Transcript follows & video below
I understand you act as a consultant to investment firms. Could you tell me in what areas of industry is your expertise ?
Sure well over the course of the last 5 years I’ve become a generalist in the very true sense of the word. I started off my career as a technology generalist so hardware, software, clean tech, Web2.0. But since I’ve been working with emerging markets & particularly in India where every sector is in hyper growth mode, I’ve become a generalist in healthcare, education, financial services, agriculture. My clients which range mostly from capital providers but also some social entrepreneurs span all of those industries. I’ve done both early stage & growth investing so they actually span different stages as well.
Dimple Sahni
Well you’ve had a lot of experience in different areas, that’s fantastic. A bit of everything, yes? What do you look for in women entrepreneurs & startups that indicate interest to you in investing in their businesses?
For me, I’m going to talk about personality & character traits first & then I’ll talk about some business model archetypes that I think are pretty good signs of success. In terms of personality & character, I look for people who are very transparent, very ethical, highly passionate, are very forward looking (not just short term oriented but are long term oriented). And they’ve thought about a path to profitability which is reasonable & is not just showing the typical hockey stick which a lot of entrepreneurs want to show & a lot of vcs want to see. I also like to see how they plan to surround themselves with the right type of team because a lot of founders have founderitis & they’re consumed with the business & only see themselves in leadership role. But not every leader has to lead from that position. So I look to see how they’ve thought about the organizational structure as well & how they’ve thought about the operations of the firm. But someone that’s really prepared & very crisp & very articulate. I allow for things like local languages,ESL, different MBTI personality types. I try & factor all of that in. I think there are some standards that I don’t want to compromise on & preparation is one of them, ethics & transparency & just general forward looking nature. Those are the traits that I won’t compromise on. And business model archetypes, I look for people who are not necessarily doing incremental changes but are really doing more revolutionary changes.
Dimple Sahni
So more disruptive?
Definitely more disruptive. I think a lot of people say that they want to invest in that but when an incremental technology comes around & it’s incremental to a Google or a Skype or something else that has hit big, they’re likely to invest in it.
Dimple Sahni
Safer?
Yes much safer. As I mentioned, I have a high appetite for risk so I look for the more disruptive organizations & technologies. And also the business models that are sometimes grounded in services because again in emerging markets, technologies are a means to an end. Technologies in & of themselves don’t have the IP laws, the legal system & structure is simply not there to be able to build these types of technologies. Whereas web technologies work well here, it’s mobile technologies that work well in India & Africa. You have to really translate what technology means & in many of those countries as I mentioned, services are really the revenue generating business models. In my mind if you’re targeting those economies, coupling a product with a service, catering to the rising bottom of the pyramid, I love business models that speak to that. Because if you’re only focusing on the top 10% of the population, which can afford your product or service, you may get the short term gains now, but again you don’t have a long term view as to where the real wealth of the economy is going to come from.
Dimple Sahni
Yeah, growth wouldn’t be there, would it?
No, no. I look for people who have not thought about hyper growth but are really realistic about the milestones that they’re going to have. So business models that again incorporate buffers & missteps because it inevitably will happen. I think most people usually paint a very rosy, best case scenario. I like to look at business models which even at a base case are going to do reasonably well.
Dimple Sahni
And where do you see women in this? Have you seen many women pitching & do you find that they are able to deliver these requirements that you have? How do you see that compared to male startups?
Yeah. I don’t see that many women unfortunately. I’d like to encourage more & lately I’ve been mentoring a lot of women who are coming out of business school & engineering schools who either have an interest on creating a company or financing & getting into venture capital. So I think that trend might be changing.
Dimple Sahni
We need more mentors, that’s great that you are doing that.
Yes, yes. In terms of preparation I feel like that the women are very well prepared. It’s their delivery which is what set’s them back. They’re not confident in speaking. They’re aren’t looking to play on their strengths or talk about their successes. They’re quite humble in their approach. While I don’t need to see the hockey stick, I do want to hear about why I should invest in you & your past successes may be a good indication of that. Men I meet are oozing with confidence but they often lack preparation. They like to shoot from the hip & when I ask detailed questions, they stick to their bigger picture answers. Now I’ve seen enough business plans & heard enough pitches & I kind of know when someone, man or woman knows what he is talking about. Those are the major differences I see & it’s just a question of volume as well. I see 95% of business plans from men, 5% from women.
Dimple Sahni
Mark Suster said that it’s a number’s game with women really. We just don’t have the numbers.
Yeah & again I think it’s changing.
Dimple Sahni
Very encouraging, thank you. Advice for pitching for venture is often correlated with dating. What sort of chemistry makes for a good match & is a success for both entrepreneur & venture capitalist?
Yes well the analogy you make with dating, is actually highly, highly accurate. Let me talk about it at a macro level & then I’ll talk about it at a micro level too. Venture capitalists, by the nature of the market & the nature of the capital they have, they’re more interested in deals which are harder to get, which attract the interest of other capital providers. There’s a running joke that vcs often say well we might be interested, but who else is interested because then I could be more interested? I liken that very similar to dating. When other people show interest in you, your market value goes up.
Dimple Sahni
You’re hot?
Yes absolutely. Anyway so creating that scarcity value really, really helps versus if you shop your business plan around to everyone. Or in the dating analogy, if you hit on every thing, no ones gonna want to date you because your stock value has gone down. At a macro level, generally that’s how the dynamics work. At a micro level, when you’re sitting across the table & it’s a vc/entrepreneur relationship, I think someone who challenges you & someone who can give you really good constructive feedback. Conversely the person that’s receiving that feedback or challenging them back. I mean to me being in a relationship is all about being a better person & challenging a partner to do so as well & not making it so personal because you’re both trying to achieve a higher good. That type of chemistry, I think is really, really healthy. Then I think leaving a little bit on the table, so you leave some room for a follow up meeting. As an entrepreneur, I would say, give me enough so that you entice me but don’t tell me everything. Let me think that there’s more I have to discover, whether it’s upside potential or new channels I didn’t think about. But also let me feel comfortable that there’s ways we can work together & collaborate. So that the next phase of the business is a collaborative effort, it’s just not you being singular about what you want to do.
Dimple Sahni
So this is a really interesting piece. It’s almost like a seduction, that you’re actually consciously keeping something back possibly, to entice the VC to want to explore further.
Absolutely.
Dimple Sahni
That is a really interesting piece, thank you so much.
Sure.
Dimple Sahni
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