1Mby1M Virtual Accelerator Investor Forum: With Julien Pham, 3CC Third Culture Capital (Part 6)

Sramana Mitra: I’m asking a simpler question. Are these all B to B companies – businesses selling to hospitals or insurance companies or pharmaceutical companies?

Julien Pham: Oh, we do a little bit of everything. We have a few B to C, B to B, or B to B to C companies because end user oftentimes is the patient. If you remember, one of our important screening criteria of the quintuple aim is, how does it improve outcomes for patients? So we want to make sure that it somehow touches patients.

Sramana Mitra: Everything touches patients eventually, but if you remember, I recently published a very elaborate series on startup velocity. I want to shift the conversation to the velocity question a little bit because it is very pertinent right now. I’m having lots of conversations with investors and entrepreneurs on this topic.

When we started 1Mby1M, there were maybe 6,000 venture funded companies at any given time. Now, at the end of 2023, that number in the United States was 54,000. When we started in 2010, India was not even on the map yet. India has now exploded. Then, Europe has really come up. Europe was also very, very nascent in terms of the technology startup industry.

Basically in the last 14-15 years, the whole startup industry and the venture capital industry around it has become a global phenomenon. Accelerators and incubators have exploded; there are 7,000 plus incubators, 3,000 plus accelerators.

So, there are probably a quarter million companies out there that have some form of financing. Maybe it’s just pre-seed financing that didn’t make it to seed, just a little bit of seed financing that didn’t make it to Series A, but there are probably a quarter million companies that have a little bit of financing. So if you look at what the venture capital industry has traditionally tried to do is build really fast growth companies, to go from zero to $100 million in five to seven years.

Now, 250,000 companies are not going to go from zero to $100 million dollars in five to seven years. It’s impossible, right? That kind of velocity is impossible to achieve with that many companies. That’s an exception, not the rule.

So, the question that I’m asking is, how are you managing your portfolio? Are they achieving velocity? What are you seeing in your portfolio?

Julien Pham: I love this question. Since we have seed and pre-seed companies, I get to see a vast amount of companies that are not really what I call startups. They’re VC-backable startups. So let me start there, because I think the question you’re asking is, of the startups, which ones are truly the ones that are going to achieve that escape velocity and kind of get to that $100 million. Some people even struggle determining a series A, right? That’s something that happens, in series A and series B, but the earlier you can somehow find the signal that these companies are on that trajectory, the better for everyone.

Oftentimes, I meet these great founders who’re pitching me for early checks. They may already or may not even have some friends and family capital. So this is super early stuff. I tell them that, there’s startups and there’s businesses. There’s absolutely no shame in building a company that’s going to be profitable and build generational wealth for you and your family for the next 100 years. But that company doesn’t have to be a startup.

Sramana Mitra: Startup doesn’t have to be a venture funded startup.

Julien Pham: Exactly, it doesn’t need to be a venture startup. It is a startup.

This segment is part 6 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Julien Pham, 3CC Third Culture Capital
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