E1: Sanjay Mehta (Founder and Partner, 100X VC)

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Sanjay Mehta is the Founder and Partner at 100X VC, an early stage venture fund headquartered in Mumbai. Prior to 100X VC, Sanjay was one of India's most active and sought after angels, having made over 130 investments. Few of the startups in his portfolio include OYO, Wow! Momo, FabAlley, Box8, LogiNext and Block.One.

Sanjay is an entrepreneur-turned-investor and before his investing days, he founded MAIA Intelligence which was eventually acquired by Datamatics Global Services Ltd.

You can follow Sanjay on Twitter – @mehtasanjay. While you’re at it, you can follow me too – @bhatvakash (TW) and @bhatvakash (IG). You may also read up more about me on The Desi VC website.

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Glossary of terms you will encounter in this episode (in the order of appearance):

1. LP: Also known as Limited Partner, an LP is an investor in a venture capital fund. Typically they are pension funds or insurance companies (otherwise known as ‘institutional investors’), but they can also be corporates, wealthy individuals, sovereign funds or governments.

2. Deal-flow: Rate at which business proposals and investment pitches are being received by an investor/VC firm.

3. Micro VC: It’s a fund, aimed at pre-seed and seed (early stage) investing, that is generally smaller than $25M.

4. YC: Y-Combinator (YC) is an American seed accelerator based in the Bay Area.

5. SAFE Note: Also known as ‘Simple Agreement for Future Equity’, SAFE note is an agreement between an investor and a startup that provides rights to the investor for future equity in the company similar to a warrant, except without determining a specific price per share at the time of the initial investment.

6. iSAFE Note: Also known as ‘India Simple Agreement for Future Equity’. Similar to SAFE notes, an investor makes cash investment in return for a convertible instrument.

7. Network Effect: A phenomenon whereby a product or service gains additional value as more people use it.

8. Sector-agnostic: Investments ‘not specific to any particular industry’.

9. Vice clause: Restrictions imposed by LPs that prevents a firm from investing in certain sectors such as firearms, pornography/sex-tech, or drugs.

10. IRR: Internal Rate of Return (IRR) is theoretically the best way to measure the performance of a venture capital firm.

11. Churn: Measure/percentage of customers that stopped using your company's product or service during a certain time frame.

12. Unit Economics: Direct revenues and costs associated with a particular business model, and are specifically expressed on a per unit basis.

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In this episode you will learn:

1. Sanjay’s background and foray into investing

2. Why he backs founders who have failed

3. SAFE notes and iSAFE Notes

4. What he looks for while investing in startups

5. Steps in the evaluation process during an investment

6. Areas and sectors of investments for 100X VC

7. Where 100X VC and Sanjay stand on investments in Cannabis and Cannabis related startups

8. His take on single founder startups

9. Challenges in evaluating B2B SaaS startups

10. What’s more important – product-market fit or founder-product fit

11. How Sanjay has evolved as an investor over time

12. Anti-portfolio – Deals Sanjay missed out on

13. Advice for startups on fund-raising