1Mby1M Virtual Accelerator Investor Forum: With Alok Nandan, Founder General Partner at First Rays Venture Partners (Part 2)

Sramana Mitra: You are looking for a founder that you feel good about. That is your answer.

Alok Nandan: Unfortunately, it is subjective because at the seed stage, you don’t have that many metrics to go after. Series A and beyond, you have numbers and data that you can look at. At the seed stage, you don’t have numbers. A lot of times, it is a qualitative bet and less quantitative. The qualitative bets are around the domain expertise, ability to execute and go after hard problems. Some of that is demonstrated by our past experience.

Sramana Mitra: Does that mean that you are looking for serial entrepreneurs only?

Alok Nandan: Not necessarily. If first-time founders have worked in other startups that were fast-growing or if they have worked in other companies where they have demonstrated that they can take on a big problem, that is something that we actively look for.

Serial entrepreneurs would be great too, but that is not the only criteria for us. There are other ways in which a founder can demonstrate that they have this ability to venture out and do something. It doesn’t have to be their own company. It could be part of some other startup or some other bigger company as well.

Sramana Mitra: Let’s double-click on the 10 investments with this picks and shovel investment thesis. Give us some examples of what you have invested in and tell us why you have invested in those startups. Tell us the specifics of the startup. Was it a first-time founder or a serial entrepreneur?

Alok Nandan: I can talk about one that I am excited about. They are not fully public yet, so I can’t about all the things, but I can give the contours. There are two founders. They are in the Valley. They both have twenty-plus years of experience in the networking space. They have worked in companies like Cisco, Juniper, and so on. One of the founders, the CEO, was in a venture-backed company as the VP of Engineering.

The other founder was in another venture-backed company. They are both engineers. COVID has accelerated this work-from-home remote work. A lot of venture capital dollars have gone into the next way of collaboration whether it’s the next Slack or whiteboarding tool.

There is another section of the team – the engineering team and the DevOps team that are also working from home. The kind of work that they do have become ten times harder in this remote environment. I will give you an example. When software is deployed in the cloud so that people can access it, it requires you to upload a bunch of data. If you are working from home, your internet bandwidth is not as fast as when you are working from the office. Typically, the speed of the internet at home is much slower. If I am trying to upload a lot of data from my home, it’s going to take forever.

My job now is ten times harder. If you are familiar with the SolarWinds attack, that is going after this exact workflow of DevOps tools accessing data and code in the cloud when you’re uploading your software so that everyone can access it. It was a supply chain attack. What this company is doing is building a cloud-native version of what is known as privileged access management on a pam. It was a cloud-native pam.

There is a company called Cyberark. There is another company that was recently acquired by TPG for $1billion. It is a company called Thycotic. They are previous generation pam tools. There is no cloud-native pam tool that exists in the market today, especially one that works in this remote environment where every engineer is working from home in trying to access these cloud resources in a secure manner.

That is an example of picks and shovels. It is cybersecurity and a DevOps tool that enables people to work in a performant and secure way from wherever they are working in a remote environment. There is an AI inside it but that is still being built out. That is a broad contour of the investments.

This segment is part 2 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Alok Nandan, Founder General Partner at First Rays Venture Partners
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