20VC: Index's Shardul Shah on Why Market Size is a Trap | Biggest Lessons on Pricing from Leading Rounds in Wiz & Datadog | Why Benchmarks & Averages in VC are BS | How Index Makes Decisions and Why Growth & Early are the Same Investing Style

The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch

The Twenty Minute VC

Finance, Venturecapital, Tech News, News, Siliconvalley, Technology, Investing, Startups, Business

4.4 • 637 Ratings

🗓️ 16 September 2024

⏱️ 51 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

Shardul Shah is a Partner at Index Ventures and one of the greatest cyber security investors of the last two decades. Among his many wins, Shardul has led rounds in Datadog, Wiz, Duo Security, Coalition and more. Shardul is also the only Partner investing at Index to have worked in every single Index office from London, to SF, to NYC to Geneva. Prior to Index, Shardul worked with Summit Partners, focusing on healthcare and internet technologies.

In Today's Episode with Shardul Shah We Discuss:

1. Investing Lessons from Wiz and Datadog:

Why does Shardul believe that TAM (total addressable market) is BS?
Why does Shardul believe that every great deal will be expensive?
How does Shardul evaluate when to double down and concentrate capital vs when to let someone else come in and lead a round in an existing company?
How does Shardul think about when is the right time to sell a position in a company?

2. How the Best VCs Make Decisions:

How does Shardul and Index create an environment of truth-seeking together, that is optimised for the best decision-making to take place?
What are the biggest mistakes in how VCs make decisions today?
Why does Shardul believe that all first meetings should be 30 mins not 60 mins?
Why does Shardul believe it is so much harder to make investment decisions when partnerships are remote? What is better remote?

3. The Core Pillars of Venture: Sourcing, Selecting, Securing and Servicing:

Which one does Shardul believe he is best at? What is he worst at?
Does Shardul believe with the downturn we have moved into a world of selection and not just winning every new deal?
Does Shardul believe that VCs provide any value? What are the biggest misnomers when it comes to "VC value add"?

4. Lessons from the Best Investors in the World:

Who is the best board member that Shardul sits on a board with?
What has Shardul learned from Gili Raanan and Doug Leone on being a good board member?
What have been some of Shardul's biggest investing lessons from Danny Rimer?
Why does Shardul hate benchmarks when it comes to investing?

Transcript

Click on a timestamp to play from that location

0:00.0	The lessons to learn are don't be queued on price, don't underestimate fantastic founders, and don't
0:06.5	overthink it. Tam is a trap. Go back and look at the S-1s of some of the biggest public companies
0:12.0	today. Their market caps are bigger than what they thought the Tam would be. The best founders find
0:17.5	and expand market opportunities. We are in the business of finding fund
0:22.6	returners. The power law dominates our business. Not being in a 10, 20, 50, 100 billion
0:30.1	company is actually painful. This is 20 VC with me, Harry Stebbings, and I'm so excited to
0:35.4	welcome today, one of the best investors of the last 20 years.
0:39.2	Few VCs have not one, but two $20 billion plus companies to their name.
0:45.4	Shardall Shah, partner at Index Ventures, and one of the best cyber investors in the business.
0:50.8	Shardal has led rounds in Datadog, Whiz, Coalition, Duo Security and many more
0:57.2	incredible names. This is an incredible discussion on investing lessons from the last 16 years
1:03.2	at Index. But before we dive in, when a promising startup files for an IPO or a venture
1:08.4	capital firm loses its marquee partner, being the first to know,
1:12.0	gives you an advantage and time to plan your strategic response.
1:16.0	Chances are the information reported it first.
1:18.8	The information is the trusted source for that important first look at actionable news
1:23.2	across technology and finance, driving decisions with breaking stories, proprietary data tools,
1:28.5	and a spotlight on industry trends.
1:30.8	With a subscription, you will join an elite community that includes leaders from the top VC firms,
1:35.8	CEOs from Fortune 500 companies, and esteemed banking and investment professionals.
1:40.6	In addition to must-read journalism in your inbox every day,
1:43.7	you'll engage with fellow
	...

Please login to see the full transcript.

Previous episode | Next episode

Disclaimer: The podcast and artwork embedded on this page are from The Twenty Minute VC, and are the property of its owner and not affiliated with or endorsed by Tapesearch.

Generated transcripts are the property of The Twenty Minute VC and are distributed freely under the Fair Use doctrine. Transcripts generated by Tapesearch are not guaranteed to be accurate.