How Entrepreneurs Taught This Investor that Capitalism is Not the Antithesis of Social Good
Schwark Satyavolu, General Partner at Trinity Ventures, shares the highs and learnings of being an investor
Trinity Ventures is a well-known name in the Silicon Valley. The coffee major chain Starbucks is a product of this venture fund along with other star investments, such as New Relic and Care.com, both of which have gone public.
Schwark Satyavolu, General Partner at Trinity Ventures, a VC firm has built an impressive portfolio. In an interview with Entrepreneur India, he gives an insight on his journey as an investor.
Investment-A Bet on the Founders
On being asked how he evaluates the entrepreneurs he wants to support by making investments, Satyavolu lays out a company’s stage-based approach, “What we look for depends on the stage of the company. At the very early stages, much of the investment comes down to a bet on the founders. We invest in founding teams whom we believe possess grit, passion and unique perspectives.” Before becoming a full-time investor three years ago, Satyavolu was an entrepreneur himself. Having been on the other side, he knows well how to identify truly passionate entrepreneurs.
In the case of mature companies, factors like the quality of their execution to-date, their product/market fit and business traction become the main focus, points Satyavolu.
An Interdependent Relationship
Satyavolu sees the relationship between an investor and an entrepreneur as an interdependent one. “When an entrepreneur and investor make a deal, it is an opportunity for both of them to learn from each others’ strengths,” he says.
When asked how much control an investor should exercise on the company, Satyavolu says that the onus of running the business lies on the entrepreneur. “Investors can assist entrepreneurs to help prevent them from making mistakes, but ultimately it is up to the entrepreneurs how they run their businesses.”
Having said that, Satyavolu constantly works as an advisor and a mentor with the founders and the executive team to help them do a good job. “Entrepreneurs partner with me to leverage my experience and expertise so I can help them to avoid preventable mistakes. My role is to support them to realise their dreams, not to usurp their dreams with my own,” he adds.
No Journey Complete Without Hits & Misses
On success and failure, he says that both are unavoidable and equally important to an entrepreneur’s journey. “We can’t have one without the other. What’s important is to leverage those misses and near-misses as learning opportunities.”
Sharing a personal experience from his journey of entrepreneurship, he recalls, “At my first start-up, we raised a large amount of capital early in our lifecycle. When the ‘00 downturn’ hit and continued for several years, we ended up needing to recapitalise the company. As a result, some of the early employees and investors didn’t make as much money as I’d have hoped when we exited.”
It was a crucial occurrence, he says, “I learned from this experience and incorporated those lessons into my second company.”
Lessons from the Other Side
While entrepreneurs may have much to learn from investors, the latter can also take home invaluable lessons from the founders. For Satyavolu, the biggest learning has been that it is possible to make money and do social good at the same time. “The common belief is that capitalism is the antithesis of social good. However, that’s not true. I'm inspired by the founders who are building fast-growing for-profit companies that are igniting positive social change on a broad scale.”
Hot Sectors for Investment
Financial services, fintech, artificial intelligence, are the some of the hot sectors that lie on this investor’s radar. “In the fintech space, I see a lot of opportunity to invest in startups creating financial services infrastructure and APIs,” he said.
They remain focus sectors for him, along with security and cloud infrastructure being the other areas he is interested in.