1Mby1M Virtual Accelerator Investor Forum: With Venktesh Shukla, General Partner at Monta Vista Capital (Part 2)

Sramana Mitra: I am very intellectually curious. I feel very humbled with how little I know about all these segments that we are working with. At the same time, there are methodology elements that we have come up with in doing this for such a long time that apply to a lot of different scenarios.

Let’s say you’re doing B2B selling to small businesses, there’s a playbook for that. If you’re selling to enterprises, there’s a playbook for that. If you’re doing B2C transactions, there’s a playbook for that.

It’s been really interesting. The value addition is this knowledge of the playbooks and the predictable steps. Then there is the market that always surprises us. 

Venktesh Shukla: If you have a playbook for VCs, please share it with me.

Sramana Mitra: We can talk about some of that. We’ve talked to several hundred VCs who have been doing smaller funds and are interested in early stages. Let’s start though with where you are investing right now. What sized checks do you write? What kind of validation do you want to see before you’re willing to write a check?

Venktesh Shukla: We invest in B2B. We typically invest in our backyard, which is in northern California. We typically write checks of a million dollars. It could be smaller if there are other investors. It could also be as high as $1.5 million.

In terms of stage, it could be just one or two person with an idea with nothing else. We tend to be unusual in that regard. If we like the idea and the founder, we are willing to write a check. 

Sramana Mitra: Would you say that everything that you’re investing in B2B is SaaS model?

Venktesh Shukla: Not necessarily. If I were to look back and try to find a pattern among the investments we made in the first and second fund, we see a pattern that stands out. One is cloud application and infrastructure.

The second one is enterprise software which is more often SaaS. The third category is application of cutting-edge technologies to traditional industries with a view to completely transform them.

We like entrepreneurs who have some unique technology insight about how a traditional industry can be transformed with technology. That may or may not be SaaS.

Sramana Mitra: What is the fund situation? It’s been a while so you probably are on the second or third fund at this point?

Venktesh Shukla: The first fund was $10 million. The second was $15 million. Right now, we’re just starting the process of raising a $50 million fund. 

Sramana Mitra: How many companies have you invested in from the first and second funds?

Venktesh Shukla: With the first fund, we invested in 22 companies. Then we realized that the companies that we are getting are very good companies. We should take a more concentrated position because our operating philosophy is we work very closely with the entrepreneurs. We don’t need to invest in so many companies. All that we need to do is put more money in a smaller number of companies.

For the second fund, we invested only in 13 companies even though the fund was 50% bigger. We’ll take the same approach for the third fund. We’ll invest in only up to 15 companies. 

This segment is part 2 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Venktesh Shukla, General Partner at Monta Vista Capital
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