My guest today is a fintech operator turned investor. Frank is the real deal. He spent almost 13 years at Capital One, is the co-founder of QED Investors, and made the Midas List of Top 100 Investors FOUR times. Everybody is a fanboy of somebody, and I’m a fanboy of Frank for sure – he has the amazing ability to spot leaders in the fintech space and has done it for a long period of time. In our business you get rewarded with a lot of money to manage and QED has just raised a fresh billion dollars. I learned a lot from this conversation and think every investor can do the same.
You can also listen right here on the blog:
For more details on today’s conversation read on below…
Guest: Frank Rotman
Profile: Founding Partner, QED Investors
What’s Frank Panicked About?: Just about everything in the market today.
The world we know has changed. Everything we know about fundamentals is out the window. At a high level, whether interest rates, or a different era, or a bubble – nothing is normal anymore. The venture capital landscape is nuts; public markets are on fire. The adoption of web3 is unlike anything seen before. It’s both the stuff of dreams, and of nightmares. Separating the bubbles from megatrends is really difficult. Yet at the end of the day, businesses are about manufacturing something people want and then selling it for more than it cost you to make it. The problem is all the fundamentals of building a business isn’t what’s being valued in the market today. All the hype and money floating around messes up the picture even more. Everywhere you look, there’s a billion dollar company being minted. But if you actually look under the cover, it starts to get a bit disturbing because a lot of these companies really haven’t cracked the code on their businesses. They don’t really have the scale that would historically come with these valuations. It’s hard to value cash flows. It’s hard to understand how some of these unicorns will compete in five years. Yet two things can be true at the same time. There can be great opportunities, and there can be madness. You really have to unpack it all and figure out where you can play. You have to find out where your competitive edge is.
“The first board meeting after you make an investment is the ‘oh shit’ board meeting … because at that point you actually know what you invested in.”