1Mby1M Virtual Accelerator Investor Forum: With Venktesh Shukla, General Partner at Monta Vista Capital (Part 3)

Sramana Mitra: If you were to look back on the 30 companies that you invested in, which ones are concept-stage ventures that you have invested in without anything already built?

Venktesh Shukla: Practically every one of them. 

Sramana Mitra: Very interesting. That’s actually unique. I’m going to give you some feedback on what’s happening in the venture world. There’s a lot of money available for companies that are doing some level of validation work and ideally generating some level of traction.

People vary their investment thesis. The early stage has splintered into pre-seed, seed, post-seed, pre-Series A, small Series A, and large Series A. In that spectrum, there are people who are investing in companies with a million ARR before they’re willing to write a check.

People have picked up different milestones and they’re coming in those stages. The venture capital that is willing to invest on just concept-stage ventures is very limited.

I will, first and foremost, congratulate you on that investment thesis because that is a style of venture capital that dates back to my youth. That is disappearing in a way. I’m thrilled to hear that you are practicing that pure play venture capital. You’re putting in a million dollars into concept-stage ventures. That’s also quite rare.

Venktesh Shukla: We try to syndicate. Every single time, we find that there aren’t many people who are willing to invest in a company that has nothing yet. Unless the founder has already found someone, we don’t waste our time any more on it.

We are willing to take the risk. A million is not going to get you very far. It will certainly not prepare you for Series A, but it will get you far enough so that someone else will want to invest at that stage.

Sramana Mitra: Are these all Silicon Valley companies?

Venktesh Shukla: Yes. That’s one lesson that we learned. We like to interview the first employees. We like to help them think through the strategy and product-market fit. The first 50 or 100 decisions that founders make lays the foundation of the company. We want to be involved in those conversations.

Physical proximity makes a difference. If this virtual way of meeting will remain, then the justification for investing only in northern California would go away. It looks like this physical thing is not that far away. In another couple of quarters, we might still be able to meet for coffee.

We have a standard policy that any one we invest in has a right to talk to us any time they need to. It doesn’t matter if it’s 11 o’clock at night, it’s a weekend or holiday. With time zones, it becomes very difficult.   

Sramana Mitra: You’ve worked a lot in the India-US corridor. Do your companies tend to have an India backend as they scale?

Venktesh Shukla: It’s not mandated. Different companies make different tradeoffs. Some companies do have an India backend. A lot of others don’t. Some of them are Silicon Valley-based. Some of them have Eastern European employees. It’s all over the place.

This segment is part 3 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Venktesh Shukla, General Partner at Monta Vista Capital
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