Category: Venture Capital

The “Middle Zone” of VC Deals

While the venture industry thrives on standard pattern recognition, outlier outcomes often lie in narrative violations of these patterns. But how does one spot these diamonds hiding in plain sight?

As I was analyzing some patterns in the kind of deals I was seeing over the last few months, something stood out. Most deals that I see tend to fall into 3 buckets:

#1 Clear “No” – it’s clear that there is a lack of mutual fit. Easy to move on.

#2 Clear “Yes” – I want to thump the table and invest. The bar for this is high and therefore, deals in this bucket would be max. 1-2 per quarter.

#3 Not sure – I like a few things about the opportunity but also see major question marks in other areas.

Bucket #1 accounts for the majority of any VC’s deal flow. A typical investor will evaluate hundreds of deals in a year and will invest only in a handful. So the VC job description itself is to reject at scale and anyone in the industry either already has or goes on to develop the mental capacity to do this.

Bucket #2 is a dream for any VC as these deals inspire high internal conviction in a very organic way. Though this conviction may or may not align with what other investors think, still one feels great about doing such deals as strong VC investors tend to be independent thinkers and follow their internal compass. If this conviction also aligns with other high-quality investors, then even better! Examples of this Bucket that I have seen in my career include Lenskart, Delhivery, and (I would like to believe) a majority of the Operators Studio portfolio.

Bucket #3 is what I call the “Middle Zone” of venture deals. In these opportunities, there are some things to intensely like and also a few question marks to temper these positives. Some personas of the Middle Zone from my recent deal flow include:

  • Strong founder going after a bad market.
  • A talented founder but weak founder-market fit.
  • A market with massive tailwinds, but weak founder-market fit.
  • A pedigreed founder who has just stepped out of a Big Tech, only with an idea and zero traction.
  • A very young (therefore, generalist) founder, often <2 years out of undergrad, with a limited track record and/or traction to diligence on.
  • A startup that has been around for a while and is now raising a bridge.
  • While I am not really “feeling” the opportunity, someone who I rate highly/ who understands the space deeply/ has spent a lot of time with the founders, and has high conviction/skin in the game.

As a venture investor, I am spending a lot of time thinking through the best way to identify & evaluate these Middle Zone deals. While the venture industry thrives on standard pattern recognition (repeat founders, domain expert founders, young generalists, ex-Stanford founders, co-investing with Tier 1 VCs etc.), outlier outcomes often lie in narrative violations of these patterns.

As an example, in my post ‘Three unicorns and a VC‘, I wrote about how Amagi was an unpolished diamond hiding in plain sight that most venture firms missed. I don’t want to miss the next Amagi that comes to me!

As accomplished angel & now VC investor Ben Narasin once said on a podcast:

There are deals we should do, there are deals we shouldn’t do, and then there are the ones in the middle. We make all our money in the middle ones.

-Ben Narasin

The fact that Middle Zone deals are non-obvious makes them less competitive and therefore, inefficiently priced, lending them well to giant outcomes when the bet turns out to be right. Hence, every VC investor worth its salt needs to have some mental models and heuristics in place to deal with them.

Here are some high-level guiding principles I have learned and am using for Middle Zone deals (more detailed heuristics are my secret sauce😉):

Middle Zone CaseApproach
Strong founder going after a bad market.Mike Maples of Floodgate says (paraphrasing) – “A strong founder will ultimately pivot to a good market”.

My investing style is founder-first. So, strong founders going after supposedly bad markets are fair game for me. Though I would definitely try and ask – “If this founder is strong, why has she chosen this market to begin with?”

Also, I don’t find spending time on market sizing at the seed stage to be particularly beneficial. For why I believe this, check out my post ‘The TAM Fallacy At Seed Stage‘.
A talented founder but a weak founder-market fit.If a founder is strong but the founder-market-fit is weak, I try and answer the question – “Can this market be won by first-principles thinking and hustle?”.

Many areas in Consumer Internet and Enterprise Software lend themselves well to young generalists, while areas like hardware can be excruciatingly painful to execute on and require a founder persona who is prepared for it.
A market with massive tailwinds, but weak founder-market fit.This one is tricky. A working POV is that a “hot” market will get crowded very quickly and therefore, a founder without a clear right-to-win in it will struggle to build a large, enduring business.
A pedigreed founder who has just stepped out of a Big Tech, only with an idea and zero traction.This case needs all art. Every context will be different but as an approach, important to understand:
(1) Backstory of identifying the problem statement and leaving a cushy job to start up.

(2) Personal life story – motivations, adversities, aspirations, chip-on-shoulder.
A very young (therefore, generalist) founder, often <2 years out of undergrad, with a limited track record and/or traction to diligence on.Again, this stage is all art. I like to look at 3 things here:
(1) Does the founder fit a few “spiky” personas I like to back? A few I have written about before include storyteller vs scrapper and engineering dhandho. I would also include the college builder/hacker in it. A catch-all I like to use for these personas is born-to-be-founder.

(2) Does the market they are going after lend itself well to young generalists?

(3) Has the founder been able to acquire some early users/ customers that I can speak with?
A startup that has been around for a while and is now raising a bridge.While I am not really “getting” the opportunity, someone who I rate highly/ who understands the space deeply/ has spent a lot of time with the founders, has high conviction/ skin-in-the-game in the opportunity
While I am not really “feeling” the opportunity, someone who I rate highly/ who understands the space deeply/ has spent a lot of time with the founders, and has high conviction/skin in the game.Like Paul Graham with Airbnb or Fred Wilson with Coinbase.

This will vary a lot by context but as I said in my post ‘An Investing Framework to Find Startup Diamonds‘, one way of sourcing high-signal-non-consensus opportunities is (quoting the post): “a respected investor, sometimes a domain expert, has taken the time to evaluate & build high conviction around the company. Or a visionary customer is taking a bet, partnering with them in building the early product”.

While evaluating these signals, especially when they are from other investors, I find it useful to ask: “Is this deal amongst this investor’s best ideas?“.

I know that’s a lot to digest so let me give you the TLDR of what all the above analysis is trying to say:

Given Power Law, the most important thing in venture capital is getting into the companies with monster outcomes. Only the hits matter.

Based on history, many of these monster outcomes looked like weird companies in the beginning. Hence, having a strategy to sift these out of the Middle Zone is what gives a VC the Midas touch, and what at least I aspire for.

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Anti-Social Proof

In the words of the great Fred Wilson – “If you can’t figure out why you like an investment and why it will be successful, don’t make it”.

Recently, I came across this awesome (like always!) 2012 post from Fred Wilson (Union Square Ventures) – Social Proof Is Dangerous. Quoting a line that captures its essence:

If you can’t figure out why you like an investment and why it will be successful, don’t make it.

One of the big investing ideas I have distilled from studying the best investors across asset classes – from Charlie Munger and Howard Marks to Bruce Flatt and Vinod Khosla, is that to outperform the average (the index), one has to be “non-consensus-and-right”.

In fact, in my July’23 post ‘An Investing Framework To Find Startup Diamonds‘, I outlined a Consensus vs Signal 2×2 and argued that the outlier venture returns opportunities tend to be found in the High-Signal-Non-Consensus quadrant.

Source: An Investing Framework To Find Startup Diamonds

It was only in 2022, almost a decade after I first started my career as an institutional VC, that I truly embarked on this journey of trying to become a non-consensus-and-right venture investor. As I have outlined in the above 2×2, molding my mindset toward this approach has required consciously working on the following 2 elements:

1/ Having a unique world-view and trusting my instincts to be able to spot ‘Signal’.

2/ Totally ignoring any social proof noise while doing this.

I have observed that while it was really hard to ignore social proof early on in my career (eg. which VC is leading the deal), having seen so many Tier 1 VCs across geos do such foolish things over a decade, I must say with much humility that as of today, I find it much easier to ignore their POVs on something.

A few months back, I also came across comprehensive LP data that validates this organic learning. David Clark of VenCap shared with Jason Calacanis how loss ratios are surprisingly similar across various percentiles of funds, and even the best strike out a lot.

That’s why in my view, it’s foolish to do one-off deals purely on the basis of the social proofing of a lead investor in that deal unless one is actually replicating their entire portfolio construction (which is a benefit only LPs in their Funds get).

This idea also explains why I remain skeptical of loose angel networks, angel communities, and syndicates that really don’t have a unique, grounds-up world-view and right-to-win, and therefore in most cases, do spray-and-pray on allocations in deals being done by VCs.

These deals often suffer from major adverse selection (“if the founder/ startup is so good, why are they raising from you?” OR “what specific value are you bringing to the table because of which a star founder is giving you allocation?”) and are therefore, likely to be on the wrong side of the loss ratios of major funds.

Coming back to the point of social proof, let me neatly summarize my POV on it:

  • If the best Tier 1 VCs are striking out as much as an average Joe VC, there is no value in blindly following them.
  • There could be value in investing in the “best” companies of a Tier 1 VC portfolio but especially at the seed stage, it’s impossible to know beforehand which company will turn out to be this “best” company. Also, companies keep going in and out (and back in) of this “best” bucket multiple times anyway during a Fund’s 10-year lifecycle.
  • Even if there was a way to know which company is indeed the best company in a Tier 1 VC portfolio, why would they give me allocation in it? The best VCs want to keep every bps of ownership in their best companies only for themselves.

Hence, what’s the point of doing a deal purely because of social proof? I would rather spend that effort looking for the best contrarian deals in places where no one is looking, doing the work (and trusting my instincts) to spot Signal in them, and investing in them as early as possible, driven only by my strongest conviction and nothing else.

This approach is already starting to reflect in the early Operators Studio Fund 1 portfolio. In a majority of recent investments (eg. Soulside, Confido, Loop, Astrophel Aerospace, and a recent one in Stealth), I was literally the first investor to build conviction and say “yes” even before the round started coming together with other VCs. In several of these deals, I ended up catalyzing the round itself, making intros to eventual lead investors and even sharing my customer diligence notes with VCs evaluating the company.

In a way, this approach is Anti-Social proof and Pro-Signal. What is Signal, you ask? It can be of two types, as I explained in my July’23 Investing Framework post (quoting from it here):

  • Internal – extraordinary founder-market fit eg. the founder has spent a decade just going deep in the field. Or a backstory that provides an authentic “why” behind pursuing this idea. Or an execution track record in the startup’s arc that is outstanding on important elements like capital efficiency, iteration velocity, or organic customer acquisition.
  • External – eg. a visionary customer is taking a bet, partnering with them in building the early product. Or a domain expert, skilled operator, perhaps even a specific GP in a venture firm, has taken the time to evaluate & build high conviction in the company.

As you can see, there is a little bit of social proofing baked into evaluating Signal too, but it’s much more oriented around operating and execution-oriented conviction vs deal FOMO and an investing herd mindset.

As you churn on this post, here are more POVs on this topic from some really distinguished venture investors over the years (Source: a 13-year-old Quora post titled Is social proof a rational approach to investment selection?)

1/ Roger Ehrenberg (Founding Partner – IA Ventures, one of the best-performing seed funds of all time)

2/ Naval Ravikant (Co-founder – AngelList, one of the best angels of all time)

3/ Dave McClure (Founder – 500Startups, now running PracticalVC)

Additional readings: The Death of Social Proof by Hunter Walk (Co-founder of a very successful seed VC Homebrew).

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Tips & Insights For Emerging VC Managers – Notes From Camp Hustle’24

My notes from attending Camp Hustle, a unique LP-GP gathering. Includes actionable tips for those raising Funds 1 and 2.

It was a great experience to attend Camp Hustle last week. I have been following the work of Elizabeth Yin (co-founder of Hustle Fund, a pre-seed fund that organized this event) on X for some time now. All this while, I kept seeing posts from the last 2 editions of the event.

This time, I was in town, in a relationship-building zone, and looking to add new and interesting LP-GP folks to my community. So, I landed up at the event (who would say no to spending 2.5 days in the idyllic surroundings of Los Gatos and Saratoga anyway!).

Honestly, I didn’t arrive with a specific agenda or expectations from the event. I just went in with an open mind and knowing the vibe of the Hustle Fund team, I instinctively knew this would likely be the best frame of mind for this gathering.

The event turned out to be a pleasant surprise. Now I know why the name has the word “Camp” in it – the entire event had an informal, outdoorsy, campy, yet energetic and authentic vibe to it. Everyone agreed to an informal social contract – no explicit pitching, no so-called networking and no shallow talk. Everyone bought into the idea of just getting to know a bunch of folks and really bringing their whole, authentic selves to the event.

While the free-flowing, candid conversations amidst nature were the highlight of the event, I did end up with some really actionable insights shared by the Hustle Fund team, other emerging managers as well as a few LPs. Sharing my notes below:

1/ Fundraising for emerging fund managers – via Charles Hudson (Precursor Ventures) and Virginie Raphael (Full Circle)

  • While interacting with potential LPs, focus on making them a “fan” of the fund first. That is the first step towards eventually converting to an LP.
  • One common mistake during fundraising as a first-time manager is chasing people too aggressively. The key is to put out your story and let people come to you.
  • A great way to engage potential LPs is to send out a monthly/ quarterly newsletter. Also, Virginie mentioned doing informal LP meets in the Spring and Fall, so folks stay connected with the fund.
  • The majority of potential LPs you meet today might eventually invest in Funds 2 and 3. So, it’s important to start building relationships from now.
  • I asked Charles a question on ways to increase conversion on warm intros that a GP gets via existing LPs. While intuitively one might expect a healthy conversion on this type of lead, Charles confirmed that in his fundraising experience, the conversion on these referrals was indeed lower than expected.

2/ Venture investing learnings from the Hustle Fund team

During an informal AMA, Hustle Fund co-founders Elizabeth, Eric, and Shiyan shared the following top venture investing learnings from their anti-portfolio:

  • Always bet on your friends.
  • Don’t penny-pinch on valuation (they passed on an initial round of one of the largest consumer Internet outcomes because of valuation).
  • “Good deals have legs” – when you like a founder, push as hard as possible to get into the deal. Don’t be afraid of being perceived as a pain, if it can help you get into the deal.
  • Don’t over-index on what a market or company looks like right now. Learn to imagine what the market or a company can become “over a period of time”.

3/ Tips from an institutional LP

Courtney McCrea (Co-founder of Recast Capital) is one of the most experienced institutional LPs out there. In a candid Bonfire Session, she shared some insightful tips for emerging managers:

  • During an LP pitch, don’t be afraid to talk about how great you are. In fact, spend the first 3 minutes in a pitch just talking about your unique superpowers.
  • If you are having trouble creating a unique narrative for why your fund is different, ask your portfolio founders why they picked you and how they would pitch you to their friends.
  • LPs look at who you co-invest with and who does follow-ons in your companies, as signals for the quality of your deal flow.
  • There are so many LPs out there who aren’t pitched very often. Try and focus on them to improve your odds. Don’t underestimate the amount of capital that is out there looking to be deployed.

4/ Other helpful convos

  • Matthew Stotts of Cerulean Ventures shared that outlining the 10-year vision and story of what the fund is looking to do, goes a long way in generating excitement as most LPs are looking not just for financial returns but also for impact in whatever their personal mission is.
  • To re-engage with potential LPs in your funnel, try going back to them when you have an interesting development or story to share from the portfolio (eg. “we invested in Company X at the pre-seed stage and now, 12 months later, they just cracked a $XMn ACV deal”). This could also be done with a new differentiated investment or interesting deal flow.
  • [Via Rahul Vohra, Founder and CEO of Superhuman] One of the best pieces of advice Rahul got while building Rapportive was to pick a strategy to go from Point A to Point B, never change your mind about it, and continue relentlessly executing it. The goal could be say reaching 1Mn users, $100k MRR, or any other metric. The key is to stick with it.

Hope these notes help emerging managers out there. Once again, thanks so much Team Hustle Fund for creating this unique event format. Am excited for the next one!

PS: For those in SE Asia, the next Camp Hustle is in Bali in September🏖️

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The TAM Fallacy At Seed Stage

The imagination of the best founders will kill any TAM analysis. Rather than over-fixating on market size, I suggest a couple of other elements that are more useful for evaluation at the seed stage.

As a freshly minted VC in 2011, one of the first things I was taught to look for while evaluating new deals was a large total addressable market (TAM). It was pretty much a necessary, though not sufficient, condition for generating outlier venture returns.

After many years of venture investing now, I would agree that startups need to go after large markets to be VC-fundable. However, I have also seen a common VC fallacy, especially at the seed stage, where a startup gets prematurely filtered out simply because the immediately visible market doesn’t seem large enough.

In my experience, the best founders either create new markets or expand to adjacent markets over time. So the TAM keeps growing. I remember when Peyush Bansal of Lenskart (the Warby Parker of India) was pitching for Series A, investors thought that the Indian eyewear market wasn’t large enough. In hindsight, everyone underestimated 3 things: (1) the overall market would grow at a much faster rate than expected, (2) in addition to online, Lenskart would also go offline and (3) it would expand the market by launching private labels, as well as increase its gross margins by in-house manufacturing. Lenskart’s last valuation: $4.5Bn!

Same with FirstCry, where most investors viewed the TAM as mostly Diapers because that was the majority of its GMV in the early stages. FirstCry is IPO-bound, likely at $3-4Bn valuation!

In the enterprise space, I remember Amagi’s initial flagship offering was the ability to insert vernacular TV ads in national programming. Investors pretty much checked out when they sized up this niche. What they underestimated was Amagi’s ability to go global, expand its product offering to an end-to-end cloud platform, and serve the rising OTT market. Amagi’s last valuation: $1.4Bn!

Airbnb was a similar case. Paul Graham has shared the now-legendary email thread where Fred Wilson of USV felt its addressable market wasn’t big enough.

Source: SUBJECT: AIRBNB

The entire thread is super-insightful, wherein PG is repeatedly trying to explain to Fred that the eventual market will include hotel accommodations and therefore, will be large enough.

Source: SUBJECT: AIRBNB

In fact, one of the strategies that is highly recommended for seed-stage startups is to identify a wedge in the market, usually a very sharp pain point or job-to-be-done, and focus on solving that in a differentiated way. By definition, these early wedges often create an illusion that the addressable market is limited to just that.

This is where the role of imagination comes in. Seed investors should spend adequate time with the founders to understand the eventual end-state of the world they are imagining. If this end-state is large enough and ambitious enough, usually that’s a leading signal that the company will continue to expand its TAM.

Turning the tables around, I also believe that founders should spend time crafting a strong narrative around this end-state and paint a picture that investors find easier to buy into. If this can include even a broad outline of what the path from the present wedge to the eventual end-state potentially looks like, even better.

I hesitate to call this picture a “vision” as this word is just thrown around a lot and frankly, is now considered faff. Instead, trying to visualize what the world will look like with your product in it, is much more tangible and real.

So, if not TAM, what aspects should seed investors evaluate instead? I recommend the following two:

1/ Founder-market fit – this is critical for the startup to go from the wedge to the end-state, and should be in place even at the earliest stages of company building.

2/ Competitive differentiation/ right to win – as I mentioned in my post ‘How To Differentiate As An AI Applications Startup?‘, for a startup to be viable, it’s not enough to just build cool tech. It has to be able to create significant competitive differentiation, especially against incumbent solutions. I call it “non-incrementality”.

A strong hypothesis around competitive differentiation, and eventual right to win, should exist in the founders’ strategy from Day 0. The edge will get gradually built out over time, but both the intent to create it as well as the building blocks for it need to exist from the earliest stages.

Looking back on the many startups I have seen or invested in across geographies, one thing I have learned is that if a startup remains sub-scale, in most cases it tends to be due to founder motivation, quality of execution, and team/culture issues, rather than the available market being small.

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A Talent Scout Mindset For VC

Outlier venture performance requires being non-consensus-and-right. Framing your role as a Talent Scout, vs. just a Picker, improves the odds of finding such opportunities.

I strongly believe in Howard Marks’ framework that for better than average investing performance (i.e. beating the benchmark), an investor needs to be non-consensus-and-right. My own derivative framework for venture investing is to look for High-Signal-Non-Consensus deals – companies where I am catching strong leading signals, but which the investor-crowd is struggling to understand.

Executing this strategy well requires consciously looking for:

(1) Overlooked markets, and/ or;

(2) Underestimated founders.

If both the market and team were hot, the company by definition, would be consensus. Consensus deals get significantly bid up in price, and as Howard Marks frequently says, high prices indicate low future returns. Therefore, through both learning from OGs like Howard Marks and observing my portfolio’s behavior over the last decade, I have gradually come to believe that entry price definitely matters in venture investing.

While evaluating teams, the role of a VC is often defined as that of a Picker. The best GPs possess a combination of 3 abilities:

1/ Analyzing tangible skills for founder-market fit.

2/ Using past experiences to pattern-match for intangibles like grit.

3/ Having a 3rd filter of intuitive judgment that may override the previous two.

While these features are cool for venture capital in general, they might still fail during the specific quest for identifying underestimated founders. By definition, many of these founders don’t have classic indicators of tangible skills such as Ivy League backgrounds, Big Tech work experience etc. Further, they can have quirky, irreverent, or misfit personalities, so pattern-matching with past venture-backable personas will also not give the right output.

The 3rd feature of intuitive judgment becomes overwhelmingly important in this scenario. Therefore, to describe a venture investor who is on a conscious quest to discover underestimated founders, I prefer the framing of a ‘Talent Scout’ over that of a Picker.

To highlight the mindset of a Scout, here’s a cricketing story once shared by the famous Pakistani bowler Shoaib Akhtar, the fastest in the world at that time who regularly hit the 150-160 kmph range. As an unknown player harboring ambitions of playing for the national team, Shoaib once turned up for trials that were being run by legendary cricketer Zaheer Abbas. More than 3,000 kids turned up so to grab Mr. Abbas’s attention, Shoaib started running laps around the 3 km cricket ground in sweltering heat. A kid hungry enough to be doing this madness caught the legend’s eyes. He asked Shoaib to bowl one ball at the nets, and the rest is history!

The mindset of a Talent Scout is to focus on developing a ‘Feel’ for talent, judge how strong this Feel truly is, and then have the courage to let it become the basis of strong conviction even in the absence of other tangible signals. What’s the source of this Feel, you ask? That’s the alpha, the x-factor of the Scout. Sometimes it’s a unique worldview of what it takes to win in that particular game. It can also be just a superior reading of human behavior. Often, Scouts can access a subconscious intelligence, built up over many years but still hard to precisely explain.

When meeting non-consensus founder talent, I have found adopting the mindset of a Scout to be immensely helpful. It’s a very different context from evaluating a typical venture-backable persona or a relatively proven team, and therefore, this change in mindset leads to an interaction of a very different flavor.

The hope is that having a talent scout mindset leads to an increased likelihood of non-consensus-and-right investments, thus positioning the portfolio for generating venture alpha.

Closing out with this line from my friend Manish Singhal who runs the deeptech fund Pi Ventures – “We don’t have proprietary deals. We create a proprietary view on the same deals everyone sees.”

PS: if you liked the concept of scouting underestimated founders, do check out my post ‘Reputations and Underdogs in VC‘ which tackles whether spending time with the laggards in your venture portfolio makes sense or not.

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One Person’s Conviction For Easier Fundraising

As a fundraising founder swimming in the rough seas of skeptical investors, sometimes all you need is a high-conviction intro from one sponsor to tip the scales in your favor.

As a venture investor, referrals from people in my network is one of my top channels of deal flow. There are hundreds of startups that reach out for fundraising discussions every month. Having someone you know vouch for a founder automatically gives initial comfort around taking a meeting.

Over the years, I have observed that these referrals fall into 3 categories:

1/ Weak intro: beyond being a friend, the referring person doesn’t know much about the founder’s idea or the reasons behind pursuing it. These referrers are usually the founder’s weak acquaintances and are only helping out with connecting to a bunch of investors.

While even a weak intro ensures that I pay attention to the startup, conversion to a live interaction is usually low.

2/ Warm intro: the referrer has deeply known or worked with the founder in the past, and has a fair idea about their personal mission, goals, and personality. Typically, these referrers are ex-direct managers, peers, college friends who have stayed in touch, and other direct collaborators. They might or might not have an understanding or appreciation of that particular startup idea but believe in the founder.

These intros are solid, especially as the founding team is the top-most investing criterion at the early stages. In most cases, I will typically schedule a 30 min. video call with the founder at the very least.

3/ Conviction intro: the referrer has spent significant time either organically or consciously, to develop a deep conviction in both the founder and the startup idea. These referrers are usually founder execs, senior operators, angels, and VCs.

In the best cases, the referrer is also showing skin-in-the-game via either investing significant money and/ or time in the startup.

Conviction intros are gold and a great signal of the quality of an investor’s deal sourcing. For almost all such intros, I end up scheduling a 1-2 hour deep brainstorming session to get into the weeds. Interestingly, by the end of these sessions, the judgment on whether to invest or not gets immediate clarity.

Adding more nuance…

I would like to go one level deeper on Conviction Intros, and talk about what I call ‘One Person’s Conviction Intro’.

Those who regularly read my blog would remember the post ‘An Investing Framework to Find Startup Diamonds‘. In it, I talk about the ‘High-Signal-Non-Consensus’ quadrant where the best startups are to be found at the early stages.

Deal ScreenConsensusNon-Consensus
High-Signal🪙🪙🪙
Low-Signal
Consensus vs Signal 2×2 ©Soumitra Sharma

(4) High-Signal-Non-Consensus – these are the opportunities we as venture investors live for. They are highly non-consensus, with the investor-crowd struggling to access, understand, evaluate risk and build a positive view on them. Yet, these startups have high-quality leading signals, which could be external and/ or internal.

  • External – eg. a respected investor, sometimes a domain expert, has taken the time to evaluate & build high conviction around the company. Or a visionary customer is taking a bet, partnering with them in building the early product.
  • Internal – extraordinary founder-market fit eg. the founder has spent a decade just going deep in the field. Or a backstory that provides an authentic “why” behind pursuing this idea. Or an execution track record in the startup’s arc that is outstanding on important elements like capital-efficiency, iteration velocity or organic customer acquisition.

This quadrant is the hardest to source for and requires having a really differentiated network of relationships (for referrals) and a personal brand that attracts interest from these types of founders.

An Investing Framework To Find Startup Diamonds

As mentioned in this excerpt, the High-Signal part comes from someone credible putting in the effort to build conviction, demonstrating skin in the game via committing any type of valuable currency, and then risking their personal reputation to socialize the opportunity with their trusted networks.

This opportunity might still be Non-Consensus, with the investor-crowd struggling to appreciate it. Yet, this referrer (or perhaps ‘sponsor’ is a better word in this context) is willing to be contrarian and follow their own conviction built from first principles.

When this sponsor refers a deal to me, this One Person’s Conviction Intro sits at the peak within the universe of Conviction Intros, simply because it has a high likelihood of being a key to the High-Signal-Non-Consensus quadrant.

However, even an investor with the highest quality deal flow can only expect a handful of such intros every year. The reason is most founder execs and operators don’t have the time and/ or incentives to build independent conviction. And most angels and VCs tend to demonstrate herd behavior, preferring to lazily piggyback on the conviction of others versus taking the time to do independent thinking.

So, even though my investing style is predicated on searching for these intros, the world is supply-constrained with respect to them. However, what I can do is swing really hard when I do get a few of these fat pitches every year, and maintain discipline at all other times. Venture investing is a very forgiving game where one isn’t reprimanded much for the losers, as long as you get a few right in a big way!

For founders, getting warm intros to investors has now become common knowledge, and frankly, table stakes. However, what could give you an edge over hundreds of other fundraising founders is inculcating that one sponsor – someone who can build independent conviction on your yet-unvalidated startup, show skin in the game, and socialize their commitment to other investors.

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When will the next venture bull run begin?

While public markets appear to be decisively reviving this year, venture activity barring AI is still very slow at large.

With founders & investors worried about when the good times will return, I turned to an age-old framework by the OG Sir John Templeton to try and answer this question.

I recently listened to the latest quarterly update podcast, “What’s Exciting in the Market Right Now?” by Miller Value Funds. I am a big fan of Bill Miller & always make it a point to deeply reflect on what he says.

In this pod, Bill cited an insightful quote by the late Sir John Templeton, the legendary founder of Templeton Funds:

Bull markets are born in pessimism, grow on skepticism, mature on optimism and die on euphoria.

Sir John Templeton

A. Templeton’s framework

Bill then goes on to apply this Templeton’s framework to explain market cycles over the last 15 years as follows:

  • During this period, the first point of maximum pessimism was in March 2009, which then birthed a new bull market. The next point of max pessimism was March 2020, which gave rise to another bull market.
  • Dec 2020 was the point of optimism, post which the market fell ~38% but then rallied again. Ultimately, the point of euphoria was reached in Nov 2021, which saw the peak of popularity for innovation bulls like Cathie Wood of Ark Invest. At this time, interest rates were at rock bottom while valuations of unprofitable growth companies were sky-high.
  • The most recent point of max pessimism was in the Fall of 2022. Since then, overlaying market performance on top of Templeton’s framework, it’s safe to say that the next bull market has already started. Markets are up ~20% since this last point of max pessimism and therefore, this new bull run appears to have reached the “grow on skepticism” phase in July 2023.

Bill then goes on to say something super insightful (man, the amount of wisdom in this 10 min monologue!). Paraphrasing a bit here:

Microstrategists try to use their view of the economy to determine where the market is going. And that’s exactly backwards.

The economy doesn’t predict the market. The market predicts the economy.

The market comprises of real people with real money at risk, and the totality of them is how the market acts.

Bill Miller

Just think about the 2nd para in the above quote. It’s an amazing thought! Intuitively, we all tend to think of the market as an analytical engine when in fact, it’s actually a prediction engine. It’s a complex system where hundreds of millions of people are looking at all the info they have, making a prediction of where the economy is likely to be headed & placing bets with real money based on this prediction.

But I digress! Coming back to Templeton’s framework, as I was digesting it in the context of public markets, I ran a thought experiment on whether it applies to the venture market as well. This is how the exercise went.

B. Applying Templeton’s framework to venture

It’s important to mention upfront that private markets differ from public markets in a few important ways, which manifest in specific behavioral characteristics:

1/ They are illiquid ➡ price discovery happens gradually & therefore, lags public markets at least by a few months if not years, due to system inertia.

2/ They have fewer (very small retail participation) but more sophisticated participants ➡ both upward & downward resets have relatively less internal momentum & are, therefore, more gradual.

3/ They have high information asymmetry ➡ takes time to gather, analyze & react to information. Given higher imperfections, probabilities & confidence intervals are assigned to conclusions more conservatively.

4/ There is negligible automated trading & auto-pilot inflows ➡ information is analyzed & acted on by real humans in a slower, more deliberate way.

Essentially, private markets are slower, more concentrated & more deliberate with longer feedback loops than public markets. Therefore, while public markets can be analyzed daily, weekly, or monthly, I believe a safe unit of time to analyze the cyclicality of private markets is a year.

To start applying Templeton’s framework to the US venture market, I looked at data for total venture capital $$ invested in the US every year since the dot-com bubble. Here’s how the data looks:

Source: NVCA Yearbooks (for years marked with *, data was sourced via ChatGPT as it was unavailable on the NVCA website)

Here are some insights I gathered from this data:

1/ During the dot-com bubble, 1997 and 1998 look like the years when the venture bull run entered the “grow-on-skepticism” phase. It then hit the “mature-on-optimism” phase in 1999, achieving the “point-of-euphoria” in 2000.

As per the Templeton framework, the point of euphoria is when the bull market typically starts its journey toward death. This is exactly what happened to the dot-com bull run between 2001 and 2003, hitting the point of maximum pessimism in 2003. Interestingly, going back to the earlier point of a lag between public and private markets, this 2003 point of max pessimism for US venture was a year behind the same for public markets (they bottomed in Oct 2002 when the S&P500 hit a 5 and a 1/2 year low).

2/ Moving forward, the US venture market again followed Templeton’s argument of “bull markets are born in pessimism”. The seeds of its next bull run were sowed in 2003, subsequently entering grow-on-skepticism during 2004 and 2005. This bull run entered mature-on-optimism in 2006 and 2007, growing 25%+ y-o-y.

But before it could hit a real point of euphoria, the housing crisis happened in 2008. The US venture market hit the point of max pessimism in 2009, and similar to the dot-com run, lagged the public markets by a year (their point of max pessimism was in Sep 2008).

3/ With the tailwinds of the Fed’s zero interest rate policy post the ’08 crash, the US venture market saw a secular bull run between 2010 and 2021. Barring a few corrections and a brief Covid hiatus, this was an almost uninterrupted, decade-long, dream bull run.

Fueled by massive liquidity injection by the Fed to counter potential Covid-driven economic distress, on top of astonishingly low levels of interest rates, the US venture market hit the point of euphoria in 2021. As I wrote in my post “Making Hay During Market Peaks“, this was the year of “Crypto shitcoins, ape NFTs, meme stocks, IPOs of unbaked tech companies, and real estate boom in as far as Denver & Raleigh”.

C. Where are we now in the current venture cycle?

Consistent with Templeton’s framework, the recent decade-long venture bull run started its downward spiral from the point of euphoria in 2021 and subsequently hit a point of max pessimism in 2022 (~30% y-o-y decline in VC $$ invested).

But this framework also tells us that the seeds of the next venture bull run were also sown simultaneously at this point of max pessimism in 2022.

As we stand today, I get the feeling that the US venture market is close to entering the Day 0 of the grow-on-skepticism phase of its next bull run (I wrote about how the excesses of 2021 are now winding down in my post “Cheetah in the Rainforest: 2021 Vintage of Venture“).

Per Bill Miller, public markets have already entered the grow-on-skepticism phase decisively, showing ~10% gains in H1 2023, and are likely to continue on this trend in H2. Assuming a ~1-year lag between public & private markets like in previous cycles, my expectation is that the next venture market bull run will decisively enter the grow-on-skepticism phase in 2024.

C. Closing thoughts

As a disciple of Charlie Munger, while I don’t believe in macro forecasts (especially by economists & equity research analysts), I am also a disciple of Howard Marks and therefore, a strong believer in the importance of studying market cycles across asset classes. Where we are in a cycle should be one of the important inputs for deliberation on an optimal investment stance, including what mix of offense & defense to aim for.

Hence, my fascination with Templeton’s framework, and how well it works as a tool for studying cyclicality in both public & private markets.

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Cheetah in the Rainforest: 2021 Vintage of Venture

“A firm writing seed checks without specific competence in that stage is like a cheetah in the rainforest. The beast is a wonder of nature that can run at a top speed of 60-70 mph in the African grasslands. But place it in the Amazon rainforests, and all its wondrous capabilities will amount to zilch. It’s just not built for it!”

Most 2021 vintage startups got VC ‘cheetahs’ on their ‘rainforest’ Boards. Surviving the new reality that faces them, will require a cathartic reboot.

Had an interesting conversation with a Bay Area-based founder a few weeks back. His startup is in the high-ACV enterprise space wherein the product is solving an intense and wide-ranging problem that is especially applicable to large companies. He got off the blocks in 2021 with a mid-single digit $Mn pre-seed round by a top-tier VC at the idea stage itself. A start that most founders dream of!

However, now two years down the road, the situation on the company’s Board is far from rosy. The company has gone through tumultuous times that are typical for any 0-to-1 startup. While the founder has kept his chin up during this phase, he is very disillusioned with the VC’s advice, behavior & general stance so far. When he shared some specific examples of this with me, my first reaction above all else was that this firm clearly has little past experience of portfolio management at the seed stage & in particular, what founders need in order to navigate its inherent complexity.

As I started relating this to many other founders I have met this year, a pattern is clearly emerging in the 2021 vintage of startups. Specialist VCs who have mainly invested in the Series A & beyond space in the past, went upstream & wrote massive pre-seed & seed checks with minimal or no traction. They were probably under pressure to deploy or get early dibs on the best teams as later stage valuations were going to stratospheric levels.

Seeing these companies now, after most of them have almost consumed their 24-month runway, I am seeing how the lack of milestone-based capital sequencing & strong stage-firm fit has created many fundamental issues with their core:

1/ Armed with big checks from large AUM firms, founders ignored the scrappy, capital-efficient approach right out of the gate. Instead, they bulked up teams & spent disproportionately on go-to-market even before problem-solution fit. Now in hindsight, they have ended up creating fragile organizations that are at the mercy of the macroeconomy & availability of follow-on capital.

2/ Many of these VC firms have put relatively inexperienced team members on the boards of these companies. My guess is because in their overall AUM game, these types of really early investments are probably considered highly risky “option bets” with low stakes in general & therefore, good learning opportunities for more junior members.

While experience by itself doesn’t make anyone a good or bad VC, pre-seed & seed stages of venture capital demand much more art & judgment in company building from all stakeholders. A firm writing seed checks without specific competence in that stage is like a cheetah in the rainforest. The beast is a wonder of nature that can run at a top speed of 60-70 mph in the African grasslands. But place it in the Amazon rainforests, and all its wondrous capabilities will amount to zilch. It’s just not built for it!

It’s a bit counter-intuitive but in my view, the best VC talent (best = strong fit from a personality & skills perspective) needs to be involved in the earliest stages of company building. There is a reason why YC has a strong moat in that stage, & why while most fresh MBAs can invest & do portfolio management at Series A & growth funds, pre-seed & seed needs artists like Paul Graham & Semil Shah that are few & far between.

One of the things I would like to see coming back into the startup ecosystem foundation post this venture downturn is the importance of “capital staging” – rigorously thinking through how the company should be capitalized at the earliest stages, what kind of investors should be assembled for it, the mindset, approach & time a specific company would need to iterate towards problem-solution fit & eventually, product-market-fit.

I would like to see the return of angels, domain operators & specialist boutique VCs partnering with founders at the earliest stages of venture. We need some version of the Arthur Rock & Ron Conway models but modified for this age. These types of stakeholders in turn, would educate and/ or encourage founders to be scrappy, agile and perseverant during the 0-to-1 stage, supporting them in building the most optimal path to the next base camp.

Closing thoughts specifically for the 2021 vintage startups – while it’s not easy to rewire the foundational DNA of a company, it’s not impossible. While the lesser gritty teams will flame out, I am also seeing founders who are acknowledging both the mistakes of the past as well as the new reality that faces them and are determined to learn & re-invent themselves. Even though as an investor, I am not too excited about the 2021 vintage the way it looks & is behaving right now, I will be more than eager (& rightly so!) to back its re-invented & re-wired v2.0.

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An Investing Framework to Find Startup Diamonds

As a venture investor dealing with high volume deal flow across sectors, stages, and founder personas, how does one effectively screen for the diamonds amongst the rocks?

Sharing a deal screening framework to help improve any venture investing process.

As an operator-angel, I consciously follow a “tech-generalist, founder-first” style of investing. It both suits my background (which is very cross-sectoral & cross-functional) as well as helps me cast a wide-enough net.

I believe one of the core advantages of being a solo investor is not being boxed in a niche fund strategy or sector focus. As tech evolves rapidly across geos, I like the freedom to be able to seek out the best founders in whatever vertical they might be building in, as well as be opportunistic in terms of participating across stages & in special situations too. This is the model that the likes of Elad Gil & Jason Calacanis have followed.

Of course, one has to still identify the game where one has an “edge” in, to have the best odds of outlier returns. For me, that’s focusing on what I call the “Global Indian” founder persona. It includes:

(1) India based founders building for the world (eg. cross-border SaaS, enterprise, deeptech etc.), and

(2) Indian immigrant/ Indian-origin founders building tech cos. in large markets like the US & SE Asia.

This is the persona where I have high-quality access, where I am able to understand & relate to the founder’s journey & motivations, as well as add value with empathy, given I am myself a Global Indian.

With this strategy, I end up with a massive top-of-the-funnel of deals across a wide variety of sectors, stages, geos & check sizes. Over the last few months, I have been trying to think of some sort of a screening framework to be able to quickly figure out where a new investment opportunity fits in my deal universe. Ideally, this framework should help easily visualize a deal’s preliminary fit with my strategy, before taking it into deeper diligence & running my entire check list on it (my core IP!).

While any such framework can involve many types of vectors, I have been experimenting with a “consensus vs signal” 2×2.

Deal ScreenConsensusNon-Consensus
High-Signal(2)(4)
Low-Signal(1)(3)
Consensus vs Signal 2×2 ©Soumitra Sharma

These vectors abstract out 2 important elements of venture investing:

  • Consensus – what is the investor-crowd’s opinion on whether this startup* makes sense or not.
  • Signal – what is the quality of people** who believe in the startup & have skin-in-the-game.

*”Startup” here means an amalgamation of team, market & product.

**”People” here includes founders, employees, customers, existing investors etc.

Let’s look at what each of the quadrants in the 2×2 mean:

(1) Low-Signal-Consensus – these companies lack high quality operating signals around the business and who the investor-crowd agrees will find it hard to make it big. A typical example would be an idea stage founder with no educational or career spike, going after an established (highly competitive?) market but with weak founder-market fit, and yet to demonstrate any early validation or traction around the startup’s hypothesis.

These opportunities will usually have negligible investor interest. When I come across such companies, my instinct is to first check if I am seeing any positive signal that the crowd is missing. This could be a behavioral characteristic of the founder, something from their personal backstory or from their startup journey so far. Idea is to see if there is some sort of high-quality leading signal hiding in plain sight.

If I sense a likely positive signal, I try and maintain a thread with the founder over coming months, attempting to see if subsequent execution can help build some conviction.

Note: most cold inbounds on LinkedIn, as well as startups from college incubators/ accelerators/ b-plan competitions fall in this bucket.

(2) High-Signal-Consensus – these companies have high quality signals around team pedigree, investor interest, customer traction etc., and who the investor-crowd agrees are potential winners. A typical example would be a repeat founder building in an established market that is universally understandable, has a large TAM and a past history of large outcomes.

While these deals are understandably hot, high investor FOMO around them creates 2 risks:

  • High entry valuations, bringing down future returns.
  • Because these deals look so obviously good on paper, it drives investors to overlook asking hard questions around the business. Does the repeat founder have fit with the space? Is there hubris at play from past success? Is the company being over-capitalized & therefore, not being set up for capital efficiency?

Therefore, whenever I see a High-Signal-Consensus deal, my antennas go up & I consciously try to keep FOMO at bay while increasing the rigor of the evaluation process.

Note: most deals that I see in angel syndicates or groups fall in this bucket.

(3) Low-Signal-Non-Consensus – these companies lack high quality operating signals around the business. But interestingly, the investor-crowd also doesn’t have a consensus yes/ no view on it yet. Reasons could be the space is esoteric so hard to understand, team’s background is non-traditional, or location is non-top-tier, founder is bad at pitching etc.

While looking at these opportunities, I am conscious of these being potential “non-consensus traps” – companies that look good to someone trying to invest against the crowd just for the sake of it, without building first-principles conviction.

I have an inherent positive bias for underestimated founders & overlooked assets. That’s why I try to be consciously careful in this bucket of startups as with experience, I have learned that bad companies are in most cases, just bad companies.

(4) High-Signal-Non-Consensus – these are the opportunities we as venture investors live for. They are highly non-consensus, with the investor-crowd struggling to access, understand, evaluate risk and build a positive view on them. Yet, these startups have high-quality leading signals, which could be external and/ or internal.

  • External – eg. a respected investor, sometimes a domain expert, has taken the time to evaluate & build high conviction around the company. Or a visionary customer is taking a bet, partnering with them in building the early product.
  • Internal – extraordinary founder-market fit eg. the founder has spent a decade just going deep in the field. Or a backstory that provides an authentic “why” behind pursuing this idea. Or an execution track record in the startup’s arc that is outstanding on important elements like capital-efficiency, iteration velocity or organic customer acquisition.

This quadrant is the hardest to source for and requires having a really differentiated network of relationships (for referrals) and a personal brand that attracts interest from these types of founders.

When I meet startups in this quadrant, I immediately get to work, spending time with the team & together unboxing every facet of the market. Generally, these deals have relatively less investor FOMO so I can take the time to run my conviction-building process with rigor.

The risk in this quadrant, and purely from my personal investing style & behavior perspective, is that I tend to get positively biased on them very quickly. After many such experiences, I now consciously play devil’s advocate during the evaluation process. Btw this is where running a rigorous conviction building process and avoiding a trigger-happy mode really helps.

Hope you found this screening framework interesting & perhaps helpful for your own venture process. Of course, evaluating an early-stage venture opportunity is much more multi-dimensional than this. But having such a framework really helps in effectively allocating bandwidth while managing high volume deal flow.

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Reputations & underdogs in VC

In venture investing, there are obvious stars in the portfolio that generate returns. But what about the ones that are struggling?

I believe that spending time with the underdogs offers the opportunity to learn & build reputations. Here’s why.

During a recent brainstorming session with one of my VC friends, the topic of bandwidth allocation between high-performing “stars” and struggling “underdog” portfolio companies came up. In the flow of the conversation, I ended up saying this:

Star portfolio companies will likely generate returns, while the struggling underdogs offer the opportunity to learn & build reputations.

There is an inherent dichotomy in managing a venture portfolio – the best-performing companies require little investor bandwidth & yet, have high probability of success while the ones struggling demand an inordinate amount of effort & yet, have low odds of success. Brad Gerstner of Altimeter said this in a different way during a recent fireside chat with Mubadala:

If this founder relies on us to succeed, then we chose the wrong founder. Our job is to increase the probability of success, not create the success.

Brad Gerstner, Altimeter Capital

Given this dynamic, it’s natural that purely from an opportunity cost optimization perspective, venture investors will be drawn to divert bandwidth away from struggling companies & towards forward-looking activities like triaging & protecting likely winners or sourcing new deals.

However, as an operator-investor focused on the pre-seed & seed spectrum of financing, I tend to view this tradeoff differently. Personally, I believe in spending time with struggling portfolio companies & supporting their founders as they guide the ship through choppy waters. Not for emotional or moral reasons, but because it makes execution sense in really early stages of venture investing:

1/ Because it’s unclear who will eventually win: till Series A, which is typically an acknowledgement that the company has reached product-market-fit, both “high performing” & “struggling” are loosely defined, temporal phases of company building. Companies will move in & out of these buckets during the up-and-down journey towards PMF. Only by spending enough operating time can an investor develop independent judgement on each company’s potential, quality of execution & what all stakeholders should be doing to tip the scales & increase the probability of achieving PMF.

I call this “building conviction” – something that Paul Graham clearly did for Airbnb by closely observing how the founders were building & iterating on the ground. This is what gave him the conviction to bat for the team in front of top VCs even when a majority of them were just not seeing it.

The alpha of OG venture investors like Paul Graham is their ability to see the kernel of a “top” company within a “presently struggling” one. This happens only by spending the time to closely track the founder’s execution approach & mindset. Reproducing some of the email exchanges between PG & Fred Wilson of USV, to highlight this (Source: Paul Graham’s post from March 2011)

_______

_______

2/ Because you learn what is not working: venture investing is a feedback loop business. It’s an infinite game where the goal is to keep improving daily by learning what works & doesn’t as the world evolves & incorporating the lessons back into your systems.

In my experience, spending time with companies in troubled waters helps absorb lessons not available anywhere in the physical or digital world. Be it co-founder conflicts, screwed up cap tables, botched hiring or excess spending, these human experiences are worth their weight in gold, and reflecting them both in front of other portfolio founders as well as in your own investment process going forward, is key to tilting the playing field a few degrees in your favor. Cumulatively, this can add up to a huge competitive advantage over a long period of time.

3/ Because fighting till the last breath is a DNA: while what Brad says above is true, especially for growth stage companies which is where Altimeter operates, even the best founders pre-PMF need a lot of support & coverage for their gaps & blind spots. The best venture investors strive to create delta on the “increase the probability of success” part of the job, which is why while capital is a commodity, individuals GPs that move the needle during a company’s long lifecycle are rare & so in-demand.

I remember listening to Doug Leone of Sequoia at an event a few months back where he mentioned believing in fighting alongside the founder till the last day of the company (also reflects his tough New York Italian upbringing!).

My organic investing style is cut from a similar cloth, wherein I focus on bringing a company-building DNA to every cap table I have been a part of. Though, it hasn’t been without some self-doubts, as there is no immediate fruit to show for all the labor this approach demands.

Case in point being an erstwhile portfolio company in queue management software. I was literally the first check into the company as an angel way back in 2015, and also helped syndicate that first round. About 2 years in, the company was out of cash, all employees had to be let go, 2 co-founders jumped off the ship, and the remaining 2 founders were trying to engineer a pivot from a consumer app to an enterprise use case.

On paper, this would look like a dead duck to any sane person barring 3 people – the 2 remaining founders and me! We kept pushing on, literally on fumes. I remember having many late-night operating sessions with the founders every week for almost an year, in parallel to my day job at Alibaba & also being an expecting first-time father. In fact, I remember my better half asking me more than once – “why are you burning yourself up over a small angel check? Is this worth the opportunity cost of your time as a Director at Alibaba?”.

As I now reflect on these questions, I feel it’s all about the DNA of doing whatever it takes alongside founders. Long story short, the company pivoted successfully, crossing $1Mn ARR at high profitability. The business started throwing up so much cash that investors got multiples of their investments back via dividends, with founders also receiving significant cash-payouts, and deservingly so, for their grit & sacrifice. It didn’t become a unicorn or a household name but left everyone net-positive.

This experience left me with many operating learnings & a lifelong friendship with the founders, whose next company I have promised to back again. Even till today, I use the mental model from this investment while looking for both positive & negative leading signals in any new team I meet. I have no doubt this experience is helping me sow the seeds of future success.

After more than a decade of experience both as an institutional & individual investor, I have only now come around to accept my nature of not giving-up on people & companies that are struggling. It’s part of who I am and perhaps, my alpha as an investor.

I don’t know if this is the smart way to do venture investing or not, but I would like to leave you with this idea – fighting for the underdog companies will at the minimum, help you learn some valuable lessons & build your reputation as an investor that in turn, will create future value in more ways than you can imagine.

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