Responding to a popular request, we are now sharing transcripts of our investor podcast interviews in this new series. The following interview with Ashish Jain was recorded in February 2020.
Ashish Jain, Partner at 3Lines Ventures, discusses his firm’s investment hypothesis.
Sramana Mitra: Let’s get you introduced to our audience. Tell us a little bit about yourself and 3Lines.
Ashish Jain: 3Lines is an early-stage software technology venture fund. It’s a startup in itself. We started about three years ago. I joined the fund about nine months ago. I was at GE Ventures before that running the AI accelerator.
3Lines is a software technology fund. We are cross-border investing both in the US and India. We do seed through Series A. Though we are a startup, all the partners have considerable operating as well as entrepreneurship experience.
Sramana Mitra: How big is the fund?
Ashish Jain: We have $10 million under management. We are actively raising our second fund. We expect to close about $50 million fairly soon.
Sramana Mitra: Talk about geography. You said you do cross-border. Does that mean all of India and all of US? Where exactly are you based?
Ashish Jain: That’s an important part of our investment hypothesis. We are looking beyond Silicon Valley for sure. Especially for early stage, we believe that there are tremendous opportunities and exceptional founders outside that are emerging.
We have about 10 innovation hubs between US and India. We do get deals from everywhere but majority of our investments are in Boston, New York, Dallas, Denver, some from Silicon Valley. In India, our investments are in Bangalore, northern India, as well as Hyderabad. We actually have a very strong LP presence in these hubs.
Sramana Mitra: Where are the general partners located?
Ashish Jain: We are a distributed team. I’m based out of New York. My other two partners are based out of Denver, Colorado.
Sramana Mitra: The next thing I want to do is define seed. I’m sure you are observing how the ecosystem has evolved. In the mid-90’s when venture capital started to become hot with the advent of the internet, there was seed and Series A.
Now the picture is very different. 25 years later, there is pre-seed, seed, post-seed, pre-Series A, small Series A. Where in that continuum do you position yourself?
Ashish Jain: You’re absolutely right. There has been a tremendous amount of innovation both in terms of venture investment instruments as well as the amount of capital available resulting in rounds getting bigger.
For us, seed means a company with a team, a product, traction with initial customers, and about half a million dollars in revenue. In valuation terms, it could be around $8 million. These are prototypical examples.
Sramana Mitra: What sized checks are you writing in that scenario?
Ashish Jain: For seed, we are typically going to make about $750,000 as part of our seed investment. It could be as low as $100,000, and it could be more.