Guardian angels: VCs now fund founders’ bets in other startups

The trio are top executives Matrix Partners India, one of the largest VC firms in the country. First Cheque, which runs through AngelList Syndicate …
Top venture capital firms and investors are, through various programmes, bankrolling Indian startup founders’ and senior executives’ angel investments in other promising businesses. It’s a strategy by VCs to gain an early, though indirect, association with upstarts in the Indian ecosystem, which is witnessing a new financing boom.

Sequoia Capital is diving deeper into the early-stage market by introducing its ‘Scout’ programme in India. The initiative encourages founders, both from and outside of its portfolio firms, to identify interesting entrepreneurs or young companies they would like to back through an angel investment. Sequoia picks up the tab, but it doesn’t push its name in the deal, three people familiar with the development told STOI. The ‘scout’, or founder, who identifies a startup, remains formally associated with the investment.

Sequoia launched the ‘Scout’ programme in the US over a decade ago. It was quietly rolled out in India earlier this year. The first batch comprises seven to eight founders who will invest in other firms. Naveen Tewari, co-founder of mobile advertising network InMobi; Ramakant Sharma, co-founder of online home design startup Livspace; and Naspers Fintech head Amrish Rau are among them.

Seed-stage investment firm India Quotient has helped launch First Cheque, which works with a network of founders and executives whom it calls “venture partners”, chipping in when they make angel investments. These venture partners include Farid Ahsan of vernacular language app Sharechat and Byju’s chief product officer, Ranjit Radhakrishnan.

angel

Besides India Quotient, Chinese venture firm Shunwei Capital and Avnish Bajaj, Vikram Vaidyanathan and Tarun Davda have also come in as investors in First Cheque, said two sources briefed on the matter. The trio are top executives Matrix Partners India, one of the largest VC firms in the country. First Cheque, which runs through AngelList Syndicate platform, has struck 16 deals and plans to hit the 100-mark in three years.

Sequoia confirmed its Scout initiative but declined to comment on angels who are a part of it. First Cheque also refused to divulge the list of its backers.

Angel investors typically participate in the first round of fundraising by startups, offering Rs 50 lakh to Rs 3 crore. The valuation is generally in the range of Rs 5 crore-Rs 15 crore, depending on the size of the round. Scout and First Cheque help startup founders and business executives who have a strong network and good investment judgement but lack adequate capital to financially back promising companies.

Some founders, who make early bets in other firms, see these programmes as a way to better understand the world of venture capital. The programmes help VC firms cast a wider net without having to manage a large number of investments directly, given their limited bandwidth and ability to gather intelligence, according to over half a dozen entrepreneurs, angel investors and VCs STOI spoke to.

Through Scout, Sequoia typically invests about Rs 70 lakh every year with the enlisted founder-angel investor, and shares profits when the deal is successful. Similarly, First Cheque, which is run by former entrepreneur and BITS-Pilani graduate Kushal Bhagia, co-invests Rs 10 lakh to Rs 20 lakh with angel investors in every deal.

The Scout programme comes as Sequoia raises its first seed fund of $150 million to $200 million after launching accelerator programme Surge earlier this year. In the US, it has funded scouts through its seed funds. While many founders and angel investors have worked with Sequoia before, the programme has become more formal with launch of an India-specific seed fund, said a source with the knowledge of the development.

Surge has two batches every year with Sequoia investing over $1 million in 20-25 startups in each batch. But the Scout initiative will help it identify new companies at an even earlier stage, intensifying competition with other venture firms.



Overcoming signalling risk

In the funding boom of 2014-15, many top VCs, like SAIF Partners, Matrix Partners, Sequoia and Chiratae Ventures, made seed investments of less than $1 million each to get into new startups before their valuation became too high. They focused on Series-A rounds, which ranged from $3 million to $5 million.

Seed rounds generally help startups secure capital for developing the product and finding a market fit. Series-A rounds are held to build the business. VC firms, which manage funds of up to $300 million, see it as a low-risk strategy to deploy $8 million to $10 million in seed deals. One downside in this for founders is the “signalling risk”: if existing VC decides not to lead the round, others may think there’s something is wrong with the startup and stay away. Startups’ ability to raise Series-A capital takes a hit.

There is no signalling risk in the arrangement in which VC firms back bets by angel investors. In the case of Scout and First Cheque, the VC firms don’t have the right to lead future funding or demand board seats.

An investment made through the Scout programme does not carry Sequoia brand name. Enlisted angel investors, however, are encouraged to tell firms they are backing that a certain portion of the money has come from Sequoia. The investment decision rests solely with angels.

Network matters

In the first year, a startup has only a handful of employees and it is still building the product and studying the market. During this period, support from an outside network of entrepreneurs with experience in managing a startup is invaluable.

According to First Cheque’s Bhagia, investors are looking for two types of ‘edge’ in making their decisions at that level. “When a company is starting out, there’s not a lot you can judge it on. Angels know the founders as they were batchmates or employees at a firm, which is one edge. The other edge is market understanding. As angels are already running a business, they are closer to users and can see trends before they become mainstream,” Bhagia said.


The network which VCs are trying tap into through these angels can be classified under three ‘Cs’ — colleges, cities, and companies. Connecting with a CXO-level figure at unicorns like Flipkart or Byju’s, or other successful startups, can help VCs get information about departure of executives looking to launch a new venture. VCs can use the insights to decide if they want to back their new ventures.


For instance, Farooq Adam is one of the venture partners at First Cheque. He is the cofounder of online-to-offline startup Fynd, which was acquired by Reliance Industries earlier this year. When former Fynd executive Shakeef Khan co-founded clothing brand Disrupt, Adam and First Cheque came in as early backers.


“By adding other angels, we are able to do deals of Rs 50 lakh to Rs 70 lakh compared to Rs 15 lakh to Rs 20 lakh earlier. And First Cheque also makes investments more structured and helps take care of the paperwork, which can be a hassle,” Adam said.


People outside Sequoia’s portfolio firms are also a part of its network of scouts-angels. “The market has matured. Founders busy building their firms are seen as role models, and new crop of entrepreneurs is approaching them for capital and advice. The former are mentoring the new crop,” said Mohit Bhatnagar, managing director of Sequoia Capital India. He is overseeing the Scout initiative. “That’s why Scout makes sense, as it helps the ecosystem get built out by those who have invaluable experiences to share.”

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Guardian angels: VCs now fund founders’ bets in other startups

Sequoia Capital is diving deeper into the early-stage market by introducing its ‘Scout’ programme in India. The initiative encourages founders, both …
Top venture capital firms and investors are, through various programmes, bankrolling Indian startup founders’ and senior executives’ angel investments in other promising businesses. It’s a strategy by VCs to gain an early, though indirect, association with upstarts in the Indian ecosystem, which is witnessing a new financing boom.

Sequoia Capital is diving deeper into the early-stage market by introducing its ‘Scout’ programme in India. The initiative encourages founders, both from and outside of its portfolio firms, to identify interesting entrepreneurs or young companies they would like to back through an angel investment. Sequoia picks up the tab, but it doesn’t push its name in the deal, three people familiar with the development told STOI. The ‘scout’, or founder, who identifies a startup, remains formally associated with the investment.

Sequoia launched the ‘Scout’ programme in the US over a decade ago. It was quietly rolled out in India earlier this year. The first batch comprises seven to eight founders who will invest in other firms. Naveen Tewari, co-founder of mobile advertising network InMobi; Ramakant Sharma, co-founder of online home design startup Livspace; and Naspers Fintech head Amrish Rau are among them.

Seed-stage investment firm India Quotient has helped launch First Cheque, which works with a network of founders and executives whom it calls “venture partners”, chipping in when they make angel investments. These venture partners include Farid Ahsan of vernacular language app Sharechat and Byju’s chief product officer, Ranjit Radhakrishnan.

angel

Besides India Quotient, Chinese venture firm Shunwei Capital and Avnish Bajaj, Vikram Vaidyanathan and Tarun Davda have also come in as investors in First Cheque, said two sources briefed on the matter. The trio are top executives Matrix Partners India, one of the largest VC firms in the country. First Cheque, which runs through AngelList Syndicate platform, has struck 16 deals and plans to hit the 100-mark in three years.

Sequoia confirmed its Scout initiative but declined to comment on angels who are a part of it. First Cheque also refused to divulge the list of its backers.

Angel investors typically participate in the first round of fundraising by startups, offering Rs 50 lakh to Rs 3 crore. The valuation is generally in the range of Rs 5 crore-Rs 15 crore, depending on the size of the round. Scout and First Cheque help startup founders and business executives who have a strong network and good investment judgement but lack adequate capital to financially back promising companies.

Some founders, who make early bets in other firms, see these programmes as a way to better understand the world of venture capital. The programmes help VC firms cast a wider net without having to manage a large number of investments directly, given their limited bandwidth and ability to gather intelligence, according to over half a dozen entrepreneurs, angel investors and VCs STOI spoke to.

Through Scout, Sequoia typically invests about Rs 70 lakh every year with the enlisted founder-angel investor, and shares profits when the deal is successful. Similarly, First Cheque, which is run by former entrepreneur and BITS-Pilani graduate Kushal Bhagia, co-invests Rs 10 lakh to Rs 20 lakh with angel investors in every deal.

The Scout programme comes as Sequoia raises its first seed fund of $150 million to $200 million after launching accelerator programme Surge earlier this year. In the US, it has funded scouts through its seed funds. While many founders and angel investors have worked with Sequoia before, the programme has become more formal with launch of an India-specific seed fund, said a source with the knowledge of the development.

Surge has two batches every year with Sequoia investing over $1 million in 20-25 startups in each batch. But the Scout initiative will help it identify new companies at an even earlier stage, intensifying competition with other venture firms.



Overcoming signalling risk

In the funding boom of 2014-15, many top VCs, like SAIF Partners, Matrix Partners, Sequoia and Chiratae Ventures, made seed investments of less than $1 million each to get into new startups before their valuation became too high. They focused on Series-A rounds, which ranged from $3 million to $5 million.

Seed rounds generally help startups secure capital for developing the product and finding a market fit. Series-A rounds are held to build the business. VC firms, which manage funds of up to $300 million, see it as a low-risk strategy to deploy $8 million to $10 million in seed deals. One downside in this for founders is the “signalling risk”: if existing VC decides not to lead the round, others may think there’s something is wrong with the startup and stay away. Startups’ ability to raise Series-A capital takes a hit.

There is no signalling risk in the arrangement in which VC firms back bets by angel investors. In the case of Scout and First Cheque, the VC firms don’t have the right to lead future funding or demand board seats.

An investment made through the Scout programme does not carry Sequoia brand name. Enlisted angel investors, however, are encouraged to tell firms they are backing that a certain portion of the money has come from Sequoia. The investment decision rests solely with angels.

Network matters

In the first year, a startup has only a handful of employees and it is still building the product and studying the market. During this period, support from an outside network of entrepreneurs with experience in managing a startup is invaluable.

According to First Cheque’s Bhagia, investors are looking for two types of ‘edge’ in making their decisions at that level. “When a company is starting out, there’s not a lot you can judge it on. Angels know the founders as they were batchmates or employees at a firm, which is one edge. The other edge is market understanding. As angels are already running a business, they are closer to users and can see trends before they become mainstream,” Bhagia said.


The network which VCs are trying tap into through these angels can be classified under three ‘Cs’ — colleges, cities, and companies. Connecting with a CXO-level figure at unicorns like Flipkart or Byju’s, or other successful startups, can help VCs get information about departure of executives looking to launch a new venture. VCs can use the insights to decide if they want to back their new ventures.


For instance, Farooq Adam is one of the venture partners at First Cheque. He is the cofounder of online-to-offline startup Fynd, which was acquired by Reliance Industries earlier this year. When former Fynd executive Shakeef Khan co-founded clothing brand Disrupt, Adam and First Cheque came in as early backers.


“By adding other angels, we are able to do deals of Rs 50 lakh to Rs 70 lakh compared to Rs 15 lakh to Rs 20 lakh earlier. And First Cheque also makes investments more structured and helps take care of the paperwork, which can be a hassle,” Adam said.


People outside Sequoia’s portfolio firms are also a part of its network of scouts-angels. “The market has matured. Founders busy building their firms are seen as role models, and new crop of entrepreneurs is approaching them for capital and advice. The former are mentoring the new crop,” said Mohit Bhatnagar, managing director of Sequoia Capital India. He is overseeing the Scout initiative. “That’s why Scout makes sense, as it helps the ecosystem get built out by those who have invaluable experiences to share.”

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Startup nation: Indian startup founders reveals important new trends

… for the second or third time, it is obvious you are going to be better and faster,” says Rajan Anandan, managing director, Sequoia Capital India.
Even in the fast-paced disruptive world of startups, a few things are hard to change. Gender bias, for one.

Sairee Chahal, founder of Sheroes, a community platform for women, is at times at the receiving end of it. Often it comes in the form of “innocent” remarks and “friendly suggestions”. “You started this alone?” she often gets asked, with thinly veiled scepticism.

Just the other day, an executive from the venture capital industry suggested to her: “You should have a male cofounder. It is easier.” Her sense of dismay over the incident comes through in her voice as she spoke, over the phone, to me. “It felt stupid. I am not a spring chicken. This is my second startup. I have been an entrepreneur half my working life. There is so much resistance to solo female founders,” she says.

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So why did she start alone? I repeat the loaded question not because she’s a woman but because starting up alone is tough and lonely, for men and women. MakeMyrip founder Deep Kalra recently told me that if there is one thing he would change about his entrepreneurial journey, it would be to have a cofounder. Chahal knows well the hardships of a solo founder. But she says she had little option. “I didn’t know where to find them.” A small-town Punjabi girl from a middle-class family, she had few networks in Delhi from her growing-up days. Nor did she form deep bonds during her corporate stint — a challenge that women often face — to scan for a cofounder. “Startups are tough. It is even tougher for women entrepreneurs who have to battle many tides,” she says.

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Chahal confirms what a survey of Indian entrepreneurs by Excubator, a startup incubator and consultancy firm, for ET Magazine, reveals.

India’s startups remain a man’s world. They might be flush with funds and buzzing with bright ideas and disruptive technologies, but traditional gender biases and challenges remain in play here. The online survey was done in August and received valid responses from 299 entrepreneurs. Women comprised just 14% of total respondents.

It is a good time to pause and understand Indian entrepreneurs.

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Once on the fringes, starting up has become mainstream. Entrepreneurs are the new heroes of India’s middle class. After two decades of boom-bust cycles, the ecosystem is both deep and rich, with 1,400 new startups created in 2018, (from a high of 3,560 new startups in 2016, it dipped in 2018, due to the onset of a funding squeeze). The funding landscape too has substantially matured with most global VC firms including those from the East (like China, Japan and Korea) setting up shop in India. In 2018, according to Venture Intelligence, VCs in India invested $8.5 billion in Indian startups.

Also, amid all-round pessimism in the Indian economy, startups and their founders are a beacon of hope. Amid dreary headlines of bankruptcies, credit defaults and incarcerated promoters, new entrepreneurs, their surging ambitions and funding boom offer a much-needed respite.

The survey attempts to understand Indian entrepreneurs, mostly of tech-led startups. Who are they? Where do they come from? What is their gender, demographic and psychographic profile? What drives their pursuits? What are their biggest challenges? “The survey busts a few myths and endorses some visible trends,” says Guhesh Ramanathan, founder, Excubator.

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First, the macro view. Bengaluru is unquestionably India’s startup capital, with 37% of founders who responded to the survey coming from there. NCR is at the second spot — 16%. About 71% of respondents are from Tier-1 cities (Bengaluru, Mumbai and NCR). Like FreeCharge’s Kunal Shah and Myntra’s Mukesh Bansal, who have now started new ventures, 34% of survey respondents are serial entrepreneurs.

Contrary to popular perception, “they aren’t young, fresh college graduates,” says Ramanathan. The median age for starting up is high — 35 years for men and 37 for women. They are well educated, too — 39% have a bachelor’s degree and 53% have a master’s degree/diploma. About 4% have a PhD; the same as school graduates.

Their experience is fairly spread out, from 0 to 30-plus years. About 37% are solo founders but the most popular configuration is two cofounders for a company, at 47%. A vast majority has been set up over the last decade, with almost half in the last five years. About 26% of them have managed to raise funding. Raising funding seems to be their biggest challenge (59%), followed by finding and retaining talent (40%), government and regulatory issues (31%) and finding customers (30%).

Entrepreneurs are also maturing in their mindset. What are the yardsticks these entrepreneurs use to benchmark their success? For about 58% it is generating profit, while for 42% it is the number of people they employe and for 20% it is fund-raising.

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Signalling Indian startups’ rising global ambitions, a high 66% say their focus is both Indian and global markets; 30% are focused only on India while a small but significant 4% are focused only on global markets.

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Mature and more evolved

Seasoned startup watchers echo what the survey reveals. The first thing that Saurabh Srivastava, founder of Indian Angel Network, notices is the maturity of Indian entrepreneurs and their ideas.

“In 2010, we would get 200 startups annually and struggle to find even one or two to invest in. Last year, we vetted 10,000 and invested in 25-odd.

The quality of ideas has improved substantially,” he says. Arun Natarajan, founder, Venture Intelligence, says he sees more experienced — and hence older — entrepreneurs. “With age and experience, they have a better feel of the problems and hence go after business models that are sounder,” he says.

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The biggest thing that serial entrepreneur and investor K Ganesh notices is the surging aspirations and scale of ambitions of today’s entrepreneurs. Sanjay Nath, managing partner, Blume Ventures, too, finds today’s entrepreneurs a lot bolder. “They think global from day one. They are attempting to do things at a much grander scale. Flipkart’s exit and the kind of money people made give confidence to many,” he says. Oyo and its aggressive global expansion plans are now a Harvard case study. They could become bigger than Marriott, he says.

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Successful exits have spawned a growing breed of serial entrepreneurs. “They come with a lot of experience. If you are doing anything for the second or third time, it is obvious you are going to be better and faster,” says Rajan Anandan, managing director, Sequoia Capital India. Just look at the way Kunal Shah’s Cred and Udaan, founded by former Flipkart employees, are scaling up. The latter, founded in 2016, is already a unicorn (valued at more than $1 billion).

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“While the number of new startups is coming down, the quality of founders is going up. We are getting more nuanced and differentiated ideas,” he says. This also has to do with the maturing of the funding ecosystem — in quality, quantity and spread. The biggest manifestation of all this, almost everyone agrees, is that Indian entrepreneurs today are thinking very hard about their ideas and the problems they are solving. They are less likely to chase the flavour of the season and have a more original and evolved approach to building their startups.

“Today’s founders have a very different DNA.

Many have studied or worked overseas. They have a global view and have a very healthy global network,” says Nath. Consequently, in their mind and ambitions, they compete as equals with peers from Silicon Valley as they often think brand and build the latest tech products for global markets. A growing breed of B-to-B and SaaS (software as a service) entrepreneurs like Girish Mathrubootham of Freshworks, Ankur Kothari of Automation Anywhere and Umesh Sachdev of Uniphore are proof.

Diverse flavours

A few things haven’t changed. For example, 70% of entrepreneurs come from the top three cities. But things are likely to get better. “So far, horizontal ecommerce like Flipkat and Amazon were focused on the 50 million English-speaking urban consumers. The next wave of startups (think Meesho and Bulbul) will focus on Bharat, the 300 million consumers who may not be English-speaking but are literate and tech-savvy. This will attract a lot of entrepreneurs from smaller towns and cities,” says Ganesh.

A boost from a better ecosystem should help, too. Razorpay cofounder Shashank Kumar started in 2014 in Jaipur. Within nine months, they moved to Bengaluru where talent, funding and ecosystem were more vibrant. He sees a change, though.

“The Rajasthan government has taken a lot of initiatives to nurture the startup ecosystem there,” he says.

With Jio and the growth in digitisation, consumers in tier-2 and tier-3 cities are already becoming tech-savvy. “Over time, you will see these entrepreneurs from small towns starting to leverage technology for business, too,” says Ganesh.

Startup Landscape – An analysis of 20,000 startups that Excubator tracks in India

1

2

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Source: ExSeed data based on analysis of 20,000 startups that Excubator tracks in India

Gender bias in the startup world is disappointing.

It may have something to do with having few women in the investor world. Not only are there fewer women founders (14%) but they also face significant odds and must prepare better. According to the survey, female founders are older (median age 37 years as against men’s 35 years) and better qualified (74% of female founders have a master’s degree as against 56% among male founders). To understand gender bias, two other survey data points are important to note.

Funding probability of women-led startups halves (at 14%) as against those led by men (30%).

It gets worse if the startup is led by a solo founder— just 5% of startups led by solo female founder like Chahal get funded as against 31% of startups run by solo male founder.

“Women’s mobility is constrained. With the shifting focus to Bharat, I have a very strong feeling the women’s numbers will rise,” says Ganesh.

Perhaps the startup world will then manage to disrupt this age-old imbalance in the corporate world.

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Uber-like lawn-care service launches in Beaver

Lawn Love, a California-based startup founded in 2014, partners with small businesses and allows customers to schedule, review and pay for yard …

Lawn Love, a California-based startup founded in 2014, partners with small businesses and allows customers to schedule, review and pay for yard work on a mobile app or website.

BEAVER — A mobile app and website similar to Uber but for professional landscaping services has launched in the Beaver area.

Lawn Love, a California-based startup founded in 2014, partners with small businesses and allows customers to schedule, review and pay for yard work. The platform is powered by satellite imaging software that reviews a property and generates a quote in less than two minutes.

“Instead of calling a bunch of folks on Craigslist or Yelp and having them physically drive out to your property to get a quote, you could go to our website, punch in your home address and we give you an accurate personalized estimate without ever setting foot on your property,” said said founder and CEO Jeremy Yamaguchi. “We use satellite imagery to measure lawn areas, driveway length and roof perimeter.”

Lawn Love has partnered with hundreds of small lawn-care businesses across the state, including five in Beaver, providing each with scheduling, job routing and payment software. Each independent contractor goes through a screening process to assess level of experience before work can begin. Users can schedule a range of services, including lawn mowing, weeding, aeration and gutter clearing.

“It brings lawn-care providers a new pipeline of customer demand,” Yamaguchi said. “It’s this idea that we can support and elevate small-business owners across the country and help them better compete against the big guys like TruGreen or Brightview.”

While many small providers are responsible for customer support, accounting, taxes and bargaining, in addition to physical landscaping, Lawn Love aims to help these companies streamline operations.

“Small-business creation has been on the decline for 30 years,” Yamaguchi said. “I think that’s in large part due to the Amazons, Walmarts and Starbucks of the world rolling over smaller, independent players. We not only give them software and do the customer acquisition work, but we have this large back-office team that handles all the customer support when issues do arise.”

The average lawn-care company in Beaver has only two employees and lacks the resources to modernize business models, he added. Lawn Love has partnered with more than 20,000 independentcontractors throughout the country, with demand increasing in the Pittsburgh area.

“With the gig economy being what it is right now, I’m surprised something like this wasn’t already an option here,” said Beaver resident and homeowner Jordan Ansley. “As long as employees are earning a fair share and customer service is decent, it’s something I think a lot of us would be interested in.”

The company is still looking for local partners; those interested may visit www.lawnlove.com.

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Too much success can kill a startup. Meet Menlo Ventures’ new ‘inflection stage’ fund that helps …

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The massive funding rounds going to startups aren’t just squeezing out early-stage investors. They’re forcing companies to grow at all costs, whether or not the founders are ready for it.

Menlo Ventures has created a fund dedicated solely to these founders called an “inflection fund.” Instead of trying to beat mega-funds to the seed funding punch, Menlo is banking on its track record and expertise to offer founders a guiding light around a Series B or Series C stage. And in August, the firm brought on former growth equity investor Jean-Paul Sanday to lead the charge.

“Our average check at the fund I worked on at Summit was $30 [million], $35 [million], or $40 million. Now it’s $130 million,” Sanday told Business Insider. “The businesses are just different businesses, but they still need help no sooner or no later than before.”

Read More: An early employee of Twitter and Stripe is joining Accel to hunt for the next generation of first-time founders

Having been on both the investing and startup side, Sanday is a prime candidate to help Menlo Ventures’ portfolio companies navigate what he calls the “rocky” inflection point in growth. According to Sanday, a startup has hit the inflection point once the recruiting team starts receiving resumes unsolicited, customer growth is outpacing what would be expected based on the team’s marketing budget, and customer experience plummets.

In the past, this stage was reserved for a company that had been around for several years, Sanday explained. But with the sudden influx of funding, immature founders are finding themselves with ballooning costs, teams, and issues without understanding how to actually address any of them.

“The businesses can grow up really fast or get a lot of traction in the headline numbers really quickly,” Sanday said. “They have a lot of employees, a lot of revenue, but their maturity is no different, right? Most of the entrepreneurial journey is knowing how to do that.”

An insider’s growth mindset

Sanday came to Silicon Valley like many other investors-to-be: he enrolled at Stanford, and eventually started a mobile ads company with a classmate while he was finishing business school.

“We decided not to raise money for it because it was a mobile ads network and, at the time, that was like the Wild West and there’s all kinds of messy in that industry,” Sanday said.

Still intrigued by the burgeoning mobile industry, Sanday moved over to a mobile gaming startup to run the young company’s growth operation. He said during his tenure, the company went from being “five people working out of a garage” to over 250 employees in “an actual office.” Although he’s written plenty of hefty investment checks during two runs at private equity firm Summit Partners, Sanday says his most valuable experience was experiencing that inflection point first hand.

“At this stage there’s so much more uncertainty,” Sanday said. “You can have a differentiating perspective, a different angle, certainly in the way you can help them,but I also think there’s room for you to lean in more.”

Sanday will be doling out checks ranging from $20 million to $40 million, with room for follow on investments, through the inflection fund. Having just returned from paternity leave, he has not personally invested just yet.

“My bones speak to me and sometimes there are just things that I can just know about or empathize with just simply as a party to the founder,” Sanday said. “It’s hard when you’re writing a $100 million checks to empathize like that. Some of the entrepreneurs haven’t done this before, so they don’t know what those companies look like.”

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