1Mby1M Virtual Accelerator Investor Forum: With Sumant Mandal, Co-Founder and Managing Partner at March Capital (Part 2)

Sramana Mitra: As you know, we have run 1M1M as a global virtual company right from the beginning, so nothing changed in our workflow. We don’t do anything in person.

Sumant Mandal: If you have kids at home, they are very keen for you to go back to the office, especially teenagers.

Sramana Mitra: Yes, I see work-from-home workers have a hard time with small children in particular. Let’s catch up a little bit with the situation in March Capital. What size fund are you right now? What size checks are you writing? What is the focus of your investment thesis?

Sumant Mandal: We are now investing in our third fund. We are seven years old this year. We have a little over $1 billion in management. We managed to raise our third fund during the pandemic, which is an interesting experience. It was interesting to meet investors all over the world like this from your home office. It has been an interesting time for technology. We have been lucky to be in an area where people have more interest than not.

Our new fund is $450 million. We did a final close on the fund on December 31 2020. With the fund that size, our average investment is close to $20 million. From a Series A, it could range from $5 million to a pre-IPO round where we are putting $40 million to $50 million into a company. The average is $20 million.

Our core focus remains the same – enterprise software, B2B, cyber security, industrial software, and e-commerce enablement which means fintech payments etc. Nothing has changed in our focus area. We have seen our average investment size go up over the years. 

Sramana Mitra: To write a $5 million check in the kind of deal that you go into, what do you need to see as existing proof of marketing adoption and so forth?

Sumant Mandal: When you are writing a Series A investment, there are only two things that you need to have a point of view on. One, the quality of the founders and the team. By quality, you are asking if they have done this before, if they have the potential to build something of value, and if they are capable of attracting talent. This is important because the battle in a startup is always about people. How do you hire good people? There is such a fight for the quality of talent. That is the biggest challenge in front of small companies.

The second is the size of the opportunity. It doesn’t have to be an opportunity that is huge today, but what is important is your belief around it being large in the long term. Those are the two things that we focus on. We don’t do many Series A anymore. We look for a little more traction when we invest, but when we do invest we are happy to do it just by ourselves. We can put in $10 million and buy 30% of a company and help someone succeed. 

This segment is part 2 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Sumant Mandal, Co-Founder and Managing Partner at March Capital
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