One of my favorite April reads is Nikhil Basu Trivedi and Tod Francis’ piece, “What did Billion Dollar Companies Look Like at Their Series A?”
Nikhil and Tod, investors at Shasta Ventures, studied 25 billion dollar companies, plus seven that are on their way, to uncover similarities that unicorns like Pinterest and Instagram shared during the early days.
Their research yielded five key traits.
- Easy-to-Dismiss Idea
- Competitive Markets
- Reinventing Existing Consumer Behavior
- Untested Founders
- Zero Monetization
I was most interested in their fourth finding, citing that three out of the four companies were started by untested founders.
Nikhil recently joined me on 33founders to dive a bit deeper.
When it comes to identifying A+ entrepreneurs, Nikhil explains that there’s no perfect resume.
Two defining traits, however, are relentlessness and “a maniacal focus on end user experience.”
They are going to be the types of people who run through wall after wall to make it happen…The companies that stand the test of time have the focus on end users that powers them through.
Testing for A+ entrepreneurs is a challenge VCs face daily. It requires taking risks, especially on seemingly wild ideas like AirBnB and Snapchat.
Nikhil practices healthy skepticism to avoid the ‘what-if’s’. However, never enough to inhibit him from making potentially life changing bets.
You are living for the crazy bets that do work. You’re right, and you built something really special.
Based on my time with Nikhil, it’s crystal clear that meeting founders is his favorite part of the job.
I live for those first meetings with entrepreneurs where in the first 10 minutes you’re hooked.
Sam Chaudhary and Liam Don, the founders of ClassDojo, a behavior tracking software for teachers, serve as a great example.
Nikhil cites the founders ability to combine data and vision as the spark that kept him thinking about the startup throughout the weekend.
After meeting with Sam and Liam on Friday, Nikhil wrote the investment memo over the weekend, and Shasta brought the Class Dojo team in on Monday.
Echoing my recent conversation with Richard Kirby, Vice President at Venrock, “When things are exciting, you have to move fast.”
Nikhil currently serves as a board observer for ClassDojo as well his other investments Bloc, Timehop, and Hinge.
To gain a closer look into each of Nikhil’s investments and why’s so passionate about them tune into episode of 33founders.
Here’s a preview of what we discuss:
- The step-by-step process of Shasta’s investment in Hinge
- How VCs can best support their portfolio companies
- How to avoid ‘what-ifs’ when it comes to decision-making
- The Series A bubble
- The future of mobile health apps