QED Investors

Get first-party targeting with Brave's private ad platform: cookieless and future proof ad formats for all your business needs. Performance meets privacy. Head to https://brave.com/ads/ and mention “Turpentine” when signing up for a 25% discount on your first campaign. Warp: Don’t let payroll and compliance hold your startup back: visit https://joinwarp.com/peel to get started and receive a $1,000 gift card when you first run payroll. Frank Rotman is the Co-Founder and CIO of QED Investors, and before that helped start Capital One. Frank and I go deep on their founding stories, as well as one of QEDs first big winners, Nubank. Frank also gives us a crash course on fintech, lending businesses, and crypto use cases; his hot takes on the venture asset class as a whole, with lots of advice for emerging managers; plus a case study on how high valuations too early on are bad for a startup. Timestamps: (00:00) Intro (04:22) Starting Capital One in 1988 (07:04) Spinning out as an IPO (10:42) Starting QED in 2008 before Fintech was a category (20:51) Raising their first outside fund (22:03) Investing early in Nubank (25:11) Fintech opportunities in India (27:45) De-risk investing in new markets (29:55) How financial services have changed over the past 30 years (31:33) Inside a new Capital One credit card in the 90’s (36:31) How most companies launched new cards in the 90’s (39:46) The most profitable types of credit card customers (42:00) Mistakes founders make building credit businesses (48:33) Frank’s “Three Body Framework” for VC (54:48) Losing strategies in VC (01:03:39) Unpacking why high valuations are bad for startups (01:16:20) Frank’s journey in and out of crypto (01:24:23) Actual use cases for stable coins and NFTs (01:34:09) Unpacking the lending supply chain (01:41:44) The difference between Fundamentalist and Revolutionary investors Referenced: VCs Three Body Framework: https://cdn.prod.website-files.com/605db59b78445cf5ae548e49/628b9d826f9af3217c9807a2_Three-Body%20Problem_%20Finding%20the%20New%20Stable%20Points%20in%20Venture%20Capital.pdf The House Money Effect: https://x.com/fintechjunkie/status/1466217991532650496 Fundamentalist vs Revolutionary Investors: https://www.linkedin.com/posts/frank-rotman_there-has-been-and-always-will-be-two-competing-activity-7128137991654445057-NuXf/ Where to find Frank: Twitter: https://twitter.com/fintechjunkie LinkedIn: https://www.linkedin.com/in/frank-rotman/ Where to find Turner: Twitter: https://twitter.com/TurnerNovak LinkedIn: https://www.linkedin.com/in/turnernovak/ Newsletter: https://www.thespl.it/

Frank Rotman

Founding Partner

QED Investors

In recent years, we've seen home insurance premiums soar by historic amounts. Not only have prices gone up, but in some instances, we've seen national carriers simply announce that they're abandoning certain states. So, what's behind the mess? Why isn't competition causing markets to come into balance? What is the role of state insurance regulators? On this episode we speak with two guests who help us understand the problem. Amias Gerety is a partner at QED Investors, and a board member for the insurance company Kin. RJ Lehmann is the editor-in-chief for the International Center for Law & Economics. The two of them discuss insurance from both the financial side and the regulatory side. They explain where things have gone wrong and the prospects for market stabilization. See omnystudio.com/listener for privacy information.

Amias Gerety

Partner

QED Investors

RJ Lehmann

Editor-in-Chief

International Center for Law & Economics

SaaStr Founder and CEO Jason Lemkin and Partner at QED Investors Amias Gerety chat on the Fintech Beat podstream about all things SaaS, money, and what makes a great founder. Some topics covered include: What makes SaaS so great How SaaS is fairing in the "macro" economy Perspectives on fintech and SaaS and how they overlap How an investor chooses what to invest in and when it's time to walk away Fintech Beat is all about the intersection of finance, tech, and policy, and now they're touring outside the neighborhood of fintech and into the great big world of SaaS. While the world of public tech stocks is defined by consumer-facing juggernauts like Facebook, Amazon, and Google, the world of venture capital is defined by the North Star of SaaS. Let's dive right in.

Amias Gerety

Partner

QED Investors

Sam Lessin is a Co-Founder and Partner @ Slow Ventures with a portfolio including the likes of Airtable, Robinhood, Slack, Solana, PillPack and many more unicorn companies. Prior to Slow, Sam was a VP Product at Facebook having sold his company to Meta. Frank Rotman is a founding partner of QED Investors, one of the leading fintech-focused venture firms investing today with a portfolio including the likes of Klarna, Kavak, Quinto Andar, Credit Karma and more. As for Frank, prior to QED, Frank was one of the earliest analysts hired into Capital One and spent almost 13 years there helping build many of the company's business units and operational areas. Jason Lemkin is the Founder @ SaaStr one of the best-performing early-stage venture funds focused on SaaS. In the past, Jason has led investments in Algolia, Pipedrive, Salesloft, TalkDesk, and RevenueCat to name a few. Prior to SaaStr, Jason was an entrepreneur, selling EchoSign to Adobe for $100M where it is now a $250M ARR product. In Today's Discussion on Why Seed is Broken We Discuss: 1. The Seed Model Was Broken and What Comes Now: Why does Sam Lessin believe the model for seed of a "factory line" was broken? What does he believe will replace it? Why does Jason Lemkin argue that this might not be the case for SaaS and enterprise? 2. Round Construction: YC, Multi-Stage Funds and Party Rounds: Why does Sam Lessin believe we have seen the end of party rounds? Why does Jason Lemkin disagree and we will see more than ever? Why does Sam Lessin believe the factory model of YC churning out companies is over? Where does Jason Lemkin believe the value lies in the YC model? Will the multi-stage funds remain in seed? How has their entrance and deployment changed the seed market? 3. VC Value Add at Seed: Is it BS? Why does Jason believe all talent arms in venture firms have failed? Why does Sam believe that no VCs provide value? Do the best founders really need help? Why do Jason and Sam disagree? 4. What Happens Now: Why does Jason believe that every manager can write off their fund from 2021? Who will be the winners in seed in the next 10 years? Why does Sam believe if you want to bet on AI, just bet on Meta or Microsoft? What will happen to the many companies with no PMF but 10 years of runway?

Sam Lessin

Partner

Slow VenturesFin AnalyticsFin

Frank Rotman

Founding Partner

QED Investors

Jason Lemkin

Founder

SaaStrStorm Ventures

In the 24th episode of Cartoon Avatars, QED Investors Co-Founder and CIO Frank Rotman joins the crypto debate with Zach, and discusses Capital One’s unique origins and structure with Logan. Plus the “Redpoint TikTok Guy” Rashad Assir is finally revealed in his first appearance on the pod. (0:00) Intro (0:44) Introducing Rashad Assir (3:25) Introducing Frank Rotman (6:36) History of Capital One (14:40) Building the infrastructure (16:25) Starting QED (18:29) Frank’s Web3 journey (24:15) Where’s the substance? (28:37) What in crypto makes the most sense? (30:48) Lending vs Leverage (36:55) Crypto in different countries (45:14) Products are the hard part (50:24) Noisy data (52:40) To what extent is this interesting? (1:00:16) The oracle problem (1:07:47) Protections of a bank (1:12:45) Reversibility (1:17:52) Embedded features (1:23:13) Mercenaries vs missionaries (1:27:13) Web3 living up to its name (1:36:06) Immutable public database (1:39:09) Outro   Links: https://www.tiktok.com/@redpoint?lang=en https://www.tiktok.com/@corporayshid?lang=en   Mixed and edited: Justin Hrabovsky Produced: Andrew Nadeau and Rashad Assir Executive Producer: Josh Machiz Music Griff Lawson   🎙 Listen to the show Apple Podcasts: https://podcasts.apple.com/us/podcast... Spotify: https://open.spotify.com/show/5WqBqDb... Google Podcasts: https://podcasts.google.com/feed/aHR0...   Follow on Socials 📸 Instagram - https://instagram.com/cartoonavatars 🐦 Twitter - https://twitter.com/cartoonavatars 🎬 Clips on TikTok - https://www.tiktok.com/@cartoonavatars   About the Show A Saturday morning podcast hosted by Logan Bartlett (Partner and Managing Director at Redpoint Ventures) covering the tech news with his friends and other people with industry expertise. Executive Producer: Rashad Assir Producer: Leah Clapper Mixing and editing: Justin Hrabovsky Check out Unsupervised Learning, Redpoint's AI Podcast: https://www.youtube.com/@UCUl-s_Vp-Kkk_XVyDylNwLA 🎥 Subscribe on YouTube: https://www.youtube.com/channel/UCugS0jD5IAdoqzjaNYzns7w?sub_confirmation=1 Follow on Socials 📸 Instagram - https://www.instagram.com/theloganbartlettshow 📱 X - https://twitter.com/loganbartshow 🎬 Clips on TikTok - https://www.tiktok.com/@theloganbartlettshow About the Show Logan Bartlett is a Software Investor at Redpoint Ventures - a Silicon Valley-based VC with $6B AUM and investments in Snowflake, DraftKings, Twilio, and Netflix. In each episode of The Logan Bartlett Show, we sit down with the people behind today’s most important startups and extract the tactics, lessons, and frameworks they’ve learned the hard way. Conversations span hiring to GTM, product, growth, fundraising and everything in between - collectively forming the ultimate playbook to make you a better CEO, investor or board member. Tap follow and enable notifications to stay ahead of the game.

Frank Rotman

Founding Partner

QED Investors

Bill Cillufo is Partner and Head of International Investments at QED, one of the leading fintech venture firms today with a portfolio including Nubank, Kavak, Klarna, Quinto Andar and Bitso to name a few. As for Bill, he has led investments in Nubank, Loft, Wagestream and Creditas among others. Prior to joining QED, he spent nearly 20 years at Capital One, spanning several roles and leading several businesses. During Bill's last 3 years at Capital One, he led its Co-Brand and Private Label credit card business, building the business nearly from scratch to one of the top few players in the US market. In Today's Episode with Bill Cillufo You Will Learn: 1.) Origins into Venture: How Bill made his way from 20 years at Capital One to becoming a Partner @ QED? How did Capital One inform his mindset around unit economics? Having seen booms and busts firsthand with Capital One, how did that impact his investing mindset today? 2.) The Landscape: What is Happening? Where does Bill believe the biggest crunch in funding markets is today? Does Bill believe this will trickle down to the early stage? How does Bill advise his portfolio companies on runway and burn given the environment? What does Bill believe that many have not seen that is coming? 3.) Bill Cillufo: The Investor How does Bill analyse his own relationship to price and price sensitivity? How has Bill changed as an investor over the last 5 years? What caused the changes? How does Bill reflect on reserves management given the new landscape we are in? 4.) QED: The Expansion Does Bill believe that expanding geographically has become easier with time? What has become harder about expanding into new geographies? How important does Bill believe partnering with local firms is when VCs enter new territories? Item's Mentioned In Today's Episode with Bill Cillufo Bill's Favourite Book: Tom Clancy: The Hunt for Red October Bill's Most Recent Investment: Refyne

Bill Cillufo

Partner and Head of International Investments

QED Investors

Frank Rotman is a founding partner of QED Investors, one of the leading fintech-focused venture firms investing today with a portfolio including the likes of Klarna, Kavak, Quinto Andar, Credit Karma and more. As for Frank, prior to QED, Frank was one of the earliest analysts hired into Capital One and spent almost 13 years there helping build many of the company's business units and operational areas. Post Capital One, Frank went on to found a student lending company before joining up again with Nigel Morris to co-found QED. In Today's Episode with Frank Rotman You Will Learn: 1.) How Frank made his way into the world of venture having spent 13 years scaling Capital One? What was the founding moment for Nigel and Frank with QED? How does Nigel compare to poker to venture capital? Where are they similar? Where are they different? 2.) Does Frank feel that price discipline has disappeared in the venture market today? What have been some of Frank's biggest lessons on price? Is Frank concerned by the compression in deployment timelines for funds? How does Frank feel on the rise of pre-emptive rounds? In what way does Frank advise his founders when they are offered pre-emptive rounds? 3.) How important does Frank believe sizing your initial position is, from an ownership perspective? Is it possible to build ownership in your winners? What have been some lessons for Frank with regards to the speed of which breakout companies are clear? How does Frank assess and analyse bridge rounds and whether to participate or not? 4.) Why does Frank believe that the VC world is less collaborative than ever today? What has caused this? What can VCs do to change this? How do we solve the structural problem of VCs needing ownership for their business and founders not wanting excessive dilution? What does Frank believe is the most dangerous trend in the VC market today? 5.) How does Frank think about what he can do to improve his investment decision-making process? What repeatable process has Frank landed on that works? Where do many make mistakes here? How does Frank view the relationship between process and outcome? Item's Mentioned In Today's Episode with Frank Rotman Frank's Favourite Book: Tom Robbins Frank's Most Recent Investment: Hello Alice

Frank Rotman

Founding Partner

QED Investors

Nigel Morris is the Co-Founder and Managing Partner of QED Investors, one of the leading fintech-focused venture firms of the last decade with numerous unicorn investments, including Credit Karma, NuBank, Avant, SoFi, Klarna, GreenSky, and AvidXchange. Prior to QED, Nigel co-founded Capital One Financial Services in 1994. During his 10-year tenure, Nigel transitioned Capital One from an emerging start-up to an established public company valued at over $20 billion with over 15,000 employees. Finally, Nigel also sits on or has sat on the board of Nubank, Prosper, Zopa, Klarna, The Economist and London Business School to name a few. In Today's Episode with Nigel Morris You Will Learn: 1.) How Nigel made his way into the world of startups with Capital One back in 1994 and how that journey led to his founding one of the leading fintech investment firms in QED? What made Nigel want to develop QED from a family office into a large scaling venture firm? 2.) Where does Nigel's passion for mental health stem from? Why does Nigel believe VC and entrepreneurship is riddled with mental health problems? How does Nigel deal with his own self-doubt and insecurity? In what way does Nigel analyse his own relationship to money today? How has it changed over time? How has that relationship to money changed how he thinks about investing? 3.) What does Nigel believe it takes to be a great listener? How does Nigel think about asking the risk questions to move the founder to the right insight? How does Nigel create the conditions where the entrepreneur can be much more open? What questions would Nigel never ask? How does Nigel describe his style of board membership? How has it changed? 4.) How does Nigel think about the centrality of unit economics? What does Nigel look for in the way that the entrepreneur thinks through and analyses unit economics? When does Nigel believe you have tangible data to rely on to justify unit economics? What is the biggest challenge with unit economics? What should companies do when their competitors raise massive funding rounds? 5.) Why does Nigel believe that "bundling" is a canard? What does not work regarding how traditional "bundling" works? Why might it be different for the next generation of fintech providers to bundle different products? Why does Nigel believe lending is a much harder insertion point to start than current accounts? How does Nigel think about the right insertion point? Item's Mentioned In Today's Episode with Nigel Morris Nigel's Favourite Book: Leadership and the New Science: Discovering Order in a Chaotic World Nigel's Most Recent Investment: Bitso As always you can follow Harry and The Twenty Minute VC on Twitter here!

Nigel Morris

Co-Founder & Managing Partner

QED Investors