain Capital with all the resources of the firm and the brand name, et cetera, and what we can bring to the table as a larger global asset manager. And within FinTech, that's really differentiated and useful. And so on that basis, it's a quite logical thing for me. And the last thing I'll say is there are some people who just need to be on their own, who just need to make their own decisions unencumbered by a process, who have that kind of fierce autonomy. That doesn't characterize my makeup. I love having partners. I love being asked hard questions. I think it makes me a better.”
2019-09-23 · The Twenty Minute VC · 20VC: Bain's Matt Harris on Why Valuation And Market Size Are Not The Most Important Thing At Series A, Why Backing Sociopaths Can Work & Late Cycle Momentum Investing & The Changes That Will Stay in Venture Forever · IDENTIFIED FROM THE TRANSCRIPT · source
“And joy of those early days. And frankly, if you're founding a fund, I would recommend you make it as much like a company, as much like one of the companies you're backing as possible experientially. Like we, when we founded Village Ventures, we actually put two VCs on our board of directors, Mark Dunnoley from Vank Capital, Paul Mater from Highland, and we do quarterly board meetings for years and years. So a big part of the difference is, and in a larger partnership where you're just one member of a broader team and where the capital kind of seems to show up every two or three years, it's very different, as you know, to a startup fund where you have existential fear and risk and you realize that there's a hundred percent accountability on you. So I enjoyed that dynamic, but frankly, I think the question as I've gone on in my career, the relevant question to me is, what's the best platform for me as an investor? What's the best platform for me to be able to win the deal?”
2019-09-23 · The Twenty Minute VC · 20VC: Bain's Matt Harris on Why Valuation And Market Size Are Not The Most Important Thing At Series A, Why Backing Sociopaths Can Work & Late Cycle Momentum Investing & The Changes That Will Stay in Venture Forever · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I think there's an entrepreneurial excitement to starting your own firm, Harry. You've experienced this yourself. And so I won't ever say that it's similar to what an operating executive or an entrepreneur of a technology company. It's not similar to that because the venture business itself is quite simple and straightforward. But yet, I think it's an important crucible to go through. And it certainly was important for me, that's sort of starting from scratch experience. And in fact, at Village, I also started an operating company within Village Ventures a fund administration business that we grew to 70 people and sold for a great return. And really for me, that was about trying my hand at operating. I think the clear conclusion is I'm not a world-class CEO. And so happy to have returned exclusively investing. But one takeaway from the village experience for me was that it's enormously beneficial for an investor to have gone through a founding moment and to understand the kind of pain and pressure.”
2019-09-23 · The Twenty Minute VC · 20VC: Bain's Matt Harris on Why Valuation And Market Size Are Not The Most Important Thing At Series A, Why Backing Sociopaths Can Work & Late Cycle Momentum Investing & The Changes That Will Stay in Venture Forever · IDENTIFIED FROM THE TRANSCRIPT · source
“Technology. This is in 2000 when we founded Village Ventures and back then there was really no term fintech and very little activity, frankly, in financial technology. But it seemed like a big opportunity for entrepreneurs to innovate and change some of the dynamics in the financial services industry that the incumbents were not addressing. And so that's what I did. I ran village ventures for a dozen years alongside Bo, focused on the few entrepreneurs in the early days that were like-minded and also seeing opportunities and payments and lending and investing in insurance. But then as we now all know, things picked up pretty dramatically and FinTech became 10 or 15% of the venture business, 20% some years. And when that happened, I decided to come back to being capital about seven years ago and really build up the fintech practice here at Bay Capital Ventures.”
2019-09-23 · The Twenty Minute VC · 20VC: Bain's Matt Harris on Why Valuation And Market Size Are Not The Most Important Thing At Series A, Why Backing Sociopaths Can Work & Late Cycle Momentum Investing & The Changes That Will Stay in Venture Forever · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I started 25 years ago in consulting at Bain Company, and then pretty quickly joined Bain Capital, so in 1995. To be honest, that had nothing to do with venture back then. Bain Capital was a private equity firm. And so that was my first foray in investing. But I quickly realized I was more of a venture guy. And so in 2000, Bank Capital actually gave me some money, kind of seeded me, as it were, to start my own firm called Village Ventures. I then partnered with Bo Peabody. And so really that was my entree into venture, was 26-year-old starting my own firm, raising a fund, and trying to figure it out. The first thing I did really, we were at that point in the wreckage of the dot-com bust. And so what had seemed like a pretty easy business all of a sudden started to seem incredibly hard. And I realized that in order for me to be successful, I needed a distinctive strategy somewhere where I could be more of a leader than just sort of a generalist. And so I decided to focus on financial.”
2019-09-23 · The Twenty Minute VC · 20VC: Bain's Matt Harris on Why Valuation And Market Size Are Not The Most Important Thing At Series A, Why Backing Sociopaths Can Work & Late Cycle Momentum Investing & The Changes That Will Stay in Venture Forever · IDENTIFIED FROM THE TRANSCRIPT · source