1Mby1M Virtual Accelerator Investor Forum: With Nihal Mehta of ENIAC Ventures (Part 4)

Sramana Mitra: Based on what you said, I want to provide some commentary to our audience about the team issue. You hear me talking about multiple co-founders and he’s talking about a full-stack team. Those two are mutually dependent. You can only have a full-stack team if you have multiple co-founders.

If you have to hire people and build out a team, you cannot complete a team by hiring at that stage with that little resource. Certain investors would only invest in full-stack teams at the seed stage and the only way to get to that is with multiple co-founders.

Nihal Mehta: There’s one addition is in many cases, you have solo founders. They are technical. They can build and ship products themselves, and they have some business acumen. If you can build and ship or you’re technical, then that’s okay. You can hire business people around you after you raise money. You, yourself, are full-stack. You could have a solo founder who’s full-stack as well.

Sramana Mitra: That’s actually very good elaboration. We get this question a lot, “Are solo founders fundable?” Generally, investors prefer not to fund solo founders except in the case that you’re talking about where the solo founder can build businesses by himself. Then you can flesh out the team after funding.

Nihal Mehta: The dependencies are key. If they have to outsource to an agency to build the product at that early stage, it’s much harder to get off the ground. You want founders to eat, sleep, breath their business and be able to ship on the weekends.

Sramana Mitra: It depends on what the product is. If you’re talking about e-commerce, you can outsource to any number of outsourcing agencies for the core platform. If it’s a merchandising-based venture and the founder’s core competency is merchandising which was the case for the founder of NastyGal. They ended up mucking up that whole story, but she was doing very well on her own.

Let’s talk about what you are seeing in your deal flow. I’m trying to get to the trends in the market right now. From your vantage point, I’m sure you’re seeing thousands of deals per year. What’s popping out as trends?

Nihal Mehta: We see about 500 to 600 deals a month. We end up investing in about one per month. These days, about a quarter of our portfolio are hard tech. We’ve done a software for autonomous private aircrafts. Autopilot hasn’t been upgraded in decades, so this is the next version of that. We have an AV company for cars that helps predict objects in front of the car so the car can move around.

We have software that powers autonomous cargo ships. We’re seeing a lot more of those robotics companies. That’s one area. In general, automation is hot. We’re seeing a lot of SaaS that’s working on automating the enterprise. We have one company that is in the RPA space – robotic process automation. RPA enables any enterprise to automate a bulk of their manual labor.

These are into data entry and pulling data from disparate systems. Traditionally, these jobs were outsourced through BPOs. Now you have software that uses computer vision. It watches what employees are doing and then automates those processes. The fastest-growing enterprise company in the world is in this category. It’s called UIPath that just announced a raise from Sequoia. In two years, they’re already at a multi-hundred million dollar run rate. We’re also seeing a lot in FinTech and insurance.

There’s a lot of disruption happening with traditional B2C banks and the way that millennials spend and save money. They need new interfaces and new user experiences than just the traditional banks. Also, all the infrastructure behind banking and insurance companies is being disrupted because they’re incredibly inefficient.

This segment is part 4 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Nihal Mehta of ENIAC Ventures
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