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The Full Ratchet

Investor Stories 464: Anti Portfolio Confessions: Missing Twilio, Zoom, DocuSign, MongoDB, and Solana (Austin, Simpson, Chaddha)

6 min episode · 2 min read
·

Episode

6 min

Read time

2 min

Topics

Investing, Startups, Fundraising & VC

AI-Generated Summary

Key Takeaways

  • "Solved Problem" Bias: Naveen Chaddha passed on both Twilio and Zoom by categorizing them as already-solved markets. Investors should stress-test this assumption by asking whether existing solutions are genuinely good enough, not merely whether they exist.
  • Founder Conviction Over Idea Evaluation: Chaddha's framework evolved after missing multiple breakout companies — he now prioritizes identifying "black swan" founders and disregards initial ideas entirely, recognizing that exceptional operators pivot and adapt regardless of starting conditions.
  • Multistage Firms Can Correct Early Mistakes: Ariana Simpson notes that a16z re-entered Solana after initially passing, turning a missed seed into a still-early position. Multistage fund structures create a second-chance mechanism that single-stage seed funds structurally cannot access.
  • Humility as an Active Investment Process: Simpson frames mistake-correction as a deliberate discipline — investors must continuously reassess prior conclusions because being right about a specific concern at one moment can still produce the wrong long-term outcome if founders subsequently resolve that concern.

What It Covers

Three VCs from Outside VC, Andreessen Horowitz, and Mayfield confess to passing on Twilio, Zoom, DocuSign, MongoDB, Solana, and Kin — revealing the cognitive patterns behind each missed investment.

Key Questions Answered

  • "Solved Problem" Bias: Naveen Chaddha passed on both Twilio and Zoom by categorizing them as already-solved markets. Investors should stress-test this assumption by asking whether existing solutions are genuinely good enough, not merely whether they exist.
  • Founder Conviction Over Idea Evaluation: Chaddha's framework evolved after missing multiple breakout companies — he now prioritizes identifying "black swan" founders and disregards initial ideas entirely, recognizing that exceptional operators pivot and adapt regardless of starting conditions.
  • Multistage Firms Can Correct Early Mistakes: Ariana Simpson notes that a16z re-entered Solana after initially passing, turning a missed seed into a still-early position. Multistage fund structures create a second-chance mechanism that single-stage seed funds structurally cannot access.
  • Humility as an Active Investment Process: Simpson frames mistake-correction as a deliberate discipline — investors must continuously reassess prior conclusions because being right about a specific concern at one moment can still produce the wrong long-term outcome if founders subsequently resolve that concern.

Notable Moment

Chaddha passed on Zoom partly because he had worked on video conferencing fifteen years earlier and assumed the problem was settled — a case where deep domain experience directly produced overconfidence and a costly miss.

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Episode Transcript

Today's episode of TFR is brought to you by .techdomains. The right .com is usually taken, and adding extra words weakens your signal. I see thousands of decks every year, and a clean domain still matters. That's why founders choose .tech. It's simple, modern, and sends the right signal. Secure your .tech domain early. And this episode of TFR is brought to you by the American Arbitration Association, where smart startups and investors turn for fast, efficient, and cost effective dispute resolution. Visit adr.org/tfr to learn more. Now here's the episode. Welcome to the podcast about venture capital, where investors and founders alike can learn how VCs make decisions and reach conviction. Your host is Nick Moran, and this is the full ratchet. Welcome back to TFR. On today's special segment, we ask guests to discuss their anti portfolio, a start up investment that they passed on. Here's the segment called why I passed. On today's special segment, we have Ethan Austin of Outside VC. Can you tell us a story about a startup that you passed on, your anti portfolio? Yeah. Sure. One of my LPs, started a company called Kin, and he had gone through, Techstars Chicago with me back in 2010, a guy named Sean Harper, And one of our other buddies, Sheel, at Better Tomorrow Ventures, was an investor, and he said, hey. Invest in this company in the seed round. And I I think I just didn't have any money at the time. But, I I wish. I mean, I I just saw, they just raised at a $2,000,000,000 valuation, I think, a couple weeks ago and, missed on that one, which which would have been a nice one to have invested in. There there's a lot. The the anti portfolio tends to be larger than the the than the portfolio, but but that was one that really hurt. On today's special segment, we have Ariana Simpson of Andreessen Horowitz. Can you tell us a story about a startup that you passed on? One thing we think a lot about is correcting our mistakes, where possible. In some cases, it's certainly not possible because the opportunity has passed. But I think, you know, we, erroneously passed on the very early round of Solana. I think at the time, you know, we had some questions about the architecture and a number of other things. The reality was that the team executed extremely well. And so, you know, not long thereafter, we were able to kind of correct our mistake and, you know, still still join the join the bandwagon a little bit later than we would have liked, but still early in the grand scheme of things. But I think, you know, that and I give a lot of credit to, my colleague Ali for this. It requires a certain dose of humility as an investor to kind of be willing to say, oh, shit. Like, I was I was totally wrong about that, and, I …

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