Meet Cathryn Chen, General Partner at Radiate Ventures
MarketX recently launched Radiate Ventures to invest in fintech, deep tech, and vertical SaaSRead more...
Venture capital used to be a cottage industry, with very few investing in tomorrow's products and services. Oh, how times have changed! While there are more startups than ever, there's also more money chasing them. In this series, we look at the new (or relatively new) VCs in the early stages: seed and Series A.
But just who are these funds and venture capitalists that run them? What kinds of investments do they like making, and how do they see themselves in the VC landscape?
We're highlighting key members of the community to find out.
Sai Supriya Sharath is Managing Partner at Carya Venture Partners
Sharath is a founder/general partner at Carya Venture Partners, a $20 million micro fund that invests in and mentors early-stage startups in deep tech, AI, B2B enterprise, and SaaS. She is also the founder and CEO of InKindOnly, a Bay Area-based nonprofit that enables local businesses and HNWI to contribute/pay for non-cash donations for grassroots social nonprofits in the area. Sharath held market expansion/GTM consultant roles at multiple startups including Spottabl (HR tech) and PacketZoom (acquired by Roblox). Her own ASR (automatic speech recognition) startup Ungarble was acquired in 2019. Before becoming an entrepreneur, Sharath led global expansion and customer success teams at Practo, Fiberlink (now IBM), Mobstac and Akamai. She holds a bachelor's degree in engineering and a postgraduate diploma in intellectual property rights and laws from the National Law School of India University.
VatorNews: Start at the high level of what the firm is all about. What is Carya Venture Partners’ philosophy, your methodology, and where you fit into the venture ecosystem.
Sai Supriya Sharath: First, let me tell you what “carya” means: it has a very significant connotation. It's a Sanskrit word, which means “work,” but it's just not work; it's more of what you would call in a Biblical sense a, “Let us do the best, God will do the rest” kind of philosophy, where you put your best foot forward, and the results will follow. So, that's the higher meaning attached to the word “carya.” The founding partners--the two of us--were like, “Okay, we’ve got to have this domain, Carya.com, because we are sure to use this in some way, shape, or form, and the moment we bought it, the whole thing fell into place and we knew we had to call ourselves Carya Venture Partners. Of course, there was a big debate whether we should call ourselves the underdogs, because that's what we felt we were, but there are too many underdog venture capital and PE firms and blah, blah, blah, so we were like, okay, “Carya Venture Partners it is.”
When we came together, we were all angel investors, we were founders ourselves, and every single time we would end up sharing some deal flow amongst each other. There would be others asking us, “Hey, is there something that we can get into you? You guys know your early stage ecosystem well, you guys know how to operate the thesis pretty well, so we'll just cut a check.” We were like, “Why are we not making this more formal? Why are we not putting together a small fund, where we will share the deal flow? We will continue to work as operators, because that's what we are.” When we figure out there's a startup or there's a founder, and it's early stage, there's a product market fit journey that needs to be achieved, and this is in our thesis area, why not cut a check and also get involved in whatever way we can?
This came to be only in April 2022--that's when the entity got created--but we've been investors for at least three or four years prior to that. So, we have five partners, one is me, one is Sharath Keshava Narayana, and one is Marty Massih Sarim; we met because of our overlapping investments or company in voice AI. And then Andrés Pérez Soderi came by because Sharath started working very closely with one of the companies that he founded and Andy Lee came in because Andy, (despite being the founder of Alorica, which is probably America's third largest contact center, and he deals with the who's who of the Fortune companies who run their entire contact center ecosystem on what he has built,) was like, “I get access to a lot of late stage deals, there are multiple funds that I'm a part of, but this thesis area that you guys have focused on is something that I'm extremely passionate about and I'd like to get my hands in. Not just as an LP, but I would want to be there when diligence happens, I want to be there on how we want to chart the journeys for these founders as such.”
So, it was a motley crew, as you may say, but we're all committed to one thing: how do we help early stage founders, especially founders with deep tech expertise in our thesis areas, which are deep tech A, and B2B enterprise SaaS platforms, how do we enable, especially these founders, to have the quickest product market fit, zero to one journey, with the least friction possible?
Because we have been operators, we understand this ecosystem very well; each of us has companies which we have built and sold, we’ve been part of multiple founding teams in this particular sphere, so we just wanted to make life easy for really, really smart tech founders who can build disruptive tech, who understand, who smell that secret. What we mean by “secret” is that they know what the next wave of disruption looks like. Knowingly or unknowingly, they have the pulse of the future addressable market for their startups, which is not today's not today's TAM, but something that's future. So, how do we help these founders?
That's how Carya came to be. That's our thesis, those are our areas of interest, so we decided that our check sizes will accordingly be between about $250,000 all the way up to $1 million dollars. We would start with a certain amount and journey alongside the founders and infuse amounts as required. We want to be the investors that every founder wishes that they had; if I had a startup, I would want a Carya as an investor in my own company, and that's the operational mission that drives us.
VN: You mentioned your thesis areas, so talk to me why those are your areas of interest. What's the opportunity that you see in those right now?
SS: The areas of interest are pretty simple, because all our journeys led us to our own personal inflection points when we started working with tech, especially in voice AI. I built a startup called Ungarble. All my friends, all my partners and colleagues were building startups about seven or eight years ago when voice AI was the next big thing. You’d use that to build financial models, to build support models, sales models, and they would always cry about a lack of clean data, so I smelled an opportunity. I set up a company where we had an ASR that could not only get trained to automatically detect and annotate voice, but we also had a human augmentation where we would clean it up to 99% accuracy in a short time, where it was cost effective and it became critical to training early models for most of the startups. We got acquired by a speech tech company and that's where we knew that the world is moving towards AI in a very specific way. I know it gets thrown around a lot, like AI is the big data of a few years ago, everybody wants to use that, but we see that, somehow, there is an explosion where not just newer technologies, of course I don't have to tell you about ChatGPT and those things kicking in, but people are also being very bullish about the applications that they’re building on top. No longer is it like, “we'll just do a layer of research and wait for posterity to pick it up and do whatever they want with it,” they would want to verticalize and also go horizontal. So, this is that layer of disruption which is probably akin to when CDN was founded or something like that, so that's how strongly we feel about where AI is poised to go but you need to have a vision to get there. We believe more and more founders understand that and are exploring ways in which they can make a difference, especially both in applied AI and in deep tech research as such.
VN: Obviously, AI has been in the news, like you said with ChatGPBT and all that. So, what is the macro trend that you're betting right now, especially when it comes to AI? How would you define that?
SS: AI has been put together in a slightly haphazard way, where systems have to be recalibrated and an entire set of hardware has to be built, software has to be built, where it becomes more and more consumable and usable. That is happening with one set of innovations that we see; ChatGPT has come in but ChatGPT itself is a heavy parameter deployment kind of an engine, so if you're trying to run specific tasks on that, or specific models on that, you will need capabilities to break it down and make it more effective. So, there is that, where existing systems have to be calibrated to make sure the future AI growth becomes more robust and it is extremely fragile, in a way.
On the other hand, the sky's the limit. We've been seeing pitch decks which are so futuristic you’d probably think it’s straight out of a sci-fi subplot or something like that! People are not shying away from pushing this in traditional industries, people are not shy in pushing this into robotics. These are a very polar spectrum of disruptions that we're seeing and this is coming from early, early stage ideas and companies because they're very confident in how it can get deployed. So, we think the bet is going to be all over; you can pick your poison. You want to go with building systems that are going to support these structures, or are you going to be looking at specifically vertical based structures, where these are going to have large scale applications, or you want to sit across? So, we believe that we know exactly where we want to be playing in: we want to have a play in traditional industrial applications, we have a couple of investments where AI is being used in supply chain, AI is being used in manufacturing, AI is being used in predictive analytics. Also, in the future with robotics, where AI will come in to hopefully revolutionize how farmers work, how shop floors or industrial floors work, where it becomes more worker- friendly and things like that. Of course, there is the deep tech piece. So, this is where we are looking at for our next few investments.
VN: What about a space like retail? Is that one that you've invested in where you see AI applications?
SS: Yes, we do have systems supporting retail where AI applications are looking. There's one company in our portfolio that's looking at using data in the right way to attract a B2C segmentation for large retailers in a way it has never been done. There was a lot of data that was going to waste; it was more of a marketing push and it was never a pull where you could understand and then incentivize the data in the right way. That is not a field that we have looked at very keenly, because most of our focus has been on these other things, but why not? Definitely.
VN: An area where we do a lot of work is in healthcare and I see a lot of applications there, too, although I did see some data recently that patients are very hesitant to incorporate AI into their healthcare, which is understandable, to a degree.
SS: Absolutely. Of course, there are ironclad data protection laws that govern the way AI has to work, like HIPAA is the holy grail, plus there are 100 other things that, thankfully, keep up with the innovations as they go. But we've seen certain companies where AI layering is very parallel to core data and it can sit aside and still improve functions in a myriad of ways, where the people can collaborate. There’s collaborative intelligence, there’s recognition, there's pattern recognition, there are suggestions to ensure, especially when healthcare patient readmissions, insurance and things are concerned, where they don't have to sit on top of core patient data as such. So, AI will find its way and will worm its way around privacy. But, yeah, we’ll have to be cognizant as investors to make sure that we are backing the right set of initiatives, founders, and platforms.
VN: What's the size of your current fund? How many investments do you make a year?
SS: We have a $20 million dollar microfund microphone. We started a year ago, we've done about 19 investments; we’re hosted on AngelList, which is a fantastic place for early stage funds like us to operate with a lot of operational ease. That averages out to about 1.3 or 1.4 investments a month, and a couple of our investments have been prior to when we started Carya. We had just cut checks in January and February of last year and we wanted to bring them into the Carya ecosystem.
Typically, the way we work is that quite a few of our pitches will come from referrals, existing founders, or founders whom we have worked with as colleagues and advisors in the past who want us to get in and help them. Then, of course, we have some connections into the Stanford network, we have connections into the Indian ecosystem, and quite a bit of our reference and portfolio companies coming from LATAM also. So, we are becoming geography- agnostic in a certain way because our motto is, “no matter where the founder is, if there is tech that we can back, we’ve got to be there.”
VN: Where does that fall into stage? Do you consider yourself to be a pre-seed or seed fund?
SS: We come at the pre-seed stage. Ideally, we'd like to insert ourselves before the product market fit journey starts, that's where we believe we can make the maximum contribution. We have cut checks which are dry powder checks because it’s a three- time founder or somebody that we know and things like that, but most of our portfolio companies are first- time founders. When they come with us, they have built a small prototype, there is an idea there is some bit of code and we try to help them narrow down their GTM and their path to a product market fit and get involved there. Of course, there is talk of Fund II; a lot of progress has been made and the fund has been very well received and the investments are already growing as we are talking. So, we would also want to spin off a seed to Series A arm and we also have plans to have an EIR function. We have kicked about a few ideas, and we would like to make sure we incubate them in the right way.
VN: So obviously there's lots of big plans for where you want to take the firm but at this point, it seems like you're at a very, very early stage. So, the companies that you invest in at this point, is there any traction? Any numbers that you want to look for?
SS: If you look at examples like Postman and stuff like that, where they go after the end consumers, and then consumers end up bringing in businesses, that's the new thing, or that's the way in which you get your technology vetted by the end beneficiaries or end users. Then the larger consumers come in and sign your enterprise level contracts and things like that. We have a bunch of those in our portfolio and they're all on path to their $1 million ARR journeys right now. We have a few companies like Correcto, which is Grammarly for LATAM, which has a business application and consumer application. They’ve already closed their Series A. From the day we got in our pre-seed round, we've been working with them for eight or nine months, and their traction has exploded.
Then there are multiple other companies, like there's Q Blocks, which is a decentralized GPU platform where you can deploy machine learning models at 80% of the cost that you would probably end up incurring on Amazon. They have about 15 healthcare tech companies that are using them already and there are more to come, there are more startups that are getting on boarded as we speak. And there is Goodmeetings, there's Humantic AI, these are all hardcore voice AI to intelligence and coaching engines, with great traction and great track records.
The way Carya works is we would encourage the founder and the product to get in front of their sandboxes as quickly as possible. And these sandboxes, for us, are potential future customers who would like to get ahead of technology themselves, where they have a direct alignment with the way the Carya works and they can work with the founders in creating a moat. This gives us an unfair advantage, if you will, where you're able to deploy, test, iterate, and go to market quicker, which is what is helping us out in most of our deals at this point of time.
VM: It sounds like you don't invest pre-product.
SS: We do invest pre-product. There are a couple of ideas stage companies also but we get in there and we’re like, “okay, how do we get you onto a journey where you will be able to get the product market fit? What ICP do you have to chase? And how can we have the POCs? What are the wins of the POCs that we can take?” Then we put it out there and call start going out in the larger market spectrum and things like that.
VN: How do you determine that there's a market for this company, especially being so early on? You're taking a bet that when they exit, it's going to be a 10-year journey, so in 2033 how do you determine that there's going to be a market for this product? What's the due diligence there to vet that?
SS: One thing is that we are all still operators, so all of us understand what's happening in the market at a fundamental level. We are not taking a bird's eye view or relying on an analyst report or something in terms of how we predict how markets will turn and things like that. The founders, when they come to us, and they talk about the problem that they're trying to solve, there are two things we look for. One is, where is that vision heading them? Is it like, “oh, we are trying to make a new age Uber?” where it’s more of improving existing systems in a way where you will reach a critical mass in the next two to three years? Or is there a foreseeable application and adoption that will become widespread as the company grows?
We rely on what we know, and we rely on a fantastic advisory board that we have; that is one of the Carya differentiators for us. We have a growth advisory board who are all stalwarts, who have been there, who have done that, and written multiple inflection points in exactly the same thesis areas as we have. On the VC side We have Gokul Rajaram, who is like the man with the Midas touch; he is the man who architected Facebook's billion dollar IPO, sits on board of DoorDash. Think of any futuristic unicorn, this man's already cut the check, he was coming early. There’s also Ram Gupta who has pioneered and championed companies who do the entire B2BC route, he’s the chairman of board of directors at Postman and Aryaka and multiple deep tech companies.
On the other side, we have people like Jim Hermann and Wendy Sturgis, who have both taken multiple companies to IPO, they’re PEs, they influence the entire industry in a myriad of ways where they understand how tech adoptions work for enterprises as such. What tech has to be seeded and when for what enterprises to move forward with it. Then we have other people like Jithendra Vepa, who is a speech scientist who has patented multiple ML models probably patented like 10 or 15 years ago that are being used now in structuring data science and machine learning data sets, the way they have to be built. There are others like Becky Ploeger who runs an entire influencer industry around how tech adoption works in support systems in contact center tech and things like that.
So, we work with them very closely, we understand where they are going, we understand when we present our portfolio companies, when we present the new companies that are coming into the portfolio, we work with them to see what is the pattern and path to success that we can carve out for these founders, and what changes they would have to make to recalibrate to be on top of the inflection curve. We rely on, of course, the founder, the vision, our understanding of the fundamentals of the market, and on what our advisory board brings to us every time we sit and sync and get more thoughts from them. We connect the dots: our LP network is pretty strong, all of our LPs are founders themselves or are CXOs and industry heads in that particular industry, so we gather and assimilate as much knowledge as possible for us to make sure that we are doing the right thing.
VN: What's the vetting process for the founders themselves? What are you actually looking for from them in terms of experience? Obviously they would have to have experience in the field but also there are the intangibles of that person. What type of person are you looking for when you sit across from them and meet them?
SS: We have young founders in their early 20s, or barely 20s, and we have founders who are pretty mature and have the life stories to share which are going to be so invaluable. One thing we look for is, of course, the undying passion for their vision for what they're building. If somebody's going to come in and say they're trying to build a robot which is going to do ABCD things, and it might have an application here and they construct those journeys for us, we know what these people are, we understand where they're coming from. The passion comes through in the vision they have. But the second point, which is something that we have also realized ourselves is, how self aware are these founders? Do they have complete awareness of how the market may change? Do they acknowledge that things might change? And how can they adapt to that change? Also, how do they react to criticism? How approachable are they?
Self-awareness is primordial; if, as a founder and as a human being, you are aware of who you are, and your idea and your tech and your company, nothing stops you. You can plan better, you can execute better, you can adapt better. So, for me, that is the number one criteria for looking at a founder.
VN: You have to be able to roll with the punches, basically. There are going to be setbacks and you have to be able to deal with that.
SS: Yeah, and sometimes it comes through even when diligence is happening. They get very defensive. No offense and no shade to any founder, because everybody is very defensive about what they're building, I'm defensive about my company, you’re defensive about the work you do, but when we come with a neutral lens and we ask them a few questions about competition or scenarios, the way they start handling those objections in their minds comes through. Maybe they're too good for us to get involved with, let's put it that way. So, we wish them luck, we’ll still help them in whichever way they want us in case they want some connections or they want things like that, but we do not then get into those situations.
VN: Let's talk a little bit about the market as it is currently. Everything has started going down a little bit in the last year or so after the major highs of 2021, so where do you see the market now compared to about a year ago or two years ago? And what does that mean for the companies that raised money during that high? When valuations have come down, what does that mean for them?
SS: Oh my god, you hit the nail on the head. We debated, why do we have to start this fund and invest now? If you just go back in history, the first major recession of sorts that happened when I was alive in the 2008 to 2010 timeframe is when the largest unicorns that we know came about, like Airbnb, Slack, and Square. It was collaboration software, it was a big data explosion, and we believe that this is one of those scenarios again. Some of the best founders, repeat founders, would like to start up when environments are not ideal, because necessity is the mother of invention, in a very weird way, and I believe when times are bad people become more futuristic and start working towards that.
Number two is, of course, the valuations are much lower. Probably three years ago, I could say, “I have an idea, why don't you give me $1 billion dollars and I’ll tell you what it is.” If I had the right pedigree and the right connections, I would probably be able to pull it off, like with crypto where everybody had a coin, everybody wanted to become rich overnight and do the right kind of trading and things like that. But this economy forces you to value companies optimally. It just means that you have greater focus on fundamentals, it means you are looking at better performing companies, you cannot ignore things like, “hey, get the traction, we'll worry about the profits late,” or, “let's look at a promise of revenue and raise more cash.” No, your fundamentals have to be really strong and you have healthier financials, your burn ratio needs to improve a lot.
So, in that way, it is a great time for us to invest and we have a higher quality of deal flow, that's the third outcome you have. Founders who want to start up now are really serious about what they want to do. It's no longer like, “I didn't like my offer letter so let me think of a startup,” you know, that kind of a situation. I wouldn’t like to call it noise but people who want to get their hands dirty right now are probably the most serious founders, who really want to disrupt, who really are so passionate about what they're doing, which is why this is a great time for us to invest.
Now, in regards to those companies which raised money at crazy valuations, I feel for everybody, all the stakeholders involved, from the VC to the founder to the employees, because you have to recalibrate and it's a very forced function, which will take some time for you to justify what you thought you were, at some point in time. There's a lot of journey to be done without any additional support; in fact, we know of businesses that almost folded or are pivoting completely, despite having certain capital in the bank, because they know that fundamentals won't work with the businesses that they were trying to build. So, for us, these three are pretty crucial, and which is why we started Carya at this time.
VN: Do you see those companies taking down rounds now? Is that starting to happen? Or is that something you think will happen?
SS: It has happened in certain situations, I believe. Down rounds are crucial; nobody's happy about it but there's already so much money that's been put in, so you might as well give an extension on the lines so that, through tech, through innovation, or through revenue can start coming out of it sooner. It's always happened, but this is the first time you're seeing it up close.
VN: You mentioned some of your differentiation before, but I'd love to hear how you differentiate your firm to LPs. There's so many early stage funds that are coming out, they have to deploy their capital to somebody and there's a lot of options for them. So, what's your pitch when you meet with your LPs?
SS: So far what's happened is a lot of LPs come to us so we've not gone pitching; knock on wood, I don't know how that's happened. We'll get there soon because our next one, we are pretty ambitious about it. Thankfully, the LPs that we go and approach are people who read and understand the market. Them being founders themselves, or running companies where they talk to a myriad of founders, or they understand the industry well, they do know what happens when VCs of different categories jump from that category.
What I mean by that is, if you have a Series C seasoned investor who's known for growth stage or late stage investments, if they try and come in at an early stage, it's not a healthy marriage between the company and VC; investors are a little impatient, founders are under a lot of stress because it's no longer about, “hey, let's throw a little higher valuation and push out the meaningful VCs out there who could probably do stage appropriate help,” so it ends up being not a healthy relationship when the VC starts sitting on the table and the company starts to grow and there's a lot of things that go wrong.
So, when we go to our LPs, we say, “Hey, here's what we do, there is a reason we are in the pre-seed stage, there is a reason we are only raising X amount of money, and this is how we wish to deploy. We go with founders that we can coach, who like the leg up network that we come with, and who appreciate us helping them put together the next round. We will pick companies where we know and we are very sure that we will be able to get them that next round of funding, we will be able to construct their futuristic rounds, as such. We look at companies which have thorough tech moats, and we are very fairly confident of building business moats and revenue moats for them, where it gives them that advantage against their competitors or incumbents in that particular field. Plus, we have an advisory board, which would help us weather a certain type of threat and risk, before we can even perceive that.”
So, when we go to our LPs, we tell them that this is what's happening, these are the portfolios, and we go with our track records also. That helps them open up. If you know how AngelList structuring works, it works on quarterly capital calls, so a few LPs came and said, “we want to test it out for a bit, we want to see what traction you build, and then we would want to reinvest later, or we want to bump it up later,” and that's worked for us. So, both the founders in our portfolio, and our GAB members, have helped us evangelize and bring us a larger LP pool. So, if they can come back and increase their investments, and if they bring in more referrals, we think it's a big win, and that has happened for us. We share deal flows with them on a regular basis, especially in situations where we think the company wants to raise quickly and there is an extended round, we open it up for SPVs and LPs love that because these are not dry powder LPs, but they are people who understand the industry and they'd like to sit there and even give us recommendations or say, “I can I can take a look at what they're doing and see if I can get them into ABCD places or get them these kinds of introductions.” We love it. So, it's very collaborative and it's worked for us.
VN: You'd mentioned a couple of companies earlier that you invested in, so if you want to talk about those, or you want to talk about other ones, it'd be great to hear about two or three companies that you invested in and what it was about those companies that made you want to put money into them.
SS: A couple of them where the founders were stellar, their backgrounds were stellar, they had either the experience, the pedigree, or whatever that is. When we run diligence calls, even before we take a call with a founder, we try to see a few degrees of separation from the founder and if there's anybody in our network that we trust who knows who the founder is, and what they are doing. Because our investment sizes are small, our fund is small, we cannot spray and pray, so we'd like to get that check out of the way. We ask for the deck beforehand; we'd like to understand the industry where their first application is, or their first GTM that they're planning into. We try to talk to relevant people in those industries in our pool of LPs or GAB, and get some insights, so when we go to the call, we are prepared. We ask the founder not “introduce yourself” kind of questions but it's more of, “what do you think of ABCD stuff?” We'd like to see how they react to it.
More often than not, every single portfolio company today, every single founder loved that first conversation, because it was so different from what they probably had with other VCs or angel investors that they were looking for. It was almost an exchange of ideas because you have to realize that half of our portfolio companies did not have revenue when they started with us, their products were still in a very nascent stage, or probably products didn't exist. Then we go ahead and present what we can do, how our network works, how we like to help them, and see if that's okay by them. Sometimes we're like, “hey, you know what you’re doing, let us please get onto your CAP table,” and most of the other times, it's like, “Can we do this for you? This is how we would like to help you.” Then it's about, “Yeah, let's walk the bridge and close the deal and get on with it,” kind of a situation.
VN: You were an operator, you were a founder, and then you got into venture. So, talk about that transition to taking on that new role in that new environment. What are some of the things that you've learned since making that transition?
SS: I never thought I'd be an investor, to be honest. I probably got into startups 15 or 16 years ago when I was in India when there was a transition being made from services companies to product companies. The first big unicorn in India, Flipkart, which is like the Amazon of India, was just starting to sell books.
I got into a startup where I was their first non-tech hire and I had my master's in intellectual property rights and law, so I would try and congregate a pool of startups that might need some bit of help in either filing a patent application, and that kind of stuff. It always used to give me great pleasure when founders would reach out and say, “Hey, would you know somebody we can hire for this function?” or, “Would you know how we can crack this? Hey, can you take a look at the GTM?” We were working with SaaS, and mid-market SaaS and freemium SaaS was a new thing when I got into it. So, the amount of cross-pollination of ideas that would happen, I would happily take it to multiple groups of these cohorts that we would have and evangelize. So, I knew in my head that I would not stop being a connector ever and I would always continue to play any advisory role that I would get so long as I'm learning in the melee, and I'm able to contribute.
When we moved to the US and I started consulting for PacketZoom, which was later acquired by Roblox, or I was consulting with a couple of companies in Southeast Asia, somebody came to me and said, “Hey, why are you just looking at these things? Why don't you take some sweat equity or submit an advisory stake, or why don't you get the skin in the game?” which is when I started cutting small checks myself. So, it was fine then because I would only cut a check after I'd thoroughly understood the founder, I had done something for them, and I was very, very sure of my money not going into the wrong hands. Somebody else's money is a different beast altogether, that expectation is a different beast altogether, but when we came together, we knew the work that was cut out for us because of our investing and understanding what it takes to work your own investment up, that is how involved you will have to be in terms of making sure that you do your part in in propelling the founder in the right direction, either from a business perspective, or connecting the dots perspective, we just took it and started extending it to other people.
I ended up taking programs at Columbia to help us set stuff up, or at least understand how things work in an ideal situation out there in the world. We have had interns, we have had folks who have interned at multiple other VC firms who came in also, but the only difference that I can possibly think of from me being an angel investor myself to going into a VC journey was the scale at which we would have to operate, the amount of pitches that we would have to go through in establishing that. I would always wonder why you have to listen to 100 pitches if you have to invest in one company. So, that was something that we started to enjoy and appreciate in a larger sense. What we do is we make a note of every single country that's crossed paths with us, whether we have invested with them or not and we also go back and visit them; if we see that there is an opportunity of cross-pollination or of connecting, and if there is something else of interest for that particular founder, we'd like to do that. So, that's the change that we've had to adapt to, where it's no longer listening to two pitches and participating in both, it's about listening to 100 and then figuring out where you want to put your skin. So, that's the big change that we've had as an early stage firm. If you'd ask my other partners, they may or may not feel the same way, because they're all in their various different spheres of journey where this might be a second thing to them, but this is personally where I thought there was a big transition for me.
VN: What's the part of the job that really appeals to you? When you go to work every day as a VC, what do you really love about this? What really motivates you?
SS: Just the fact that I have an opportunity to participate in propelling or in pushing an idea that can actually change the world in its own way. I'm not the smartest coder on Earth, and I'm not the person who can build such technologies myself, and I look at every single pitch like the first time I probably opened a very colorful encyclopedia. It is magical to me, because you don't know what person can come up with what idea and how you could add and catalyze it in the right way. So, for me, I'm constantly on a journey of learning and understanding. I copiously take notes and if there are words used, if there are technologies being spoken about, there are applications where I could not think those technologies could be a part of, I go and voraciously consume all the knowledge that I can possibly get my hands on. So, it's a great learning opportunity and that's how I would like to treat it. Because, out of that itself, we will be able to assimilate it and help in whatever meaningful ways we can.
VN: Is there anything else that you want me to know about you about the firm? Anything else you wanted to get across when people read this?
SS: When Carya started, we didn’t want to be a dry powder VC, we did not want to be a VC who just gets they're check into the next deal, which is going to bring you a million dollars, convert your million into a billion kind of a situation. We wanted to be a part of those founders’ early journeys and add meaningful value in those journeys.
It was for selfish reasons also, because if you get involved it’s when you are able to control certain desired outcomes in a certain way and you're making sure that the founder is not getting lost. We get involved as much as our founders want us to but the fact that you’re going back and almost becoming an ancillary founder for every single portfolio company of yours, where you're doing that journey mapping of where you're going, that excites us a lot. And not just that: we share the journey with every single stakeholder involved. You're an LP, you're a GAB member, you're a portfolio company, you get a ringside view of what's happening and you get to participate.
We open up a contribution pool for our entire set of stakeholders, which is why, 19 investments down, almost three of them in Series A and a couple of them would have closed but for what just happened at SVB, we are seeing those returns kick in in the right way. And we are very happy about the fact that many growth stage ventures now look at us as their scouts. They want us to bring a deal to them, no questions asked, they want to get on. Of course, they will do their due diligence, but they will not reject the deal that comes from us. We like the fact that people place that confidence on us and we would want to continue that.
We're very grateful because we have a GAB: these people are not small. Steven Chambers, Ram Gupta, Jim Hermann, Gokul Rajaram, these are not people who would sit on an early stage venture capital firm’s advisory board and give us those hours and interact with each and every founder we have except they like what Carya is doing and they believe that the way we are trying to make a meaningful impact, when companies' foundations are getting established, is the right way to go about for a VC who wants to get involved in an early stage journey of a company. We are very grateful for that.
How we measure our success is, will our LPs come back and invest more and bring their friends with us? Will our GAB members not just work with ICP, mentoring our portfolio companies and us, but will they want to invest? Will they want to propel things in the right way for our different ideas for Fund II? Then our own companies: we have our own company founders who came back after their exit saying they want to invest in Carya as an LP. That's a great testimony for us and brings in more references. All this is happening and we will want to keep this up. We are a collaborative VC firm.
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