1Mby1M Virtual Accelerator Investor Forum: With Rajeev Madhavan, Founder and General Partner at Clear Ventures 2021 (Part 6)

Rajeev Madhavan: If you look at that space, Andy Bechtolsheim was a big investor. He would invest his money to help get rid of the issues that he sees in that space. That applies even today, except that now you have a lot of investors in Silicon Valley, so your ability to get that small level of funding is much higher. It may not be VCs like us. We may occasionally do that because we want to build entrepreneurs in general.

We find somebody who is doing something. It’s going to be what I call a drive-by shooting. Basically, you are going to get something done and you are going to get an exit. We would invest in that founder because we have a hope that the founder will do something that is more in our sweet spot in the next flight.

Anyone who has done a startup never stops. You become a little bit unfit to work in a big company for a long time. As a venture capitalist, you want to make sure that you are beholden and friendly to them. We do those investments, but it is not common. 

Sramana Mitra: I would imagine that you would invest in companies that would start with one use case and then be brought in into a full platform – an API system. Those are venture-scale companies. They will probably be a few hundred venture-scale platform companies and there will be millions of small companies building on top of those. 

Rajeev Madhavan: To be fair, when you have this kind of $300 million-plus fund, you end up not being able to write those. Only if that entrepreneur is exceptional that we write that check in the hopes that we can win his next business.

That is what we would do. I would tell all the entrepreneurs in your audience that there are a lot of people with a lot of money in Silicon Valley that know the problem. You can raise money but not from traditional venture capital.

As a commodity, you can raise it from people who understand the space. These are your users or entrepreneurs who have done things in the usage space of your products. The investment need in building on a Salesforce platform is much lower than what you would need if you were building it from scratch. 

Sramana Mitra: We are interested in partnering with the companies that are trying to build these ecosystems and use our influence in the startup world to help in building those ecosystems. You need all of these things that we have brought together as a virtual accelerator to accelerate those ecosystems. I am interested in finding those trunks that are going to be the hubs of these ecosystems. 

Rajeev Madhavan: What COVID has shown is that you could be in any part of the world and work on that. As an entrepreneur, it is not just about the size of the company. It is dependent on where you are on your stage of career growth.

You may start with something small. Some may start with something crazy and big that would take a lot of venture financing. In which case, the thresholds of what you need to raise and how you need to be able to do that are very different based on what you are trying to achieve. 

Sramana Mitra: Thank you for your time.

This segment is part 6 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Rajeev Madhavan, Founder and General Partner at Clear Ventures 2021
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