1Mby1M Virtual Accelerator Investor Forum: With Sumant Mandal, Co-Founder and Managing Partner at March Capital (Part 4)

Sramana Mitra: The pool of talent has also broadened. Even a little country like Uruguay now has a couple of unicorns. I remember we did a case study a long time ago where there were two founders that met on the internet. One was from Ireland and the other was from Montevideo in Uruguay.

When I saw this unicorn from Uruguay, I was like, “Wow. A little country has come up in the process.” Estonia, of course, is churning out unicorn after unicorn and has become a startup nation. There are some interesting talent sourcing and team architecture changes that are happening in the world right now in how companies are being built.

I want to come back to another point that you made about Hive. Ravi is a close friend of ours. We’ve observed what he has done with Hive. My understanding of Hive is that it is an accelerator that’s built with small capital – about $250,000. It seeks early exits for the entrepreneurs. Is that still your and Ravi’s point of view or are you getting back to the traditional model of being a feeder to the later stage venture capital? 

Sumant Mandal: The way the Hive is structured, it has the ability to put between $2 million and $5 million over the life of the company. It’s not $250,000 only. $250,000 is the first money towards figuring out if there is merit or not. This basically amounts to one person’s salary for a year. That is just the starting point.

The Hive can, will, and has built companies for the long term. Companies like Foghorn have gone out and reached $70 million to $80 million. Stuff like that is coming out of the Hive. If a company sells early, then it sells early. We sold a company called Kosei after putting $1.5 million in it to Pinterest. We had Pinterest stock, so we participated in the Pinterest IPO. It has done well on that model as well.

The Hive is different from the YCombinators from the world. It doesn’t do classes of startups. It will probably do one or two companies a year and then focus on building a company, which includes building the right team, getting to the customers, and showing product-market fit. Sometimes, a company is in the Hive for two years plus before it goes out and raises a Series A. Obviously, over time you learn, adapt, and learn new kinds of mechanisms.

I think the key for the Hive, March, or anybody you talk to is going to be how you are going to attract the right talent. If you think about success and failure for these companies, that is what I think is the key. Everyone has good ideas. You could be off on market timing for a year and stuff like that. Technology also generally works. It’s not like you invest in something and it just doesn’t work. It’s how to attract the right talent. For Hive, it’s a challenge. For us, it is a challenge. I’m sure that you hear this from all the entrepreneurs that you work with.

This segment is part 4 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Sumant Mandal, Co-Founder and Managing Partner at March Capital
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