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.
The Sure Shot Entrepreneur
Ankur Jain - Seek Honest Feedback from Investors
Ankur Jain [00:00:00] : And as an entrepreneur, the world is skeptical in many ways, right? Or what you're doing. So people aren't asking skeptical questions, they're challenging entrepreneurs, we want to see how are they handling those? The skepticism, those challenging questions goes back to my point of that self awareness and the balance of handling difficult situations.
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.
Uncle Jane 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 intelligence, software and smart mobility are two of emergent focus areas, and course a good friend of mine. I like collaborating with him, Ankur, welcome to the sure shot entrepreneur.
Ankur Jain: Thank you. Gopi. Thank you for having me here.
Gopi Rangan: Ankur, let's start with you. Tell us about yourself.
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 in from grad school, went to UCLA for master's at that time. And then also got an MBA later on. I went to Warton for an MBA, after a couple of startups. And I started my career in the startup journey.
I was part of a startup and late nineties. This was a startup in the content delivery, networking space, which is acquired in 2000 by public company for about half a billion dollars. Exits came cheap in those days and 2000 the market crashed soon after that and the company was worth a lot less, that rollercoaster 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. From 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 forum called Lumberg capital in San Francisco, which manages about $450 million investing across US and Israel.
Then I was part of a forum called nexus venture partners. Which manages about a billion dollars invested across 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 ventures.
So 2016 is when we started emerging ventures. As you mentioned, we're an early, 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, US.
We like the combination of Silicon Valley go to market thinking and presence here, but also leveraging talent outside the Valley.
Gopi Rangan: How you've had a colorful journey all the way from starting as an immigrant from India in the US working at large tech companies, going through a few universities for education in different areas, working at a startup, starting your own company.
And now 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?
Ankur Jain: If I have to pick one as a, as a important one. In 2010, so about 10 years ago, I practice yoga and meditation. It's a, it's a big part of my life. I spent a couple of hours in that every day. In 2010, I went for a three month program. It's offered by a nonprofit Felicia foundation. And for those three months, I was focused on essentially the word incentive to Sadara, which essentially means in our work.
So using techniques like yoga, meditation, among 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 four, five AM.
You would do a bunch of practices. You would probably have your first meal of the day, maybe around noon. You 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 around the pers, 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 it's a lot of the investing filter has been about investing behind such entrepreneurs. when I say Robert digital personal growth, it is the certain attributes, certain traits that I've been paying attention to.
So one example, it's about entrepreneurs who have a very high level of self-awareness or what they know, what they don't know, because 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'll 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 checking easily.
My program that I went to many of the events after that have given me a different lens, 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 in many ways mirrors that. So that's been a key driver for, the investing methodology that, you know, we follow at emergent
Gopi Rangan: This is very deeply insightful, that three months journey was transformational for you, I see.
Ankur Jain: Yeah, it is. It has been, 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, the social line that I feel like I 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, you should be 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 pins, whatever you do, it's just for the wellbeing of the world.
So it's really investing in the right people is what I would say. It also comes out of that.
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?
Ankur Jain: So what we do do is, I'll give you an example. So when we started in 2016 emergent, 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 was looking, I had been talking to them for a few months, helping them think to the US, go to market and have customers in India, but they were very young in the go to market for the US. I was also looking to start emergent, so this was, I'm adding this as my first investment in emerging. So I'm going to investors, raising capital as part of my evaluation and as well as sort of early help, I had introduced Jim to a company in San Francisco, which ended up being their first customer in Silicon Valley.
So the process of them, my introduction becoming a customer and one of their important customers, and I got was actually a good validation of the company's value and the pieces 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 raised the capital, and I'm very close to making the investment.
And I find out this, company has a Cindy fired Minjar, the community you know that contract. Now I'm on the verge of making my first investment in emergent taking money from investors. So recently looking very closely at my first [00:09:00] investment. They're putting my, putting my creditability on the line. And this is, so this investment is super important and they just been fired from their.
One of the biggest accounts, which I just introduced them to, which was their marquee 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 they articulated, what were the strengths that they had.
What were the gaps in their execution that led to this and what I felt, what the changes that would be in place going forward. And it goes back to the, it was the self awareness that I saw in the founding team. It was the way they handled the whole situation with a certain balance. And it was their, 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 studying, I would say loss on the words of my making that investment. And I would say this bet was indicated a couple of years after that this company was acquired by public company and we got 85% of out on that investment.
We got close to four X on money, less than two years. And the company took that loss and built up on that, look up that learning and, and use that effectively for their growth. So that's an, I would say interesting example of how despite failures and setbacks often the, the sense of is this the right team is such an important driver of, at least our investment philosophy.
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, a 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, but it looks like you had a very strong conviction on the team and the product that they were building. How do you, what, what do you look for? What kind of questions do you ask? What are there certain types of people that you resonate strongly with?
Ankur Jain: So we as a strategy, when you think of seed funds, I think different funds have different strategies. We tend to be high conviction investors. We tend to run a concentrated portfolio. We don't make a huge number of decks. We take a more meaningful ownership in companies. Typically 10 to 15% ownership in a company, we will typically take a board seat or a board observer seat.
Just our model is to be very, have high conviction behind making our backs 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 to see how the questions, for example, how customers are the quieter 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 those, the skepticism, those, 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, 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 will read me, for example well, right? If I am intending to say something, even before I said it.
The good entrepreneurs are already anticipating what I'm going to say next and that already they're answering that question even before I'm asking, in someways. Just looking at my face, looking at body reaction, and they're doing that with other people, for looking at people who are very good at navigating other people who understand empathize with people.
And not able to, respond to that, in those situations. That's what other things, I mean, I wouldn't be adding anything new to what entrepreneur already know. Of course we're looking for make big markets, which or eventually, will turn into bigger markets for startups, which can be venture scale.
We're looking for a key technology driven edge the companies have, but those are similar to how many of the VCs will look at it. But how we look at people is somewhat different compared to many other investors.
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 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 are all good entrepreneurs. You don't, 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?
Ankur Jain: So the process is a funnel in many ways. So often the first meeting itself would give us enough insight about the entrepreneur and of course the other aspects of the business, but as 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 has meant to scale. So when you apply all those filters, plus at least that [00:15:00] initial assessment of the team, I would say major companies, will just realized this 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 you know a deeper fit.
The other aspect of our process are the way we do business is when you 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. They've been on the people who we may have, I may have met, six, seven, eight years earlier, they were not even doing a 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 intended if and when the startup happens, we would be the first port of call for this entrepreneur. So oftentimes it's about building deep or seeding, I would say relationships, which may result in outcomes many years down the road. So that is something important part of our [00:16:00] strategy.
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.
Ankur Jain: So the soon as it's been, it's probably about six weeks, we're not, the investors will meet you tomorrow and that's your credit check the day after. So it's typically, and on the other side, as we are people we've been tracking for years and we invested after that. But typically if there's a new entrepreneur we'd meet and this we're going to know, and we have to make a decision, maybe average six weeks is probably a reasonable estimate.
Gopi Rangan: Okay. six weeks is a reasonable amount of time. It looks to me, it sounds like that.
Ankur Jain: And the other point on this is, which I think may be useful for entrepreneurs, to really buy in for their most VCs, or many VCs, the team is a very critical part of their [00:17:00] thought process. Now they will have different lens of looking at a team and they may look for different things then let's say what we do at emergent, but before for many of them team is very important part of their criteria.
One challenge as an entrepreneur is from my discussion other VC's 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 got 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 firms just did not get excited, didn't feel like it was the right team.
So as an entrepreneur it's unless you specifically build the environment and the liturgical set it out, that team feedback about you as an entrepreneur, very likely you will never get it. And you be thinking people not investing [00:18:00] because they think this, they think that they think's too early. They think bloggers are competitive. The material 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, in a one-on-one way with some of these, some investors and laid out that you're very open to feedback and to really candid feedback and demonstrate that. And then potentially you'll probably get some feedback from some investors.
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.
Ankur Jain: Well, there's almost everything to lose by giving such a feedback, but nothing to gain. Most people are not open, right? They may think they're open, but they're not open, that's true. Most people don't have that openness of self introspection to really give feedback in an effective way. Second, it needs a second [00:19:00] environment. You cannot just in the wrong setting or just over email. You can't, you have to do it in the right setting. It needs that. And so you have to create that to do that.
Gopi Rangan: Do you do that? Do you practice that?
Ankur Jain: 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, candid feedback about them, I give them.
Gopi Rangan: How do you do it, in what format?
Ankur Jain: I would depends on the, I 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're specifically genuinely one that I think it's fair and they deserve to get that.
And I give that feedback to them, not to say that my input or opinion is right or wrong. It's just, it's important to, 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.
Gopi Rangan: 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.
Ankur Jain: I get 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 YCS solution for call centers a freshman at the founder about over three years ago, two and a half years ago was a direction from other investor who thought we could be helpful in terms of their initial though process of building a company. The company was really idea state at that time. And they had one idea.
When I first taught the entrepreneur, I thought the entrepreneur had potential. I was impressed by the entrepreneur. The idea, seemed a little weak. I provided that feedback. About two or three months, a couple months after that, we chatted again. The idea had evolved quite a bit to a different idea now, but I could see, again, that evolution of the entrepreneur I could see that entrepreneur has, is growing the first-time entrepreneur they had never worked for a Double Denim startup before, and we ended up even in those two or three months as we work together. And some of these 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 leaving around that time. , the company started to build initial product. Started to work with some, or at least on a pilot stage, companies around this time. I sent him a video about, a program, it's a program called engineering.
I did that program many years ago, the phenomenal program for me. And there was a video about that program, because again, talking about some of the aspects about human behavior and 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, and when he said that, it felt to me that this was a very deep recognition of that self-awareness, many, many people would look at when it comes to those kinds of topics. They will 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, somebody with a deep sense of maturity and self-awareness, which was.
And the next day we doubled down on our investment and that company has been going phenomenally since then. We had about 25X on our investment and we think this company can really be a game changing company, which has recently rated by Forbes as of the top 50 AI companies in the country, the top and corporate and five enterprise software companies in the country. And the way they're growing, I think is, 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 tracked the entrepreneur for about two to six months. I ended up writing a investment, that person wasn't buying our feedback and growing,
Gopi Rangan: Oh, this is a very powerful, it's very hard to go into a meeting and tell an entrepreneur that, your baby's ugly. It's 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. It looks like this entrepreneur is the perfect example of what you mentioned earlier: entrepreneurs on a rapid trajectory for personal growth, and you caught them at the right moment you give them the right type of advice, which helped them position their company for the future.
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?
Ankur Jain: So it is along the lines that my journey has evolved over the years. So there's a non-profit foundation called Eisha foundation. That that's where I learned my yoga and [00:24:00] meditation from it's a global nonprofit, which spans activities across the US, India, many other countries.
And essentially work towards human wellbeing. It does that through a number of ways. It has number of yoga and meditation programs. It has initiatives around increasing green cover, reforestation value for rivers around education, healthcare. Many of the initiatives they have, I have been they've touched 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 bought transmission for me, what I've, the tools I've received a loan from there. And so a lot of my work has been around making some of the accessible to other people. I think there's so much time and energy everybody's spending on trying to be happy.
It's not for the bucks fixing everything around the world in the life. When you realize it's the lot of the, the trick is inside. It's a bit like, I remember when I was in my [00:25:00] programming days when I was an engineer. Initially, I would try to all debug my program or trying to divide it up, a lot of these switches together and computers together, and then you find a debugger, you would just have to go there inside and it's just so easy to debug a program. And it's something like that. So 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 them 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,
Gopi Rangan: Oh, that's very kind of you, very thoughtful. In 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.
Ankur Jain: Well, thank you for having me in the session. And, yeah great to great to chat with you.
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