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May 24, 2021

QED Investors Co-Founder and Managing Partner Nigel Morris on the Twenty Minute VC Podcast

QED Investors Co-Founder and Managing Partner Nigel Morris joined Harry Stebbings on The Twenty Minute VC podcast.

Nigel discussed his journey from co-founding Capital One Financial Services in 1994 to his current role with QED, which has invested in 150 companies, backed 19 unicorns and has $2 billion AUM.

Listen to the full episode here

Here are eight insights from the episode. Be sure to check out the full discussion to dive much deeper.

On the success of Capital One:

If I ever write the book on QED, I’ll make out that it was very thoughtful and I had laid out a strategic plan, then I flawlessly executed against it. It’s been a journey of me putting one foot in front of another and figuring it out day by day. The Capital One experience was absolutely amazing. I wouldn’t change it for the world.

On developing QED from a family office:

I stood at the banks of the proverbial Rubicon for some time recognizing and with clarity, knowing that I would now have a boss and the boss was going to be my LPs and that this was no longer a hobby and a folly. This was now a business. I linked arms with Frank [Rotman] and Caribou [Honing] and crossed that Rubicon. It’s been great since then.

On financial stability:

I’ve been incredibly lucky in that I’ve been able to create escape velocity economically for myself and my family. And in the early days, it was about just having enough money to be able to travel a little bit and not to worry about money. The basic Maslovian stuff of feeding the family. And then it was getting to ‘F-you’ money, whatever that is.

On staying with founders through the good times and the bad:

It’s much easier to turn 4x into 5x than turn 0x into 1x. But this is not stock-picking. It’s not about just picking the team to go into the field. Part of the quid pro quo of that really deep relationship is that you are willing to engage all the way through the journey from a seed to IPO.

On his personal winning versus losing mentality:

If I have a failing here, it is that I do not give up. I am absolutely maniacally tenacious. And if I buy into something, I hate to lose the fear of losing. And the pain from losing is much greater than the euphoria of winning.

On companies neglecting unit economics in favor on high net promoter scores and low customer acquisition costs:

It is far too much of a Promethium leap where you say, ‘I’m going to just get loads of customers. They’ll love me. And then I’ll figure out how to make money down the road.’ That usually ends in tears. It usually ends with down rounds, and then you’re fighting this losing battle internally of to tell people why they should stay with you on the journey.

On the changing mentality in the bank boardrooms:

There are very few, if any, digital deniers anymore. Five years ago that people were saying, ‘this is a flash in the pan is not going to work. This whole fintech thing is tulips in Amsterdam.’ Very few of them now saying, ‘look, we’re going to be able to out-compete the Plaids and the Credit Karma’s and the Squares of this world. So they’re now in the mood to engage in a way they weren’t in the past, but now they’re struggling with how do they engage?

On the need to destigmatize discussing mental health issues:

We tend to not talk about it. And I say all the time that if I ever have a sore arm or sore shoulder, I’ll come into work and I’ll whinge about it. But if I couldn’t sleep last night or I’m paranoid about going outside or I’ve been taking substances I shouldn’t take, I won’t talk about it. I’ll say that I’m going to my doctor to get my shoulder fixed, but I won’t say I’m going to talk to my therapist and it’s massively stigmatized.