Ankur Jain, Founding Partner at Emergent Ventures, describes how transformation through self-reflection shaped his investment philosophy. He empathizes with the challenge entrepreneurs face while seeking honest feedback from investors.
Ankur Jain, Founding Partner at Emergent Ventures, describes how transformation through self-reflection shaped his investment philosophy. He empathizes with the challenge entrepreneurs face while seeking honest feedback from investors.
And as an entrepreneur, the world is skeptical in many ways, right, of what you're doing. So people are asking skeptical questions, they're challenging entrepreneurs. We want to see how are they handling the skepticism, those challenging questions. Goes back to my point of that self awareness and the balance of handling difficult situations.
[00:00:18] Gopi Rangan: You are listening to The Sure Shot Entrepreneur - a podcast for founders with ambitious ideas. Venture capital investors, and other early believers tell you relatable, insightful, and authentic stories to help you realize your vision. Ankur Jain is the founding partner at Emergent Ventures, a Silicon Valley venture capital firm. He likes partnering with companies that build products in emerging tech hubs and leverage Silicon Valley to create a world-class go to market engine.
Intelligent software and smart mobility are two of Emergent's focus areas. Ankur is a good friend of mine. I like collaborating with him. Ankur, welcome to The Sure Shot Entrepreneur.
[00:01:09] Ankur Jain: Thank you, Gopi. Thank you for having me here.
[00:01:11] Gopi Rangan: Ankur, let's start with you. Tell us about yourself.
[00:01:15] Ankur Jain: I originally grew up in India.
I went to a school there called IIT Delhi, which has produced a lot of entrepreneurs and that network has actually helped quite a bit in my venture journey. I came to the U. S. about 20 years ago, came here for grad school, went to UCLA for a master's at that time, and then also did an MBA later on after a couple of startups.
I was part of a startup in late 90s. This was a startup in the content delivery networking space, which is acquired in 2000 by a public company for about half a billion dollars. Exits came cheap in those days in 2000. The market crashed soon after that, and the company was worth a lot less. That roller coaster was a good learning for me, I guess, in hindsight. After that, I was part of another startup called Andiamo, we used to develop data center networking switches. The company was acquired by Cisco for over a billion dollars in 2004.
I was leading a group there for a few years. And then moved to venture capital about 10 years ago. I was part of a firm called Blumberg Capital in San Francisco, which manages about $450 million investing across the US and Israel. Then I was part of a firm called Nexus Venture Partners, which manages about a billion dollars investing across the US and India.
Then I left to do my own startup, which did not succeed, but I had a lot of learning there, probably the hardest part of my professional career, but I learned a lot and I decided to take that learning and come back to venture. So 2016 is when we started Emergent Ventures. As you mentioned, we're a seed-stage venture capital fund focused on intelligent enterprise software companies.
We especially like companies leveraging Silicon Valley go to market, but building product and emerging tech hubs. Many of our companies are building product out of places like India, Austin, Atlanta, Midwest U. S. We like the combination of Silicon Valley go to market thinking and presence here, but also leveraging talent outside the Valley.
[00:03:07] Gopi Rangan: You've had a colorful journey all the way from starting as an immigrant from India in the U. S., working at large tech companies, going through a few universities for education in different areas, working at a startup, starting your own company, and finally launching Emergent Ventures as a founder.
I'm curious to see if there is an event that had an impact on you. Is there a particular event that had a profound influence on who you are?
[00:03:36] Ankur Jain: If I have to pick one as an important one, in 2010, I practiced yoga and meditation. It's a, it's a big part of my life. I spend a couple of hours in that every day.
In 2010, I went for a three month program. It's offered by a nonprofit called Isha Foundation. And for those three months, I was focused on essentially, the word in Sanskrit is sadhana. Which essentially means inner work. So using techniques like yoga, meditation, a number of other techniques, essentially for inner growth.
I was doing that for three months. I had no touch with the outside world. I was mostly in silence for three months. It was an intense schedule. You would wake up in the morning, you know, 4 or 5 a. m. You would do a bunch of practices, probably have your first meal of the day, maybe around noon, you've probably you go to bed at 10, 11 at night.
So it's a pretty intense three months, but I grew a lot during that time. It made me a student of myself or what I would say is more a student of this human behavior and the human mind. And that has shaped tremendously the investing philosophy and the outlook when we look at entrepreneurs. One of the key observations I've had over the years is entrepreneurs who are on a very rapid trajectory of personal growth.
They outperform other people. And that's a lot of the investing filter has been about investing behind such entrepreneurs. When I say rapid trajectory of personal growth, it is the certain attributes, certain traits that I've been paying attention to. So for example, it's about entrepreneurs who have a very high level of self awareness of what they know, what they don't know.
Cause only when you realize there's so much that you don't know can you grow and evolve quickly. It is about entrepreneurs who have a very strong intensity to go the long distance. It's not that they are driven by money or success. This is driven people. So you put them in a soccer game. You put them to volunteer for a nonprofit.
You put them in a startup, whatever they do, they do with intensity and they do a hundred percent. And entrepreneurs who have a strong platform of inner balance, that no matter what life is throwing at them, they're not shaken easily. My program that I went through and many other events after that have given me a different lens to look at people.
And in many ways, the company is a mirror of the entrepreneur. So if the entrepreneur embodies some of these key traits, the culture of the company mirrors that mirrors
So that's been a key driver for the investing methodology that we follow at Emergent.
[00:06:20] Gopi Rangan: This is very deeply insightful. The three months journey was transformational for you, I see.
[00:06:25] Ankur Jain: Yeah. When I came out of that, I wanted to do something which I felt was a, larger impact the work I do. And in many ways, this also aligned that I feel like we want to work with entrepreneurs who I feel have an impact in the world in a positive way. It's about less about many people think of impact as you should be doing something for solving world hunger or doing something for green tech.
To me, it's more about the people. If the people themselves are inclusive. The people themselves have that self awareness. Then whether you build software, whether you build food, whether you build safety pin, whatever you do, it's just for the well being of the world. So it's really investing behind the right people is what I would say.
It also comes out of that.
[00:07:09] Gopi Rangan: You mentioned that this self awareness that you went through strongly influences you and your investment philosophy and how you look for opportunities. What do you look for in entrepreneurs when you meet them?
[00:07:22] Ankur Jain: I'll give you an example. So when we started in 2016, our very first investment was a startup called Minjar.
And this was a company that started initially out of India, was in the cloud management space. And I was impressed by the founding team and the thesis they had. I'd been talking to them for a few months, helping them think through the U. S. go to market. They had customers in India, but they were young in the go to market for the U. S. I was also looking to start Emergent. So this was my first investment in Emergent. So I'm going to investors raising capital. As part of my evaluation, and as well as sort of early health, I had introduced him to a company in San Francisco, which ended up being their first customer in Silicon Valley.
So the process of my introduction, becoming a customer and one of the important customers that I got was actually a good validation of the company's value and the thesis, and which supported my investment thesis in the company. So now fast forward a few weeks from that, I've put in together this round and I've raised the capital and I'm very close to making the investment.
And I find out this company has simply fired Minjar. They terminated that contract. Now, I'm on the verge of making my first investment in Emergent, taking money from investors who were essentially looking very closely at my first investment, putting my credibility on the line. So this investment is super important. And they've just been fired from their, one of the biggest accounts, which I just introduced them to, which was the Markey account in Silicon Valley. And so I had a conversation with the founders just to understand what happened. What struck me was the transparency and the openness with which we articulated what were the strengths that they had, what were the gaps in the execution that led to this and what I felt what the changes that would be in place going forward. And it goes back to it was the self awareness that I saw in the founding team. It was the way they handle the whole situation with a certain balance and it was there, I would say not the belief belief is probably the wrong word, but the awareness of what this company would continue to do going forward and how they'll learn from this. So I went ahead with that investment. And despite that stunning, I would say loss, uh, on the verge of my making that investment.
And I would say this bet was vindicated a couple of years after that. This company was acquired by a public company. And we got 85 percent IRR on that investment. We got close to 4X our money in less than two years. And the company took that loss and took that learning and used that effectively for their growth.
So that's, I would say, an interesting example of how, despite failures and setbacks, often the sense of, is this the right team, is such an important driver of at least our investment philosophy.
[00:10:19] Gopi Rangan: When you were starting Emergent Ventures at 2016, this was a big risk to take on a company that just lost a major customer commercial contract.
And yet you jumped in. You could have easily walked away from it and it would not have been a problem. The entrepreneur would understand the situation, but you didn't, and you stayed. And that resulted in a great journey for the startup, and you made good returns as well. It looks like you had a very strong conviction on the team and the product they were building.
What do you look for? What kind of questions do you ask? What are there certain types of people that you resonate strongly with?
[00:10:55] Ankur Jain: So we as a strategy, when you think of seed funds, I think different funds have different strategy. We tend to be high conviction investors. We tend to run a concentrated portfolio.
We don't make a huge number of bets. We take more meaningful ownership in companies, typically 10 to 15 percent ownership of a company. We'll typically take a board seat or board observer seat. Just our model is to be very, have high conviction behind making our bets and making make fewer bets. So as part of our process, one is we tend to spend a fair amount of time with founders and observe them.
We will typically go to customer meetings together. We'll sit down in those meetings. We'll see how or the kind of questions customers are asking. As an entrepreneur, the world is skeptical in many ways, right, of what you're doing. So people are asking skeptical questions.
They're challenging entrepreneurs. And we want to see how are they handling skepticism, those challenging questions. Goes back to my point of that self awareness and the balance of handling difficult situations. Many people think, hey, when you're a CEO, you're successful, life is easy. But in reality, what I've seen is as your scope of responsibility grows, and you become more successful, you become to take a more leadership role in a company with more people, more things go wrong in your day every day, not less.
And so that inner balance is so critical. So we are often observing them in different situations, observing their body language. The good entrepreneurs, they're very good reader of people. They navigate people very well. So they would read me, for example, well, right? If I am intended to say something, even before I've said it, the good entrepreneurs are already anticipating what I'm going to say next.
And they're already, they're answering that question even before I'm asking, in some ways, just looking at my face by looking at body reaction, and they're doing that with other people. So looking at people who are very good at navigating other people who understand, empathize with people, and are able to respond to that in those situations.
That's what other things, I mean, I wouldn't be adding anything new to what entrepreneurs already know. Of course, we're looking for big, big markets, or which eventually will turn to be big markets. For startups, which can be venture scale, we're looking for a key technology driven edge that companies have, but those are similar to how many other VCs may look at it.
But how we look at people is somewhat different compared to many other investors.
[00:13:13] Gopi Rangan: This is very interesting. So you're, you're going quite deep with the entrepreneur on their psyche that you try to understand who they are, what kind of personality they have. You're not just looking at, uh, hard data and metrics that is important as well, but you're also looking at body language and like how they observe you and how they react to you.
Are they in tune with their surroundings and the people around them? And those are some things that you watch for. This is very, very interesting. When you meet entrepreneurs, especially at the earliest stages, they all kind of look alike, especially, you know, once you pass the first few filters, you get to a point where they're all good entrepreneurs.
You cannot afford to spend a lot of time. You can ask them to spend a little bit of time, maybe go to one or two meetings with their customers, which is already more than most other VCs are able to get out of the entrepreneur. How do you look for information when you have not many opportunities to gather information?
[00:14:11] Ankur Jain: So the process is a funnel in many ways. So often the first meeting itself would give us enough time insight about the entrepreneur and of course, the other aspects of the business, but this market space, we understand whether we can add value to this market space, whether we think there's enough of a edge here in the company to build something, which is venture scale.
So when you apply all those filters, plus at least that initial assessment, of the team. I would say many of the companies we just realized is just not a good mutual fit. So we only pursue some of the other deeper analysis or for the company that you think are a, you know, deeper fit. The other aspect of our process or the way we do business is when we meet great people, even if they're not necessarily entrepreneurs right now, whether they may not even be raising capital right now, we make a note of them.
There have been other people who I may have met six, seven, eight years earlier. They were not even doing the startup at that time, or a startup that was relevant to us at least. But we made a note, this person is going to do something interesting. And we just stayed in touch, with the intent that if and when the startup happens, we would be the first point of call for this entrepreneur. So oftentimes about building, you know, or seeding, I would say relationships, which may, uh, result in outcomes many years down the road. So that is something again, part of our strategy.
[00:15:35] Gopi Rangan: So how long does it take from the first meeting to closing an investment?
I understand this can be a broad spectrum, especially if you're looking at building a relationship. It might take a long time, but maybe a typical example of how long it takes would be good to know.
[00:15:51] Ankur Jain: So the soonest it's been, it's probably about six weeks. We're not the investors who will meet you tomorrow and then say, okay, I just check the day after.
So it's typically. And on the other side, I've seen people we've been tracking for years. And we invested after that. But typically if there's a new entrepreneur, we'd meet and then we're going to know, and we have to make a decision, maybe average six weeks is probably a reasonable estimate.
[00:16:17] Gopi Rangan: Okay. Six weeks is a reasonable amount of time.
Looks to me, it sounds like that.
[00:16:21] Ankur Jain: And the other point on this is, which I think may be useful for entrepreneurs to, uh, definitely buy input there. Most VCs. For many VCs, the team is a very critical part of their thought process. Now they would have different lens of looking at a team and they may look for different things than, let's say, what we do at Emergent.
But for many of them, team is a very important part of their criteria. One challenge as an entrepreneur is, from my discussion with other VCs or my experience with many other VC firms, many of them are deciding to go forward or not go forward based on their assessment of the team. But that's a feedback.
Entrepreneurs never get, they only get feedback. Oh, it's too early for us. It's too late for us. Market is not big. It's too competitive. They get all these other seemingly reasons, but in many, in many cases, these were secondary reasons. The main reason was essentially the venture capital firm just did not get excited, didn't feel it was the right team. So as an entrepreneur, it's unless you specifically build the environment and the, and the literature to ferret out that team feedback about you as an entrepreneur, very likely you will never get it. And you'd be thinking people not investing because they think this, they think that, they think it's too early.
They think the market is a competitive, the market is too small. But, and the way to get that feedback is you have to approach it with a certain level of openness and humility, and in an honest way, seek feedback, you know, one on one way with some of these investors. and lay it out that you're very open to feedback and truly candid feedback and demonstrate that.
And then potentially you'll probably get some feedback from some investors.
[00:18:00] Gopi Rangan: This personal feedback is very rare to see. Most VCs give a standard set of canned responses, and it's even hard enough to get to any other facts. But getting to a feedback on personality is, I haven't seen that at all. It very rarely happens.
[00:18:14] Ankur Jain: It's because there's
almost everything to lose by giving such a feedback, nothing to gain. First of all, most people are not open, right? They may think they're open, but they're not open.
[00:18:25] Gopi Rangan: That's true.
[00:18:26] Ankur Jain: Most people don't have that openness of self introspection to really take feedback in an effective way. Second, it needs a certain environment.
You cannot just in the wrong setting or just over email. You have to do it in the right setting. It needs that. And so you have to create that to do that.
Do you do that? Do you practice that?
The entrepreneurs who truly seek that I do that, but they have to seek it. If I feel they're coming to me and they genuinely want open or kind of feedback, about them, I give that.
[00:18:53] Gopi Rangan: How do you do it? In what format?
[00:18:56] Ankur Jain: It depends on the specific feedback I have. If it requires a phone conversation, I'll get on a phone call with them and and do that. If it's something which is more pointed about a specific aspect, I'll do that over email. So but yeah, if they specifically genuinely want that, I think it's it's fair and they deserve to get that.
And I give that feedback to them, but not to say that my input or opinion is is right or wrong. It's just it's important for them to know this is what I perceived about them. And so they can use that as a data point and their own assessment.
[00:19:26] Gopi Rangan: The feedback is precious. It's very hard to get, especially honest, thoughtful feedback.
Now what they do with it, it's up to them. But I agree with you that the receiver needs to be in an open state of mind and must have the desire to get this. But has it ever happened where you gave feedback and someone worked on it and came back to you and now they've impressed you and you have actually warmed up to the idea and you like the business more as a result of the changes that have happened?
[00:19:55] Ankur Jain: I think many times, many times. I'll give you an example. One of our portfolio companies called Observe.ai. It's an AI cloud. It's a voice AI solution for call centers. I first met the founder about four or three years ago, three and a half years ago.
Was an introduction from other investor who thought we could be helpful in terms of their initial thought process of building a company. The company was really idea stage at that time. And they had one idea when I first talked to the entrepreneur. I thought the entrepreneur had potential. I was impressed by the entrepreneur.
The idea seemed a little vague. I provided that feedback. A couple of months after that, we chatted again. The idea had evolved quite a bit. It's a very different idea now. But I could see again that evolution in the entrepreneur. I could see that entrepreneur is growing. The first time entrepreneur that never worked for, never done a startup before.
Even in those two or three months as we worked together in some of the discussions, I could see that evolution. He was an entrepreneur who was incredibly open to feedback. And I provided that feedback as we went along, and I could see taking that feedback on constantly refining himself and his approach.
Essentially, there were two founders and very little else at that point, and we ended up leading the round at that time. The company started to, you know, build the initial product, started to work with some early sort of pilot stage companies. Around this time, I had sent him a video about a program called Inner Engineering. I did that program many years ago, a phenomenal program for me. And there was a video about that program, which was again, talking about some of the aspects about human behavior and the human mind. I sent him the video. I talked to him after that. He said, "This was just mind blowing.
I had to watch the video three times to grasp it". And when he said that, it felt to me that this was a very deep recognition of that self awareness. Many people would look at, when it comes to those kind of topics, they would often react, "Oh, I already know all this stuff." For somebody to say, "I had to watch it three times to try to grasp it", it presented to me as somebody with a deep sense of maturity and self awareness. Next day, we doubled down on our investment.
And that company has been going phenomenally since then. We're about 25X on our investment. And we think this company can really be a game changing company, which is recently rated by Forbes as among top 50 AI companies in the country and among the top 25 enterprise software companies in the country. And the way they're growing, I think, uh, could be a multi billion dollar category-defining company.
But yeah, so that's an example of somebody who was very open to feedback and we've tracked the entrepreneur for about three to six months and ended up writing a investment that person was imbibing that feedback and growing.
[00:22:27] Gopi Rangan: Wow. This is very powerful. It's very hard to go into a meeting and tell an entrepreneur that 'your baby's ugly'.
It takes a lot of courage for the person to deliver that and it takes even more courage for someone to listen to that and reflect on it and work on the issue. Looks like this entrepreneur is the perfect example of what you mentioned earlier, entrepreneurs on a rapid trajectory for personal growth and there is, you caught them at the right moment.
You gave them the right type of advice, which helped them position their company for the future. And it's great to hear that the outcome is also fantastic. We could keep talking more, but I want to talk to you about your community involvement. Is there a nonprofit organization you're passionate about and why?
[00:23:11] Ankur Jain: So it is along the lines that my journey has evolved over the years. So there's a nonprofit foundation called Isha Foundation that that's where I learned my yoga and meditation from. It's a global nonprofit which spans activities across, you know, U. S. India, many other countries and essentially work towards human well being.
It does that a number of ways. It has a number of yoga meditation programs. It has initiatives around increasing green cover, reforestation, rally for rivers, around education, healthcare, many other initiatives they have. They've touched the lives of millions of people and has at least a couple of million volunteers, I think, in some form globally now.
I've been an active volunteer there for many years. It has been both transformation for me, the tools I've received and learned from there. And so a lot of my work has been around making something accessible to other people. I think there's so much time and energy everybody's spending on trying to be happy.
It's a lot of it about fixing everything around the world in their life. When you realize the trick is inside. I remember when I was in my programming days when I was an engineer. Initially, I would try to all debug my program or trying to wire up a lot of these switches together and computers together.
And then you find a debugger. You just have to go there inside and it's just so easy to debug your program. And it's a bit like that. It's about, I would call it like a debugger for myself. That's what I found some of these tools to be. And so it's really been about making that more accessible to people.
I often also facilitate some simple meditation sessions for free for people. So yeah, that's been an area which has been a big, big driver for me in terms of working with the community.
[00:24:50] Gopi Rangan: That's very kind of you. Very thoughtful. Your own wise words. The company is a mirror of an entrepreneur. It's clearly true that Emergent Ventures is a mirror of you and your thoughtfulness.
Thanks a lot for spending time with me today and sharing your wisdom and experience.
[00:25:06] Ankur Jain: Thank you for having me in the session and yeah, great to chat with you.
[00:25:12] Gopi Rangan: Thank you for listening to The Sure Shot Entrepreneur. I hope you enjoyed listening to real-life stories about early believers supporting ambitious entrepreneurs.
Please subscribe to the podcast and post a review. Your comments will help other entrepreneurs find this podcast. I look forward to catching you at the next episode.