1Mby1M Virtual Accelerator Investor Forum: With Nitin Rai of Elevate Capital (Part 4)

Sramana Mitra: You said you like early exits. Does that mean that if the company is raising more money after your angel round, you actually sell out on those rounds?

Nitin Rai: If we have an opportunity, we will. The biggest issue for any company is when they hit the $2 million to $3 million threshold, they need substantial capital to scale, no matter what the industry. Depending on who the the investor is, many times you see these growth equity firms or large strategic investors coming in.

They may want to own most of the company. They may want to take a larger portion of the company. We’re the small potatoes. We may not have follow-on capital to keep our prorata. If the markups are great, we may just sell out. It could be a 2x in a year to 18 >>>

1Mby1M Virtual Accelerator Investor Forum: With Rajul Garg of Leo Capital (Part 3)

Sramana Mitra: Talk about your current portfolio. What have you invested in? What are the highlights? As you’re describing, give us some insights into when they came to you, what did you see that captured your imagination.

Rajul Garg: We only became a fund late last year and started investing. We’ve made four investments so far. One of the investments is a company called Flick Stock. Let’s say you’re a fashion commerce company in the US or Western Europe. If you put up images that are modeled images versus just a product image, your conversion is higher.

If you’re selling a shirt, you’re better off putting a model wearing a shirt versus just the image of the shirt. However, the cost of getting a modeled image is fairly high because you hire a studio, hire a model, and do editing. For smaller commerce players, it can be as >>>

1Mby1M Virtual Accelerator Investor Forum: With Nitin Rai of Elevate Capital (Part 3)

Sramana Mitra: We’ve done stories on other companies from Oregon that have that dynamic of very capital-efficient execution. We did a story on ShareID, which you probably know. I think they’re Eugene-based.

Nitin Rai: I’m an early investor.

Sramana Mitra: We did that story very early on. They were already quite successful. They were already over $5 million in revenue but with very little capital. We love stories like this. The truth is this is how the entrepreneurship ecosystem of the world – not Silicon Valley –  works. We’ve done case study after case study of these capital-efficient success stories. >>>

1Mby1M Virtual Accelerator Investor Forum: With Rajul Garg of Leo Capital (Part 2)

Sramana Mitra: On the B2C side, the Indian investors are investing in mostly India-facing companies. Is that also your preference or are you also doing global B2C? The counterpoint of that is when it comes to SaaS, we see Indian investors mostly interested in doing global-facing companies and not so much the India-facing companies.

There may be validation level work in India but the Indian VCs have decided that when it comes to enterprise or B2B, they prefer the global-facing SaaS.

Rajul Garg: Pretty much guilty on both counts. The domestic market of India is very large. Growing internet penetration and middle >>>

1Mby1M Virtual Accelerator Investor Forum: With Nitin Rai of Elevate Capital (Part 2)

Sramana Mitra: What about industry trends?

Nitin Rai: We see a very diverse group of entrepreneurs. Between 40% and 60% are technology. On the technology side, we see SaaS, VR/AR, IoT. We see a fair amount of medical device type of companies. We see apparel. We see sports.

Sramana Mitra: Let me double-click down. We are exclusively focused on IT and IT-enabled services. I’m going to double-click down on your activity in that sector. I have a few questions based on what you said. What are you seeing in AR/VR? Are these content deals? Are these equipment deals?

Nitin Rai: Most of them have been software deals. I can’t disclose the details yet because the investment is not closed, but it’s actually >>>

1Mby1M Virtual Accelerator Investor Forum: With Corey Schmid of Seven Peaks Ventures (Part 4)

Sramana Mitra: Is there anything else that I should have asked you?

Corey Schmid: I’m curious to hear your thoughts a bit on the correction going on in the market now.

Sramana Mitra: It’s way overdue.

Corey Schmid: It is way overdue. It’s not a crash. I think it’s a correction, and it’s happening. One thing that we tend to want to lean in is how do you weather that storm. If we’re investing at seed or even Series A, how do these companies ensure that they’re able to get to that next stage? Funding is moving upstream.    >>>

1Mby1M Virtual Accelerator Investor Forum: With Rajul Garg of Leo Capital (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 Rajul Garg of Leo Capital was recorded in February 2018. 

Rajul Garg, Head of Investments at Leo Capital, discusses the Indian startup eco-system and his fund’s investment focus.

Sramana Mitra: Let’s introduce you to our audience. Tell us about your investment focus. How big is the fund? What sized investment do you make? >>>

1Mby1M Virtual Accelerator Investor Forum: With Nitin Rai of Elevate Capital (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 Rai of Elevate Capital was recorded in February 2018. 

Nitin Rai, Managing Director at Elevate Capital, made a compelling case for investing in niche businesses with the upfront goal of scoring early exits. Excellent discussion!

Sramana Mitra: Tell us about your seed-stage investment activities. Let’s get to know you and get you introduced into our community.

Nitin Rai: I started out as an entrepreneur back in the 80’s in Silicon Valley. I moved to Oregon in the late 80’s. I started a company >>>