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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/