Excellent discussion with Daniel Gulati, Founding Partner at Forecast Fund, on the e-commerce startup trends and what can and cannot be venture financed at this stage, and why. When we spoke in 2017, he was Managing Director at Comcast Ventures. You can listen to the podcast interview here.
Sramana Mitra: Let’s start by introducing our audience to yourself.
Daniel Gulati: I’m based here in San Francisco and focus 100% of my time on seed and early stage investments in consumer internet companies. About half of my work is in e-commerce and marketplaces. The other half is everything else within consumer Internet – digital media, social media, mobile. Prior to joining Comcast Ventures, I was actually on the operating side.
I started my career as a consultant at BCG. I then went on to start a company called FashionStake which was a marketplace for independent fashion. It was venture-backed and was acquired by Fab.com. Then we went and ran Fab.com. I have been around the e-commerce world for almost 10 years now.
As far as Comcast Ventures goes, we’re a separate group that focuses, first and foremost, on working with great entrepreneurs and investing in world-changing companies no matter what the vertical or sector. We are investing across the consumer and enterprise spectra. I’m just focused on pure consumer investments. As a fund, we pretty much touch every area of tech. We’re looking to work with great entrepreneurs and invest in the next huge companies.
Sramana Mitra: Tell me a little bit about your firm’s focus in terms of stage. If you could give us some fairly specific details of exactly what points you want to come in? What stage do you like to come in when it’s B2B? What stage do you like to come in when it’s B2C?
Daniel Gulati: Maybe some good historical context would be helpful. Historically, we tended to be a little bit later stage. We came in Series B. On average, it was a later stage operation where an entrepreneurs would show up with traction and a company that was scaling and had already been built. That’s when we would come in with an investment. Over the last five years, we’ve gotten to be a much earlier stage investor.
We still invest in Series C rounds where a market has formed. There are a few market leaders and we’re trying to pick a winner in that market. We’re increasingly making investments where it is a founder with an idea turning up with a pitch deck and wanting to raise that first round of institutional capital. There are a couple of reasons for that. We find that getting into business with entrepreneurs early on has a ton of upsides.
We’re early investors in a company called Away, which is a direct to consumer travel brand. We’re able to fund that company when it was just two founders and an idea. We helped that company over the last two years of its life and developed that relationship with the founding team and the executive team over there. We just find that not only does that help our ROI map on the fund, it also has great knock on benefits for Comcast Ventures.
When entrepreneurs get choices of who to take funding from, we want to be top of mind for the best consumer and enterprise entrepreneurs. As we sit here today in 2017, we are pretty much sector and stage agnostic. We can truly write a $150,000 as a seed all the way up to $15 million pre-IPO. It’s something we’re proud of. It’s something that has worked out well for us.