Responding to a popular request, we are now sharing transcripts of our investor podcast interviews in this new series. The following interview with Nitin Pachisia was recorded in October 2017.
Nitin Pachisia, Founding Partner at Unshackled Ventures, discusses pre-seed and seed investing.
Sramana Mitra: Tell us about Unshackled Ventures. What is the focus of the firm? How big is the fund? What sized investments do you make?
Nitin Pachisia: We’re a very young pre-seed fund. We started about three and a half years ago. For our initial investments, we invest exclusively at pre-seed stage, which is effectively pre-product in most cases. We focus on immigrant founded companies. That’s the gap in the market that we’re looking to fill. This came out of our personal experiences looking at immigrant founders who’ve already come to the US through the school or corporate system.
When they’re looking to start companies, besides the usual challenge, they’re also dealing with the immigration policies and in addition to that, connecting with the right people who will help them build this business faster. With capital and venture resources specifically built to address these, we started Unshackled Ventures. We write $100,000 to $500,000 checks. Most of the rounds are in that sub-$500,000 range. Most of the rounds, we have co-investors as well.
Sramana Mitra: How big is the fund?
Nitin Pachisia: We are still raising, but our SEC filing was for $25 million.
Sramana Mitra: Tell us about the types of ventures you are focusing on. What are the components of your investment strategy?
Nitin Pachisia: Our focus is always pre-seed and, at least, one of the founders should be not born in the US. We also reserve capital to invest at seed and in pro-rata management. From a sector perspective, we don’t have a specific focus. It’s more founder-focused.
We look at the founder’s vision. We look at what impact they’re trying to make with the solution that they’re creating and whether they can build a lasting business with that. We’ve invested across the tech spectrum all the way from consumer to business. It’s really not thematic investing from a sector perspective but from a founder perspective.
Sramana Mitra: Both B2B and B2C?
Nitin Pachisia: Yes.
Sramana Mitra: What about geography? Your focus is immigrants in Silicon Valley or immigrants in certain parts in the US?
Nitin Pachisia: Immigrants all over US. Just to be clear, our portfolio founders are not all immigrants. Oftentimes, the co-founders are a citizen and an immigrant just like my partner and I. It’s truly an American mix. Our portfolio companies and our deal flow comes from all over the US. We don’t have a Silicon Valley bias.
Immigrants, when they come to the US, they’re already making a choice of leaving their home country and coming to some place in the US. We have built our networks and relationships in a way that we can access entrepreneurs wherever in the US they are. Occasionally, we are introduced to entrepreneurs who may not be physically in the US at the moment, but have some US ties. In all cases, they have some US ties.
Sramana Mitra: We have a lot of companies in our portfolio that would fit your investment thesis. Tell us a bit about what trends you are seeing in your deal flow. I’m going to get to your current portfolio in a minute but I want to get a sense of what you’re seeing in the market out there. What are entrepreneurs coming up with? What are the things that you see that are trend lines in that pool?
Nitin Pachisia: The biggest trend, given our focus, is diversity. We see founders from all over the world. In our portfolio, we have founders from 16 different countries and a really strong gender mix. Most of our inbound deal flows comes through referrals from other entrepreneurs, investors, and universities, which by itself creates a very diverse mix.
What that lends into is a very diverse picture of where technology is trending. We’re seeing a lot of applications of artificial intelligence to solve complex problems especially where humans were playing the middleware role. That’s a big mega trend – applications of robotics, applications of robotics, and recent developments around medicine and health.
These are things that used to be technology that we grew up reading about but are now usable technologies. The most exciting part for me is seeing a lot of that theory translate into applications and making a real-life impact.