Harry Stebings hosts Nick Bime, a partner at Venroc, on episode 64 of the 20 Minutes VC podcast. Bime, who has a background with Matrix Partners and experience at McKinsey and Goldman Sachs, discusses his venture investments in consumer internet and big data companies, such as Guilt Group and DataMiner. He emphasizes the importance of impact investing and its potential for significant social benefits alongside financial returns. Bime also highlights the challenges female founders face in securing VC funding despite progress in the industry. He predicts a rise in impact investing, stressing the need for measurable impact metrics. Additionally, Bime contrasts the startup ecosystems of New York and Silicon Valley, noting New York's strength in applied technology and its position as a major hub for various industries. The conversation touches on hiring practices, with a nod to Hiring Screen's innovative data-driven approach, and concludes with Bime's insights into his investment philosophy and a teaser about his latest stealth-mode fintech venture.
Hello and welcome to episode 64 of the 20 Minutes VC with your host Harry Stebings on today's show.
This quote opens the podcast episode, introducing the host and the series.
Nick is a partner at Venroc, where he focuses on Internet, mobile, SaaS, big data and fintech investment.
This quote introduces Nick Beim and outlines his investment focus areas.
In 2011 Nick was named by Forbes as one of the elite eight to watch in venture capital.
This quote highlights Nick's recognition by Forbes in the venture capital industry.
Sure. I got into the venture industry serendipitously and rather unexpectedly.
Nick Beim describes his unexpected entry into venture capital.
I ended up finding a better offer, a more interesting offer, and I informed the venture firm that had been courting me that I was going to take the offer.
Nick explains how he ended up with a better opportunity at Matrix Partners after exploring other offers.
The better option was Matrix Partners, a firm that I was a partner at for twelve years.
Nick mentions his duration at Matrix Partners before moving to Venroc.
I think New York has really become, by a significant margin, the most exciting startup hub on the east coast.
Nick shares his view on New York's prominence in the startup world, influencing his move.
Data miner is in the business of real time information discovery.
This quote summarizes Dataminer's core business function.
They effectively discover news before it's news.
Nick explains Dataminer's capability to identify significant events before they are widely recognized.
Someone once said the future is unevenly distributed I think knowledge of the present is also unevenly distributed.
Nick reflects on the distribution of information and Dataminer's role in balancing that distribution.
They just can't compete with this kind of information.
Nick comments on traditional news sources' inability to compete with Dataminer's real-time information service.
They had identified the assassination of bin Laden 28 minutes before Bloomberg in the New York Times.
Nick highlights an example of Dataminer's capability to detect major events before mainstream news outlets.
"So it was a super competitive financing. It happened very fast. I feel very lucky to be working with the team." This quote by Nick Beim reveals the competitive nature of the financing round for Dataminer and his enthusiasm for being involved with the company.
"But in the early days, they want help building a team." Nick Beim points out that early-stage startups like Dataminer prioritize assistance in building a strong executive team to grow the business.
"They really wanted to find someone who was super collaborative, so very thoughtful, no table pounders, no egos." Nick Beim emphasizes the importance of a collaborative and ego-free investor to match Dataminer's company culture.
"It was their first institutional round." Nick Beim clarifies that he joined Dataminer during their first significant round of institutional investment.
"The beta customers loved the product so much that they insisted on investing." Nick Beim shares an anecdote that illustrates the high value beta customers placed on Dataminer's product, leading them to become investors.
"I do think it still is harder for female entrepreneurs to raise money, and it's sort of an uncomfortable truth in the industry." Nick Beim acknowledges the ongoing difficulty for female founders to secure venture capital funding, despite improvements in the industry.
"I think venture capitalists, when you really get down to it, invest primarily on the basis of pattern recognition." Nick Beim explains how the reliance on pattern recognition in venture capital has historically disadvantaged female founders due to a lack of precedent.
"It's about a $60 billion pipeline of very successful female founded companies, including Epic systems, Theranos, eventbrite, Howes, Gilt, many others." Nick Beim expresses optimism for the future, citing the significant value of successful female-founded companies that could change investor patterns.
"I think it's great to talk about it." Nick Beim advocates for open conversations about gender imbalance in tech as a way to address the issue.
"I think once people start to think about it, it will limit the bias of a lot of the players." Nick Beim believes that awareness and consideration of the issue can help reduce biases among investors in the tech industry.
"So what is impact investing? It's for profit investing that also seeks to have a positive social impact."
This quote defines impact investing as investments made with the intention of generating financial returns while also creating a positive impact on society.
"And interestingly, I think some of the most promising impact investments are Internet companies and specifically new platforms that provide opportunity for people to make money or save money or have opportunity that they otherwise wouldn't have had."
This quote highlights the potential of Internet companies and platforms as vehicles for impact investing, due to their ability to create economic opportunities for a broad user base.
"I think the last piece of the puzzle that's really required for the impact investing industry to boom, and I think this will be coming, is measurable impact metrics."
This quote emphasizes the necessity of developing measurable impact metrics to evaluate and drive the growth of the impact investing industry.
"I think job creation in a specific country, and maybe high wage job creation, really sustainable job creation that will help generate wealth for those who haven't had opportunity, is really important."
This quote suggests job creation, particularly high-wage and sustainable jobs, as a key metric for measuring the success of impact investments in international development.
"I think in environmental areas you can look and increasingly measure environmental impact of what a company does."
This quote points to the environmental sector as an area where the impact of a company's actions can be increasingly measured, indicating progress in the development of metrics.
"And NROC is not planning an impact investing fund anytime soon. I'll certainly post you if that changes."
This quote clarifies that Venrock, referred to here as NROC, does not have immediate plans for an impact investing fund, but Beim remains open to future possibilities.
"And I helped them create a fund that is a great impact investing vehicle to invest in those entrepreneurs. And the returns have actually been great."
This quote describes Beim's direct contribution to impact investing through the creation of a successful fund that supports entrepreneurs in developing countries.
"I think the biggest difference between New York and Silicon Valley is that New York is fundamentally an applied technology ecosystem."
This quote contrasts New York's focus on practical application of technology in various industries with Silicon Valley's foundation in core technology and engineering education.
"Today you can do it over a weekend for less than 2000. And certainly to scale, it takes great engineering. But I think that change has been a fascinating global one."
This quote highlights the reduced barriers to entry for starting a technology-based business, pointing to a global shift that has empowered a broader range of entrepreneurs.
"So great design talent, great marketing talent, for example. But also it is the world capital for many major industries or a major capital." "Having vested in guilt when it was just three people, I can promise you you could not have built that company to the same degree of success in the west coast." "I think there's certain areas, certain industries that certain types of companies that New York will be very good at." "And if you look at the numbers, it's been the fastest growing tech ecosystem in the country over the last ten years and it's still growing amazingly quickly."
These quotes emphasize the concentration of talent and industry in New York, which contributes to the success of local companies and the growth of its tech ecosystem.
"I think for companies that are working very well, there's no major difference." "I think the companies that get the biggest valuations are companies that are working extraordinarily well." "So maybe a bit higher on the west coast for the earlier stage, but I don't see huge differences."
Nick Beim suggests that successful companies can achieve similar valuations regardless of location, although some differences exist at the earlier stages due to founder backgrounds.
"I think Mike Moritz has been very successful at Sequoia." "I was very impressed with what Fred Wilson had done without the existing platform or assets that some of the long standing west coast."
Nick Beim acknowledges the achievements of both Mike Moritz and Fred Wilson in the venture capital space.
"There was a book that had a big impact on my life and it was under $100. It was man's search for meaning by Viktor Frankl."
Beim shares that Viktor Frankl's book, which delves into finding purpose and happiness, was an influential read for him.
"Finding exceptional, off the charts individuals with."
This quote captures Beim's focus on the exceptional talent of founders when making investment decisions.
"I'm intellectually attracted to longer form thought pieces that are eye-opening, kind of contrarian, non obvious." "I like Reed Hoffman's blog and absolutely brilliant."
Beim expresses his preference for in-depth, insightful content that challenges conventional thinking.
"My most recent investment is a big swing fintech idea, very big swing that is currently in stealth mode." "The two founders were just astonishingly talented."
Beim shares his enthusiasm for his latest investment, highlighting the founders' talents and the potential for significant industry disruption.