1Mby1M Virtual Accelerator Investor Forum: With Darshan Vyas of LOUD Capital (Part 2)

Sramana Mitra: It’s interesting to see that you guys are seeing AI in the midwest as well. It’s good to know that that’s a pervasive trend even in your part of the universe. From your fund’s point of view, what kind of ventures are you looking to invest in? What is your investment thesis and where do you really want to focus?

Darshan Vyas: We’re really interested in artificial intelligence. When we invest in companies, I try to identify companies where we can add value by incorporating our network into that company. If we can add value to that company, then we will make that investment.

Sramana Mitra: Help us understand where your network is so we can send those types of companies your way.

Darshan Vyas: My background is in healthcare. We have about 60 investors that are all physicians who all play different roles in different hospital settings.

Sramana Mitra: Healthcare IT seems to be your sweet spot.

Darshan Vyas: Correct. I used to have a healthcare IT company that I started in 2004. I exited that in 2015. During 2012, knowing my company was coming to an exit, I actively started investing in startups here locally to help motivate and inspire them.

Sramana Mitra: What about geography? What is your sweet spot? Is it Ohio only?

Darshan Vyas: We are opportunistic. We look all over the US. We have two companies in California, one in Florida, and one in New York. A majority of our investments are here in the Mid-West. We’re open. It’s easier to manage a company if they’re here locally.

Sramana Mitra: Talk about your current portfolio. What are the highlights? What have you invested in? What stands out as companies that are doing really well?

Darshan Vyas: One of our investment is Genetesis. They do a lot of artificial intelligence with healthcare diagnosis.

Sramana Mitra: Are they getting traction?

Darshan Vyas: They’re gaining tremendous traction. They’ve had successful clinical trials. Mark Cuban is an investor in this company. He’s the lead. They actually have a live product in the hospital. We have another company in the moving sector called Move Easy which uses AI as well to help automate the moving process for individuals.

If you’re moving, it will change your billing address and provide resources to help in that moving process. They’re getting tremendous traction. We have a healthcare IT company called Insight Health. They’re not raising money anymore. It’s a care coordination platform. They’ve been gaining tremendous success. Our portfolio is positioned for success at this moment.

Sramana Mitra: How do you process the current investment climate where capital is moving further and further upstream? When a venture fund becomes successful, they raise larger and larger funds. As a result, they can only make larger size investments.

There has been a lot of discussion in our universe about the Series A gap. Even a company that has seed stage financing is still not ready for a large Series A. What’s happening in your ecosystem? How are you processing, managing, and thinking about the Series A gap?

Darshan Vyas: We’re actually looking to launch a third fund. It’s a $50 million fund in 2018 that will fill that Series A gap. There’s a lot of investors that are more interested in a Series A fund versus an angel fund. That’s pretty interesting news especially in Columbus.

Sramana Mitra: Let me actually ask you a question on that. You said there were about 40 investors who came to your gathering yesterday. Of those, how many are $50 million to $100 million funds who can mitigate the Series A gap?

Darshan Vyas: All the companies that attended, except for one, is in the seed to Series A.

Sramana Mitra: I’m talking specifically about $50 million to $100 million funds. How many of the 40 are $50 million to $100 million?

Darshan Vyas: Of the 40, roughly about 30 of them are in that range.

This segment is part 2 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Darshan Vyas of LOUD Capital
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