David Frankel, MP @Founder Collective: Investing Lessons from Seeding Coupang, Pillpack & Suno|E1214

David Frankel is the Co-Founder and Managing Partner of Founder Collective, one of the best seed firms of the last decade. David has led rounds in companies such as Suno, Coupang, SeatGeek and PillPack (sold to Amazon for ~$1B). Previously, David was Co-Founder and CEO of Internet Solutions (IS), the largest ISP in Africa, ultimately acquired by NTT Japan. David has been named to the Midas List six times. In 2023, he was #11 and in 2024, he appeared at #15 on the Midas List of the world's best venture capital investors and at #2 on the Midas list of seed investors.
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Timestamps:

(00:00) Intro
(00:50) Massive Seed Rounds: How Can Traditional Seed Funds Compete?
(05:47) Do Founders Understand Venture Today?
(07:38) How Fast David Spots a Bad Company?
(09:27) Why Are Reserves So Hard in Venture? David's Key Lessons
(15:08) First-Time vs. Second-Time Founders
(17:25) Why Does David Call Pro-Rata the Original Sin of VC?
(24:14) Has DPI Died in 2024? Is PE the Answer for VC Exits and Liquidity?
(27:39) Why Are LPs Frustrated with VCs, and What Will Change It?
(34:36) Should Seed Funds Actively Navigate Secondary Markets for Exits?
(37:42) IPO Strategy: When to Sell & How to Distribute Effectively?
(40:24) What is Leech?
(47:48) Does AI Shift Your Beliefs on Capital Efficiency & Small Rounds?
(53:10) Will AI Spawn New Giants or Consolidate Power in Existing Titans?
(58:25) David's Biggest Losses: How Did They Change His Investment Mindset?
(01:02:29) Advising Founders on Secondaries
(01:10:18) How to Be a Great Board Member
(01:11:51) Biggest Lesson on Dilution
(01:16:31) The Small Fund vs. The Big Fund
(01:22:55) Quick-Fire Round
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10 Questions With One of the World’s Best Seed Investors:

1. Reserves: Why are reserves the hardest part of venture? What have been David’s biggest lessons in how to do them well?

2. Why does David believe that pro-rata is the original sin of VC?

3. Has DPI died in 2024? Is PE the salvation for the VC exit market and liquidity?

4. Why does David believe LPs are so pissed of with VCs right now? What will change that?

5. When will IPO markets open? Are M&A markets shut? What would cause them to open?

6. How does David reflect on price today? When will he pay up and break his rules?

7. Biggest lessons for David on knowing when is the right time to sell? Why does David believe you should never sell your winners? What has David sold that he regrets most?

8. What companies returned the most to Founder Collective Funds? Uber? Coupang? Airtable? The Trade Desk? What did he learn from those mega hits?

9. What have been David’s biggest losses? How did losing the company change his mindset and approach to investing?

10. What does David believe is the future of venture capital? How can seed funds play in a world of mega multi-stage funds? Who wins? Who loses?
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