Over the last decade, I have learned from the thousands of entrepreneurs I have interacted with as a VC. I have also learned from my VC colleagues within the industry. But the biggest vehicle for my learning and growth has been meditation. I have been a committed practitioner of meditation over the past decade. This has helped me look at the VC process more objectively and question many things we do. I formed my own hypothesis on how early-stage VC firms can truly add value to the founders, and it inspired me to start Emergent Ventures.
Here is the resulting draft manifesto of Emergent Ventures:
#1 We focus on “Inner Management” for entrepreneurs
In my experience as a venture investor and entrepreneur, I realized that the most important driver for success is the entrepreneur’s ability for inner management. By Inner Management, I mean the ability to manage their mind, body, emotions and energy. Inner Management provides the foundation on which other important entrepreneurial capabilities are built.
Once a strong foundation is laid, the entrepreneur significantly enhances his or her ability to sustain the necessary focus and drive, have clarity of thought and action, attract and retain talent, establish trust with customers and investors, develop versatility across roles, and continually evolve themselves. For example, let’s consider clarity of thought and action. Typically, a person’s thoughts and decisions are colored by the impressions they have gathered in their life. They are rooted in countless assumptions, unfounded conclusions, and biases. A startup’s journey is all about validating and invalidating a series of assumptions and hypothesis. To achieve success, it is critical that the entrepreneur is able to consciously create a little distance from her own thoughts and see the distortions in them. This is inner management. Another example is managing your energy. As an entrepreneur, you need a lot of sustained energy. The process of building a company is intense, but it has to be joyful, not something that burns you out. It is possible to consciously create that state within you. At Emergent, this inner management capability is something we pay a lot of attention to, before investing in a company, and we also collaborate with entrepreneurs to enhance it.
#2 We make very early bets
Our investments are very founder centric. We are comfortable with making very early investments, even when the startup idea is not quite clear. Many people often refer to these as “pre-seed” investments. We have a lot of experience working with entrepreneurs at this stage. We work with them to create fresh bottom-up hypotheses and help flesh out the idea. We jointly identify early customers and help establish the process to iterate and take the product to market.
#3 Success for us is achieving product-market fit
Success means different things at different stages of evolution for a startup. Given that our focus is on the seed stage, a key success metric for us is about helping our companies achieve product-market fit. Once the startups have a clear and unique value proposition that is resonating with customers, they are ready to translate that into rapid growth through a consistent and repeatable sales process. At this point, we would help our companies bring in the right talent to build that sales machine. We also help them raise their next round of capital to fuel that growth.
#4 We believe in capital-efficiency
Most startups think they are capital efficient. But not by our standards. I have seen that many early stage startups can achieve their milestones with significantly less capital if they do a few things differently. We collaborate with our startups on identifying the right focus area, resource planning, and roadmap that will help them move fast while being very capital efficient. Many of our companies have achieved $1M+ in sales with under $500K in capital. We give a lot of importance to the company’s path to profitability.
#5 We take a community-driven approach to helping our portfolio companies
At Emergent Ventures, we have a community driven approach to helping companies. Many of our investors are also VCs, entrepreneurs and operational leaders in startups and this allows our community to collaborate, and learn from each other.
#6 We invest across borders
In the early part of my VC career, I used to be a part of Blumberg Capital. They have successfully partnered with many Israeli startups over the past two decades and helped them more effectively target the US market. Later, I was at Nexus Ventures where we did that for Indian startups. Compared to Israel, India’s tech startup ecosystem is at an earlier stage of evolution. India too has significant potential to build global tech companies, but more needs to done to achieve that potential.
Though most of our startups are based in Silicon Valley, we also invest in enterprise tech startups from India where the primary market is the US. We also help them establish a base in Silicon Valley.
Talk to us. Perhaps we can collaborate together to build something worthwhile.
Ankur! Wow, last night’s talk at WeWork hit the spot. I was the guy standing up in the back center. I’m James. Nice to meet you. I loved your commentary on life being “settled” and the riding a horse to the moon analogy. The yogic approach/inner management resonates like a bell. I’d love to get coffee -James