View All

20VC: The Robinhood Memo: The Early Metrics That Showed Robinhood was a Breakout Company & The Cost Structure of Robinhood in the Early Days and Why it is a More Efficient Business than eTrade with Rick Yang and Scott Sandell @ NEA

The Memo

Jan 27, 2022

Posted by

Scott Sandell is the Managing General Partner of NEA, one of the leading firms of the last 3 decades with now close to $24Bn under management and a portfolio including Salesforce, Robinhood, Plaid, Databricks and more. As for Scott, since joining the firm in 1996 he has led investments in Salesforce.com, Tableau Software, WebEx and Workday and serves on the board of Robinhood, Cloudflare, Coursera and Divvy to name a few.

Rick Yang is a General Partner and Head of Consumer Investing @ NEA, since joining in 2007 he has led investments in the likes of Masterclass, Plaid, Robinhood and many more.

In Today’s Episode with Scott Sandell and Rick Yang You Will Learn:

1.) How Rick came to meet Vlad, Robinhood Founder, for the first time? What impressed Rick most in that first meeting? How did the internal discussions proceed at NEA? Was it a unanimous decision to make the investment?

2.) The Market:

How did Rick and Scott evaluate the market at the time? Bottoms up, top down?
How did the market change and evolve both in ways they did and did not expect?
How do Rick and Scott evaluate market timing risk today when investing?
How did Rick and Scott approach outcome scenario planning with Robinhood?

3.) The Traction:

What core signals and datapoints made Rick realise Robinhood had product-market-fit?
How did Rick and NEA analyse Robinhood’s early organic customer acquisition? How did the board advise on how to spend their first marketing dollars?
How does the cost structure of the business compare to Charles Swaab and eTrade? Why is Robinhood such a superior model?

4.) The Team:

How has Vlad evolved and developed as a leader over time?
How did Vlad handle the 36 hours in Feb 2021 when he had to go and raise $3BN+?
Who is the unsung hero of the Robinhood team? What have they done to deserve this?