1Mby1M Virtual Accelerator Investor Forum: With Andrew Cain McClary of KdT Ventures (Part 3)

Sramana Mitra: In your deal flow, what kind of trends are you seeing?

Andrew Cain McClary: On the tools side of things, I feel like everyone feels it’s a prerequisite to put AI or machine learning in whatever they’re doing even when sometimes the datasets are not there for them to include that in a pitch deck. It’s just trying to employ traditional data science techniques. There’s no need for those frontier computational technologies.

I’ve seen quite a bit of traditional tech entrepreneurs who have turned to, what they think, feel, or want to be, impact projects, at which point, you see them switching to biological topics or businesses. I think that’s a wonderful thing. However, they need to be constantly be buffered by those that are traditional subject matter experts because it takes a long time to really learn what you don’t know within biology.

It’s always important to build out that appropriate team. It’s not just good enough to be a good entrepreneur because in my business, there aren’t a lot of pivots. With other traditional tech venture businesses, they have the ability to pivot. I see quite a few tech entrepreneurs that are actually moving over to the biological sciences as well.

Sramana Mitra: Interesting. In your industry, how do you parse unicorn mania?

Andrew Cain McClary: There aren’t as many biological unicorns yet because we’re early in the cycle to be totally honest with you. We have a few that exist. It doesn’t concern me yet because we’re so early in the lifecycle. That being said, the pressure to produce for LPs is intense mostly because of the media’s treatment of those unicorn valuations.

They’re very good things to write about. At the same time, being a seed fund, I’m not as concerned about unicorn mania because if we do the math on my fund, I only need to create a single unicorn’s worth of value in the economy to return a significant return to my LP.

Sramana Mitra: That’s an oversimplification of the issue. Your stage fund can get gobbled up in liquidation preferences. I think this is an issue that has not yet come up for you yet.

Andrew Cain McClary: Having a $15 million fund, that’s backed by a number of LPs so that special purpose vehicles can be made very quickly and stood up overnight to continue following on to companies that may have reached unicorn-esque status.

Sramana Mitra: Yes, that is a strategy that people are using with micro-funds.

Andrew Cain McClary: That’s important to know and something important for entrepreneurs to ask those GPs that they’re pitching on whether or not an opportunity fund could be stood up if things are going well. As a GP, that’s a discussion you have with your LPs.

Sramana Mitra: What are your parting comments to our entrepreneurs who would be interesting in working with you?

Andrew Cain McClary: I’m easily accessible. I translated the Hippocratic oath that I took in medicine over to venture and entrepreneurship. My goal is even if I don’t invest in an entrepreneur, I help them take that next step whether that’s an introduction or a strategic critique that I could help them build the business for a better conversation either with me down the road or with someone else.

I’m available to speak with anyone from company formation into later stage companies. I’m just thankful to be part of the technology stack that is meaningful and impactful to the world.

Sramana Mitra: Great. It’s a very interesting trajectory that you followed from medicine onto startups. Thank you for sharing your views.

This segment is part 3 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Andrew Cain McClary of KdT Ventures
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