1Mby1M Virtual Accelerator Investor Forum: With Nitin Pachisia of Unshackled Ventures (Part 5)

Sramana Mitra: VC firms are raising huge amounts of capital. The management fees are so big. They don’t really need to deliver any returns. They are just sitting and becoming fat with fat management fees.

Nitin Pachisia: To your earlier question about the trend in the VC industry, you have to decide as a VC whether you want to optimize for fees or optimize for carry. As a smaller fund, we’re optimizing for carry. If we do our jobs well, the carry is what’s going to generate the bigger returns for us.

As the funds that started off as miro-VCs and are now two $50 million funds, they’re optimized for fees. Whatever their thinking is, to generate carry, they have to return $250 million. If you don’t exit for $2.5 billion, my 10% is not going to be able to return the fund. >>>

1Mby1M Virtual Accelerator Investor Forum: With Jason Lemkin of Storm Ventures (Part 3)

Sramana Mitra: SaaS continues to be bigger because there is a lot more software adoption happening all over the world. Last week, we had a session that was focused on what’s happening on the Indian cloud market, which is a very active market right now.

There’s a company called Greytip that has built up quite a bit of scale. It’s a bootstrapped company. It has taken them many years. It’s a 15-year story. They do the equivalent of PayCycle. The per user fee for Greytip is $.30. It’s a completely different ball game in terms of pricing model and what is a profitable customer acquisition strategy. Everything is bigger. The number of customers all around the world is bigger. The number of competitors all around the world is bigger. >>>

1Mby1M Virtual Accelerator Investor Forum: With Nitin Pachisia of Unshackled Ventures (Part 4)

Sramana Mitra: If you have to make 500 micro-VC funds productive, there needs to be some of these segmentation and clear definition. Otherwise, nobody will find anybody. It’s going to be constantly hit or miss, or it’s going to be very inefficient. The information flow needs to get much more efficient.

To your point that there are exceptions, when people have really great teams – teams that have track record or teams that come out of specific scenarios with very compelling insights into problem areas – would be an exception. What is your read of unicorn mania? As a seed investor, you could get buried under later-stage liquidation preferences. How do you protect yourself? >>>

1Mby1M Virtual Accelerator Investor Forum: With Jason Lemkin of Storm Ventures (Part 2)

Sramana Mitra: Am I hearing that when you look back on EchoSign, you feel that you sold too early?

Jason Lemkin: I think it was a lucrative and fair financial transaction. What I didn’t realize until I got into Adobe is that the team would accelerate after that. I didn’t realize that the team was just getting good and that the team was coming into its own.

When you have a great team, once they cross that initial scale, no matter what the world throws up against you, you cannot be killed. Adobe is great, but it didn’t have anything to do with the brand. It all had to do with the team and a little more capital. I couldn’t see it before. No matter what anybody else does, it doesn’t matter once you’re at $10 million, growing at 100% or more. >>>

1Mby1M Virtual Accelerator Investor Forum: With Nitin Pachisia of Unshackled Ventures (Part 3)

Sramana Mitra: What about the vehicle? Are you doing equity investments or convertible notes?

Nitin Pachisia: It’s a mix. We like to do more equity and less convertibles but we work with the founders on whatever is the best solution for them is. Our preference is to do equity and we encourage founders, even for their subsequent rounds, to do price rounds versus layering up notes over notes.

Sramana Mitra: How do you process the current investment climate where capital is moving further and further upstream? How does a pre-seed or a seed investor mitigate the Series A gap? >>>

1Mby1M Virtual Accelerator Investor Forum: With Jason Lemkin of Storm Ventures (Part 1)

Responding to a popular request, we are now sharing transcripts of our investor podcast interviews in this new series. The following interview with Jason Lemkin was recorded in October 2014. 

Jason Lemkin, prior to becoming a VC, was the CEO of EchoSign, a digital signature SaaS vendor that Adobe acquired some years back. This was an excellent discussion and offers very concrete pointers to where you might look for white spaces in the cloud computing space to do new ventures.

Sramana Mitra: Let’s start with a small window into how you look back your journey as an entrepreneur. Let’s start with EchoSign now that you have so much experience behind you and you’ve had a chance to consider the cloud landscape from a VC’s point of view. >>>

1Mby1M Virtual Accelerator Investor Forum: With Nitin Pachisia of Unshackled Ventures (Part 2)

Sramana Mitra: Talk about your portfolio. What have you invested in? What’s interesting? Take a few highlights of your portfolio and walk us through what they are, why you’ve invested in them, and what is the thought process.

Nitin Pachisia: We’ve made 18 investments in two and a half years, which is reflective of our pace of about 8 to 10 investments per year. I believe we’re seeing about 1,500 companies a year but we like to maintain that pace to be able to dedicate enough time to every company we invest in.

In terms of the some of the examples of portfolio companies, we have a company in the driverless trucking space called Starsky >>>

1Mby1M Virtual Accelerator Investor Forum: With Nitin Pachisia of Unshackled Ventures (Part 1)

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. >>>