The Full Ratchet (TFR)
With Micah Rosenbloom, Managing Partner, Founder Collective
Photo via foundercollective.com
Most people guess the bar for one of the 500 largest venture exits of the last 25 years sits in the billions. It's actually about $700 million.
Micah Rosenbloom and his team at Founder Collective ran the numbers anyway, expecting a tidy set of patterns to emerge from fifteen-plus years of the firm's own investment history. What they found instead was closer to the opposite of a pattern.
"I think the most surprising thing I find is there aren't very many parallels... it's just how random it is." — Micah Rosenbloom
Micah Rosenbloom, managing partner at Founder Collective, told host Nicholas Moran on The Full Ratchet that the firm's entire portfolio-construction philosophy is built around that randomness, not against it. Micah co-founded three companies before Founder Collective, including Brontes Technology, which 3M acquired, and the firm's checks have landed in Uber, The Trade Desk, Whoop, Suno, Shield AI, Airtable and Coupang.
The full interview is covered here so you can skip it.
Here are the 8 numbers that matter.
Key Takeaways
The bar for a top-500 VC exit in 25 years is about $700 million, not billions
Ranked by current market value, the top five exits are bigger than the next 495 combined
Smaller checks have outperformed larger ones because they buy more shots on goal
Founder Collective almost missed Uber over a $5,000 gap between its minimum check and what the company could accept
A $200-300 million exit changes a founder's life and is "meaningless" to VCs chasing fund-movers
Rosenbloom sold his own company for $95 million
Picking is only about a third of returns; portfolio construction another quarter to a third; knowing when to sell is 10-15%
Rigid ownership targets ("only invest if we can own 20%") create adverse selection
The firm's unfashionable consumer portfolio is outperforming on revenue, which he reads as the same dislocation working in reverse
Historically small funds raising past $1 billion worries him
"It's like you went from being a food company to a software company"
He calls himself a deliberate "wave two" AI investor, betting the real payoff comes after the obvious use case, the way Uber rode mobile GPS rather than inventing ride-hailing
1. Why He Writes Almost Daily
Host Nicholas Moran introduces Rosenbloom as a managing partner at one of the original "OG" seed-stage firms, now investing out of its fifth sub-$100 million fund. The two trade some Chicago sports banter first.
"OG is just a nice way to say old, isn't it?" — Nicholas Moran
"There aren't many of us in venture capital that follow the Bears." — Micah Rosenbloom
He's published an essay two to three times a week for about a year
The trigger was realizing that about half of Founder Collective's inbound deal flow now comes from people one degree removed from the firm's existing network. He thinks of venture capital as a "mid-funnel nurturing business," with LinkedIn as the main channel. He's candid that it's partly content marketing and partly therapy.
"In venture capital, everything is a B activity except investing in great companies and working with those companies." — Micah Rosenbloom
He credits that line to his longtime partner Eric Paley. He's also candid about using AI in the process.
"Even though I do use my good friend Claude, it's really my brain and my editing and my ideas — Claude has been an accelerant." — Micah Rosenbloom
