03082020: Interview by Email: @aashaysanghvi_
Kicking off our month of March here is the FIRST of THREE “Interviews by Email“ this month on this newsletter.
After our last episode with Dan Scheinman, an extremely experienced and seasoned Operator / Investor, and part of the “CISCO Mafia”, for our 6th “Interview by Email” We are delighted to have @aashaysanghvi_ - A young, upcoming Investment Associate at one of my favorite firms - Haystack Ventures.
Amidst all the click-baity narratives about Junior VCs living it up at open bars in SV, Aashay has translated a classical Ivy league education into a true apprenticeship at Haystack under Semil Shah - He is a keen student of history, industries, markets and trends. I’ve a great regard for Aashay and as a founder, would rate him as one of the sharpest and most thoughtful associates I’ve met in during my startup journey.
This tweet is an example of how he is able to focus on seemingly mundane topics in the quest to create a thesis / world view (Also do subscribe to him on Substack)
This Interview should give you a better, more rational idea of how an early stage Junior VC *actually* operates. I hope you enjoy this edition of “Interview by Email”
From: Aashay Sanghvi
To: BUGGER OAF <firstname.lastname@example.org>
What describes you?
1/ What describes you best?
I am an investor, working for Haystack VC - a sector-agnostic early - seed stage VC
2/ Where are you based?
I am based in San Francisco.
3/ How long have you been associated with startups?
Roughly 5 years. I was 18 when I had my first job working with startups, and I’m 23 now. I was in school from 2015-2019, but worked on and off with different companies in investing + operating roles.
3 lessons learnt investing in startups?
1) What you don't know matters than what you do know.
At the seed stage, you can enter "analysis paralysis" and talk yourself out of any company. It's important to focus on a few key variables — what can go right, the authenticity and obsessiveness of the entrepreneur, and early engagement + adoption. You need to understand what risks you take + what the "unknown unkowns" are and how you get compensated for those.
2) There are more “flavors” of venture capital than I could’ve ever imagined.
I learn every day about different strategies and styles of seed, venture, and growth. It really blows my mind.
3) In order to do venture well, you should be set on doing it when you start.
This may seem obvious, but I do feel as if there are a lot of people in the industry who are flippant about doing venture or just viewed the option within a larger basket of alternatives that included operating or other forms of finance. I can't see that mindset leading to long term success.
Pick a topic you'd like to discuss in detail:.
Convincing your colleagues of a deal you love
Haystack has a highly collaborative internal deal process. There's no such thing as "Aashay's deal." If we make an investment, we're all bought in, excited about the opportunity, and expected to contribute to supporting the founder.
So with that context in mind, what does advocating for an investment look like?
It's about coming to the table with judgment and a strong point of view.
With early stage companies, it's easy to just list out all the details, but if I feel strongly about a company, Semil and Ian both want me to outline *clearly* why this is a compelling, strong business in the long run, why this particular category or market opportunity is exciting right now, along with the key assumptions and risks.
Furthermore, the analysis should be coupled with more emotional and intuitive resonance with the entrepreneur's vision.
2 big trends you're seeing around you.
The common moat for core IT infrastructure businesses is moving…
Larger companies are increasingly built around open source.As they grow, their success is increasingly due to network effects rather than switching costs / IP. Network effects are the most sustainable source of accumulating advantage, so this is very exciting for the category.
Business software has gone from living in an "application layer" to a "collaboration layer"
But, the space is very crowded and most products or companies are derivative.