1Mby1M Virtual Accelerator Investor Forum: With Rajeev Madhavan of Clear Ventures (Part 2)

Sramana Mitra: An aspect of running a company that’s not pleasurable at all.

Coming back to Clear Ventures journey, let’s double-click down a little bit on what stage are you looking for. When you say you are willing to put in very early stage, what are you looking for in terms of validation? Are you looking for just concept or revenue? What is comfortable for you?

Rajeev Madhavan: We have done all the way where the concept was not fully baked. We have had people who just sit here with us. We take them to some of the customers and refine the generic idea. We’ve done investments at that stage.

In 2012, I was doing my own angel investment. I dealt with a company where the concept was not fully clear. We knew there was an opportunity. There was a company called Robin Systems. It took some changes to get there, but eventually we got to the point of understanding that we need a generic infrastructure using containers for very deep, highly distributed applications, allowing them to run in scale.

The program was ill-defined and we helped define it. We’ve done all the way to half-baked ideas to where they can show you some demos. In the early concept stage, we can actually help by taking them to customers. There are numerous amount of companies who have pitched to us even if we have not invested in them. They appreciate the fact that we take them to real customers and spend time with them.

I almost act like a VP of Sales helping them sell because it’s my job to help them sell. It’s trying to get that product definition right at the concept stage. We can start from that very early cradle stage. There is no need for proof for us. We will try to get that proof by working with you and helping understand how to refine your product idea into something that works.

Sramana Mitra: Also double-click down for us in terms of sectors. You said B2B is the primary comfort zone. Within B2B, where are your primary relationships? Obviously, you seem to have relationships where you bring people into customers. What are the unfair advantages that you have in the fund?

Rajeev Madhavan: Running companies where most of the Fortune 500 have had to buy something. That’s where our customer experiences are. I am not shy, and I don’t mind calling any people and spending some time with them. Our comfort area of B2B could be the financial sector or the healthcare sector customers.

I have a company in the retail space called Reflektion where the customers were all sorts of retail players. We brought in a founder who knew and had done a company in that space. We brought him in as a co-investor with us to build that relationship, which I frankly lacked. Having him on-board helped to get to those customers.

It’s a question of trying to figure out how to get there. Each company is different. What we look for is the entrepreneur’s drive, past experiences, and if they are credible in the area in which they are claiming to be able to deliver. Everything else, happy to work with them.

Sramana Mitra: Are you doing cyber security?

Rajeev Madhavan: We have done some security companies. We have one company in cyber security that is into protecting your files and assets. It’s a very tough area. We’re a little bit concerned about the valuation prospects of some of those very small hole-plugging companies.

This segment is part 2 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Rajeev Madhavan of Clear Ventures
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