1Mby1M Virtual Accelerator Investor Forum: With Asheem Chandna of Greylock Ventures (Part 3)

Sramana Mitra: There are a few issues with what you said. At a 30,000 foot level, what you said is true. When you start peeling the onion and poking in the guts of that statement, there are lots of issues. One is, if you are looking for somebody to write you a check based on which you’re going to develop a concept, people are looking for serial entrepreneurs. They’re looking to see a track record. First time entrepreneurs’ lives are very difficult in that sense.

Asheem Chandna: I would say yes and no. Certainly repeat entrepreneurs have the credibility and you will quickly get meetings. If somebody has a success behind them and email a bunch of VCs, they’re likely to get a meeting very quickly. The majority of the work we do is we fund first-time entrepreneurs. >>>

1Mby1M Virtual Accelerator Investor Forum: With Asheem Chandna of Greylock Ventures (Part 2)

Sramana Mitra: What you’re saying is counter to the trend of the venture capital industry right now. It has become the age of lean startups at the early stages these days where entrepreneurs are expected to bootstrap to significant traction before they get to Series A.

What you are doing is more the fat startup model where you’re putting in money up front and building a product. You’re doing it with a very extensive customer immersion and validation by talking to customers and getting the specs before you write that check. What are your thoughts about how venture capital is evolving? >>>

1Mby1M Virtual Accelerator Investor Forum: With Cem Sertoglu of Earlybird Venture Capital (Part 4)

Sramana Mitra: What does UI Path do?

Cem Sertoglu: They are the leading robotics process automation software company. They help large enterprises with complex legacy backend systems to automate a lot of the functions. These are usually systems that cannot integrate and talk to each other.

Good examples are functions like claims processing for insurance companies or compliance management and anti money laundering for financial services organizations. These are usually relegated to fairly repetitive manual clerical work force. They are not really making the best use of human capital where you can actually automate a lot of these functions at the input/ouput levels of the computer systems. It’s almost similar to recording an Excel macro.

>>>

1Mby1M Virtual Accelerator Investor Forum: With Asheem Chandna of Greylock 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 Asheem Chandna, Greylock Ventures was recorded in September 2016. 

Asheem Chandna, General Partner at Greylock Ventures, talks on the topic of funding fat startups, something Asheem has done routinely, one of the very few VCs still doing so. Very interesting discussion.

Sramana Mitra: We’re going to start with some level-setting. You’re one of the very few VCs who still practices real venture capital – as in financing concepts for developing significant products. These are not revenue-generating businesses, which is where venture capital is slowly moving to or has already moved to. Please share with us a couple of case studies of concept to scale financing that you’ve done and that have worked out particularly well. What is your thinking in how you choose to do those kinds of businesses? What can we learn from it?

>>>

1Mby1M Virtual Accelerator Investor Forum: With Cem Sertoglu of Earlybird Venture Capital (Part 3)

Sramana Mitra: I know you read some of my writings. I’m a huge proponent of bootstrapped entrepreneurship. Having worked in this ecosystem for all these years, I’ve observed the development of different ecosystems in different parts of the world.

Bootstrapping happens to be one of the really important ways that ecosystems come up. You get a few startups that become successful in a bootstrapped manner. Then the investments start.

What is the status of the Turkish or Central European ecosystem vis-a-vis bootstrapped entrepreneurship? Are you seeing a lot of bootstrapped companies getting further along and then seeking funding? >>>

1Mby1M Virtual Accelerator Investor Forum: With Ashmeet Sidana of Engineering Capital (Part 6)

Sramana Mitra: As a VC, how do you figure these things out? These are not easy to figure out.

Ashmeet Sidana: It comes from good judgement. Good judgement comes from bad experiences. You have to try things. As you can see over here, I have no shortage of gray hair. Some of these have come from having done well, but some of them have also come from making mistakes.

I don’t think we have yet distilled this into a formula or a method. I can tell you that you can spend an hour with a person and walk away with a deep impression of, “Is this person truly motivated? Are they just interested in status?” You talk to a person who >>>

1Mby1M Virtual Accelerator Investor Forum: With Cindy Padnos of Illuminate Ventures (Part 5)

Sramana Mitra: One of my observations is lots of stuff have already been built. Nowadays, there aren’t so many wide open opportunities, especially in B2B that you can consistently build billion-dollar companies. There are many niche opportunities.

Some of these businesses need to be built for very small amounts of capital – $1 million to $2 million and then sold for $10 million to $15 million. Maybe even smaller – $250,000 to $500,000 and then sell for $5 million to $10 million. Do you have appetite for these kinds of investments? What is your analysis of this dynamic in the industry? >>>

1Mby1M Virtual Accelerator Investor Forum: With Cem Sertoglu of Earlybird Venture Capital (Part 2)

Sramana Mitra: What do you see? Is it B2B or B2C? Where is the sweet spot of your entrepreneurs?

Cem Sertoglu: We have two very distinct strategies that we focus on. The first is what we call local champions. These are focused on large markets. We would probably back these companies only in markets like Turkey, Poland, Ukraine, or Romania, but not Slovakia or Estonia where the local market is not big enough. In these businesses, we look for proven business models and technology. These are models that have worked elsewhere.

Sramana Mitra: Concept arbitrage. >>>