1Mby1M Virtual Accelerator Investor Forum: With Alok Nandan, Founder General Partner at First Rays Venture Partners (Part 4)

Sramana Mitra: Switching the line of questioning, what are you thinking in terms of how you want to play this fund? Are you looking for unicorns? Are you looking for strategic early exits? What is the analysis?

Alok Nandan: When we come in as investors, there are two guys in a garage most of the time. It is hard to predict if any of these startups will become a unicorn. We can’t base our strategy on companies becoming unicorns. Given our fund size and the number of bets we make, even if they get acquired for $100 million or so, that is a good return for us.

1Mby1M Virtual Accelerator Investor Forum: With Alok Nandan, Founder General Partner at First Rays Venture Partners (Part 3)

Sramana Mitra: Do you want to do another use case like that one?

Alok Nandan: Let me give you another one that is public. This is a company called Blitzz.io. There are two founders. One of them is a technical founder. He was in another venture-funded company. He was the Director of Engineering there. The CEO was also in another venture-funded company that went public then she was in SAP’s accelerator program.

1Mby1M Virtual Accelerator Investor Forum: With Alok Nandan, Founder General Partner at First Rays Venture Partners (Part 2)

Sramana Mitra: You are looking for a founder that you feel good about. That is your answer.

Alok Nandan: Unfortunately, it is subjective because at the seed stage, you don’t have that many metrics to go after. Series A and beyond, you have numbers and data that you can look at. At the seed stage, you don’t have numbers. A lot of times, it is a qualitative bet and less quantitative. The qualitative bets are around the domain expertise, ability to execute and go after hard problems. Some of that is demonstrated by our past experience.

1Mby1M Virtual Accelerator Investor Forum: With Alok Nandan, Founder General Partner at First Rays Venture Partners (Part 1)

Alok Nandan, Founding General Partner, First Rays Venture Partners, discusses the firm’s investment thesis which is very well-defined and focused.

Sramana Mitra: Let’s start today’s session with a conversation with Alok Nandan, Founder and General Partner of First Rays Venture Partners.

Alok Nandan: Great to be back. Thanks for having me.

1Mby1M Virtual Accelerator Investor Forum: With Sumant Mandal, Co-Founder and Managing Partner at March Capital (Part 6)

Sramana Mitra: You have been around for a long time and so have I. We have come from this era in Silicon Valley where people would not invest in companies that are more than 15 miles away from them. Now, people are investing without meeting people. What is your current thesis around what geography you are comfortable investing in?  

Sumant Mandal: We, as a firm, never have been of the mindset that if I live in Southern California, then I want to be a Southern Californian investor. I was with one of my investors yesterday. I’ve lived in the Los Angeles – Santa Monica area for 20 years. I have been investing for 20 years, but I have only invested in two companies in LA.

1Mby1M Virtual Accelerator Investor Forum: With Sumant Mandal, Co-Founder and Managing Partner at March Capital (Part 5)

Sramana Mitra: What we also see in the Bootstrapping to Exit mode of company building is a lot of acquisition hires. We have sold companies in our portfolio in that mode. These are typically companies with a little bit of angel financing that go straight for an exit. We pulled a company to Qualys, for example, in this mode.

That is all about talent. Whether they are going to stick with the same product strategy or not, what they are looking for is the team. That happens a lot in the business. 

1Mby1M Virtual Accelerator Investor Forum: With Sumant Mandal, Co-Founder and Managing Partner at March Capital (Part 4)

Sramana Mitra: The pool of talent has also broadened. Even a little country like Uruguay now has a couple of unicorns. I remember we did a case study a long time ago where there were two founders that met on the internet. One was from Ireland and the other was from Montevideo in Uruguay.

When I saw this unicorn from Uruguay, I was like, “Wow. A little country has come up in the process.” Estonia, of course, is churning out unicorn after unicorn and has become a startup nation. There are some interesting talent sourcing and team architecture changes that are happening in the world right now in how companies are being built.

1Mby1M Virtual Accelerator Investor Forum: With Sumant Mandal, Co-Founder and Managing Partner at March Capital (Part 3)

Sramana Mitra: Are you saying that you are willing to write a $5 million check on a concept if those criteria are there?

Sumant Mandal: Yes. 

Sramana Mitra: That is unusual these days, because people want the pre-seed and the seed guys to finance the company to significant traction before they are willing to write $5 million to $10 million checks.