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
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
The Twenty Minute VC
4.4 • 637 Ratings
🗓️ 23 September 2019
⏱️ 36 minutes
🧾️ Download transcript
Summary
Matt Harris is a Partner @ Bain Capital Ventures, a leading US venture fund with a portfolio that includes the likes of LinkedIn, Lime, SendGrid, Jet.com and more incredible companies. As for Matt, he specialises in financial technology and services and has led investments in the likes of Acorns, OpenFin, SigFig, Ribbon and Billtrust. Prior to joining BCV, Matt founded Village Ventures, which he ran for 12 years and where he focused on early-stage fintech investing. Before Village Matt actually started his investing career Bain Capital private equity in 1995.
In Today’s Episode You Will Learn:
1.) How Matt made his way into the world of venture from private equity and what led him to specialise as he has done in the world of fintech?
2.) How did seeing the boom and bust of the dot com impact Matt's investing mindset today? How has Matt's fear of the cyclicality of markets actually lost him a lot of money in the past? What has that taught Matt on trying to time markets? What were the main takeaways for Matt from running his own firm? How does it differ to a partnership?
3.) Why does Matt believe we are seeing late-cycle momentum investing today? What is the evidence to suggest this? How does Matt think about the right cadence to invest through market cycles? What does Matt mean when he says, "Series A valuation does not matter anymore"? Why? How does Matt assess his own price sensitivity today?
4.) Why does Matt believe that investing in improbable ideas is a good strategy? What does this mean the internal investment decision-making process looks like at Bain? Why is full consensus sometimes a concern? How does Matt approach market sizing? Why does it not matter at Series A? When does it really start to matter?
5.) Matt has said before that "backing sociopaths can work". What did he mean by this? What founder type does Matt most like to back? Does one have to manage the relationship with them very differently to other founder types? What are the acceptable risks vs unacceptable risks with this founder type?
Items Mentioned In Today’s Show:
Matt’s Fave Book: The Third Plate: Field Notes on the Future of Food
Matt’s Most Recent Investment: Finix
As always you can follow Harry, The Twenty Minute VC and Matt on Twitter here!
Likewise, you can follow Harry on Instagram here for mojito madness and all things 20VC.
Transcript
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| 0:00.0 | Welcome back. You are listening to The 20 Minute VC with me, Harry Stebbings at H. Stebbings, |
| 0:04.1 | 1996 with 2Bs on Instagram. It would be great to see you there. However, to the show today, and I've |
| 0:09.0 | actually been quite a fanboy of this individual's content for quite a while now. And then when I had |
| 0:13.1 | Josh Copperman on the show from first round, he said that he was one of the board members he most enjoys sitting on a board with. Then I knew that I had to make this episode happen. |
| 0:25.0 | And so with that, I'm very excited to welcome Matt Harris, partner at Bain Capital Ventures, |
| 0:30.7 | a leading US venture fund with a portfolio including the likes of LinkedIn, Lyme, Sendgrid, Jet.com, |
| 0:32.3 | and many more incredible companies. |
| 0:37.7 | As for Mad, he specialises in financial technology and services and has led investments in the likes of acorns, |
| 0:42.9 | OpenFin, Sig Fig, Ribbon and Bill Trust, just to name a few. And prior to joining Bain, |
| 0:47.6 | Matt founded Village Ventures, which he ran for 12 years, focusing on early stage fintech investing. |
| 0:52.2 | And fun fact, Matt manages to have done all of this, alongside being a father to six beautiful children, that is one busy man. But before we |
| 0:54.6 | dive into the show state, I have to talk about the company that's taken this ecosystem by Storm, |
| 0:59.2 | Brex, the company which built the corporate card for startups, and who is the fastest company |
| 1:03.3 | to reach unicorn status in history. Brex's founders, Henrique and Pedro, built a payments business |
| 1:08.1 | in Brazil, but kept getting rejected for a corporate card in the |
| 1:11.0 | States. So they built Brex, with no personal liability, up to 20 times higher card limits, and huge |
| 1:16.6 | rewards like 7x points on Uber and Lyft, 4x on Brex travel, and 2x on SaaS software. If you're |
| 1:22.6 | a VC-backed startup based in the US, see if you qualify for a Brex card at brex.com and get card fees waived |
| 1:28.9 | for life by entering the code Harry during sign-up. And before Brex, the consumer experience |
| 1:33.5 | for corporate cards was broken, and it's the same for bookkeeping. I doubt you started a business |
| 1:37.7 | to track financial statements or make cash flow spreadsheets. However, now we have pilot, and pilot |
| 1:42.4 | for bookkeeping gives you back the freedom to |
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