20VC: Portfolio Construction, Optimising SPVs, Opportunity Investing "Between Rounds", Being Distribution-Centric Over Product-Centric and Capital Concentration Within Funds With Sumeet Gajri, Chief Strategy Officer @ Carta

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

🗓️ 17 January 2020

⏱️ 57 minutes

🔗️ Recording | iTunes | RSS

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Summary

Sumeet Gajri is the Chief Strategy Officer @ Carta, the startup that helps companies and investors manage their cap tables, valuations, investments, and equity plans. Sumeet is largely responsible for all things fundraising and M&A and Carta have raised over $485m from a16z, USV, Thrive, Spark, K9, Lightspeed and Meritech to name a few. Sumeet is also Managing Partner @ Original Capital, where he has partnered with companies including Front, Tonal, Instabase, Everlywell and Cockroach Labs to name a few. Finally, Sumeet is also an LP in world-leading firms such as USV and Valar Ventures.

In Today’s Episode You Will Learn:

1.) How Sumeet made his first foray into the world of venture in NYC having grown up in Scotland? How that led to his move to operations with Carta? How his learnings from Carta led to his establishing Original Capital?

2.) How is Original Capital different from every other micro-fund? How does Sumeet approach portfolio construction with the fund? What is the optimal number in a portfolio? How does Sumeet think about loss ratio? What 3 criteria dos every new investment have to pass to make it into the portfolio? How does check size vary by deal?

3.) How does Sumeet invest in some of the best companies in between "official rounds"? What does this conversation look like with the founders? How does Sumeet analyse reserve allocations? What makes the right strategy? What are his capital concentration limits per company? How does Sumeet think about using SPVs effectively?

4.) Sumeet helps his companies fundraise a lot, what does the first step look like? How does he advise on investor selection? How does he advise on pipeline management? Should founders speak to investors when they are not raising? How open should they be in these meetings? What can founders do to catalyse the process? Where does Sumeet see many founders make mistakes?

5.) How does Sumeet think about distribution vs product? What can founders do to adopt a more distribution first mindset? What have been some of Sumeet's biggest lessons in turning Carta from a single product company to a multi-product company? Do companies have to own their own lines of distribution today?

Items Mentioned In Today’s Show:

Sumeet’s Fave Book: Howard Marks: The Value of Predictions

As always you can follow Harry, The Twenty Minute VC and Sumeet on Twitter here!

Likewise, you can follow Harry on Instagram here for mojito madness and all things 20VC.

Transcript

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0:00.0	Welcome back to the 20 minute VC with me, Harry Stebbings, and my word, I'm so excited for the show today.
0:04.6	Why?
0:05.1	Well, because our guest just has so many different perspectives, owing to the fact that he wears essentially every hat in the value chain,
0:11.1	operator, investor, and LP.
0:13.3	A truly unique guest, and so with that, I'm thrilled to welcome Sumit Gavri, Chief Strategy Officer Carter,
0:18.5	the startup that helps companies and investors manage their cap tables,
0:22.4	valuations, investments and equity plans. Sumit is largely responsible for all things
0:26.8	fundraising and MNA, among other things, and Carter has raised over $485 million from the likes of
0:32.7	Andrescent, USV, Thrive, Spark, K9, Lightspeed and Meritech, just to name a few.
0:38.8	Sumit is also a managing partner at Original Capital, where he's partnered with companies
0:42.7	including Front, Tonal, Instabase, Everly Well and Cockroach Labs, again to name a few.
0:48.2	And finally, Summeet is also an LP in world-leading firms such as USV and Valar Ventures.
0:53.3	Now, this episode really was a team effort,
0:55.0	I have to admit. So a huge thanks do go to David and Andreessen, Manu at K9, Arjun at Tri, Brian at Thrive,
1:01.0	Henry at Carter and Paul at Front for some fantastic questions suggestions today. I think we need
1:05.6	a group mehitos to thank you for that. But before we move into the show today, this episode is
1:10.1	brought you by Silicon Valley Bank.
1:11.9	For over 35 years, Silicon Valley Bank has been the bank for visionaries of all kinds,
1:16.3	people and businesses who've revolutionized everything from software to social media,
1:20.7	from workspaces to wine.
1:22.3	With nimble banking services and solutions, Silicon Valley Bank helps startups adapt to the changing needs of a growing
1:28.0	company. Learn more at SVB.com backslash next. That's Silicon Valley Bank, Ideas Bank here. Let's face it,
	...

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