1Mby1M Virtual Accelerator Investor Forum: With Sonali Vijayavargiya of Augment Ventures (Part 2)

Sramana Mitra: Tell me more about the business model. A large percentage of enterprise software is sold via the subscription business model. So is that your business model?

Sonali Vijayavargiya: Exactly. Most of our companies have a subscription business model. Investors value the recurring model. I feel that products don’t walk by themselves. You have to get engagement.

Some element of managed service is good in a company because that shows you understand how you will support your client and have a long-term value in the product that you’re selling. Some investors that I’ve tried to collaborate with are not interested if there’s a managed part. 

Sramana Mitra: Let me use that understanding of your investment thesis to ask the question. To write a $250,000 or $500,000 check, what do you want to see by way of proof point in the company? Do you want to see a certain MRR level? How do you decide what threshold you want to engage in?

Sonali Vijayavargiya: Professional engagement is getting to a later and later stage. As I mentioned, we are not taking discovery risks in most of the cases. We are taking execution and growth risks.

When we engage with a particular company for any kind of opportunity, we are looking for a massive market. Cost of capital for VCs is very high. We have to give remittance to our investors. What we are looking for is massive market, team cohesion, and customer engagement. At that level, we don’t have a strict level of revenue.

What we are really looking for is, how can this technology or product create that impact and value? For us, the market opportunity and the team cohesion plays a fair amount of weight. Even if they haven’t signed on a paying customer or are still in pilot, we spend a fair amount of time talking to customers and discovering customers.

Sramana Mitra: Talk a bit about a few of your investments. Walk us through your thinking. What was it that they had that made you write the check?

Sonali Vijayavargiya: One of the companies is a supply chain company called Llamasoft. That was part of our ecosystem. They decided to pivot to a SaaS model and grow the company. I knew them from my community.

While doing due diligence, we engaged with Nike and some other groups. Augment orchestrated that investment with Nike Ventures. We got a partial exit for that deal for $360 million and were able to give great returns and outcomes to investors and founders.

That thesis was about how the solution was going to impact profitability, visibility as well as sustainability in the supply chain. It’s a massive market and the engagement was from the local community.

Sramana Mitra: Was Nike the key customer?

Sonali Vijayavargiya: Yes. The company came to us saying that Nike is their customer. Nike’s entire supply chain is based on the backbone of Llamasoft. It was good for the company. It was good for us. They got a lot of good validation. That was exciting for us. 

This segment is part 2 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Sonali Vijayavargiya of Augment Ventures
1 2 3 4