Karthee Madasamy, founder and managing partner at MFV Partners, talks about how deep tech is affecting and transforming traditional industries. Karthee shares important lessons for deep tech founders to help them move from proving the underlying technology to building scalable businesses. He also explains the MFV Partners investment philosophy and what founders can expect when they work with MFV.
Karthee Madasamy, founder and managing partner at MFV Partners, talks about how deep tech is affecting and transforming traditional industries. Karthee shares important lessons for deep tech founders to help them move from proving the underlying technology to building scalable businesses. He also explains the MFV Partners investment philosophy and what founders can expect when they work with MFV.
In this episode, you’ll learn:
[1:45] Genuine continuous fascination with new technology is crucial to success in deep tech.
[10:23] Fundamental questions that any investor would ask when assessing the business model of a deep tech startup.
[13:40] Showing that you clearly understand what the problem is and how you’re going to solve it is a sure way of getting to a second meeting with the investor.
[23:44] Deep tech founders need investors who appreciate the technology and who can help them to prepare for the next stage in their journey.
[25:52] How can more transparency around how to invest in VC funds help the VC ecosystem?
About Guest Speaker
Karthee Madasamy is the founder and managing partner at Mobile Foundation Ventures (MFV) Partners. Karthee invests in frontier-tech startups in robotics, Artificial Intelligence, Quantum Computing,Autonomous Platforms, and Internet of Things. Before MFV, Karthee spent 11 years as a Managing Director at Qualcomm Ventures where he invested across the US, Israel, and India. He started Qualcomm Ventures' investment activities in both Israel and India. Some of his notable investments include Waze (acquired by Google), Validity Sensors (acquired by Synaptics), and BORQS (NASDAQ IPO), among others. Before Qualcomm Ventures, Karthee led technical and product marketing roles in three semiconductor and wireless startups in Silicon Valley.
About MFV Partners
MFV Partners is a Silicon Valley-based early-stage deep tech venture fund based. Founded in 2018, MFV backs visionary deep tech entrepreneurs aiming to transform large industries like Auto, Manufacturing, Energy, Agriculture and Healthcare.
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The investor needs to understand and appreciate the technology. When they say "we hit this milestone", do you understand how significant that milestone is? Because the milestones may not be revenue, so our milestone may not be customers. The milestone may be, "we're finally able to get this to close... closure can be done, or finally we're able to get this thing done."
[00:00:27] 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. Welcome to The Sure Shot Entrepreneur. In this episode, I'm gonna talk to Karthee Madasamy. He's the founder and managing partner at MFV Partners.
[00:00:58] MFV Partners is a venture capital firm based in the Silicon Valley, and Karthee is a good friend of mine. I've known him for many years. Karthee, welcome to The Sure Shot Entrepreneur.
[00:01:07] Karthee Madasamy: Thanks for inviting me. Good to be here and hopefully we'll have a good conversation.
[00:01:11] Gopi Rangan: Yes, I wanna ask you about your startup investments, how you make decisions, your thesis for MFV, the areas that you focus on, why you say no to companies and maybe other things as well. Let's start with you. You were born in Madurai in India, and then you went to college in Chennai.
[00:01:28] Eventually, you made your way into Silicon Valley. You were in San Diego for some time when you were at Qualcomm. You also had a stint in India in venture capital and then you decided to start your own firm. Before we get to MFV, let's talk about your journey. What got you excited about technology in the early days?
[00:01:45] Karthee Madasamy: Yeah, I don't know. I think it was the pre-TV era. So, when I grew up till my mid teenage, there was no, not even a television at home. We just had to listen to radios and newspapers. But I saw during my teenage that vent of technology. We got the televisions and then with the televisions the broadening of things, the computers came into schools.
[00:02:08] So the main years of my teenage probably, I saw each of these technology elements coming into our life and then fundamentally changing it. So I think the fascination probably came from that because I know very vividly what is the pre-technology era means - where you're just drumming around and there's not too much to do and that, and what technology I actually opened your eyes to.
[00:02:28] And then, I was just good at science and good at math. It was a naturally interesting subject for me. When that you put those two things together then you want to spend a lot of time in technology. The other thing probably over time that I found is that the best way to kind of move up in your social strata is through technology.
[00:02:46] Gopi Rangan: That is true.
[00:02:47] Karthee Madasamy: Yeah. Any good technology, fundamentally, what it does. It democratizes access, democratizes reach and that's the way to move up in your social strata. We've seen that in India in the last 25, 30 years. So the fascination all came from there. Every new technology, every new piece of a thing that come into the world and how that fundamentally changes, it's always fascinating to watch.
[00:03:07] Gopi Rangan: We grew up with very little and in a span of less than two decades. We now have power of information in our hands through the smartphones where we can access any kind of information. That kind of access was barely available to a very, very small group of people, most powerful people 20 years ago. But now because of technology, data, information and power is now more democratized and people have access to all of that. How did you decide that venture capital is where you want to be and that's where you want to build your career? What attracted you?
[00:03:42] Karthee Madasamy: That was really an accident, I gotta tell you. This was during business school, like early to mid 2000s. We had just coming out of the dotcom bust and I had done three startups until that point I was in business school. I spent a summer at JK&B Capital with not knowing anything. I just really got fascinated by it until that time I had to put a blinders and work on a specific technology, go build products, and then suddenly, as a vc, every day you're seeing three different companies fundamentally changing the trajectory of technology or business.
[00:04:14] Gopi Rangan: Do you like that?
[00:04:15] Karthee Madasamy: Yeah. You know, JK&B had a hardware group and a software group. Hardware was the deep tech part of and I was the hardware group. Each of these technologies, new types of communication systems, new types of access and it was definitely exciting.
[00:04:29] Every day you see different technologies that you can evaluate and whatnot, right? So that was the original fascination and interest that you actually can help a company evaluate companies, know about these companies, work with these companies, but I didn't know whether I wanted to have a career in that or not. And then at that time, the defacto advice is that don't get into venture capital early in your life. Get into venture capital when you're 50 plus, when you're like getting ready to retire. That should be your last job. So I got every bit of advice saying that, don't do this, don't do this. So I had a, I had an offer to go to Qualcomm Ventures.
[00:05:04] Every advice from everybody said that, don't do it, don't do it. I don't know why I still did it, but told them "I'll do this for a few years and then I have always an operating niche. So I'll probably jump into Qualcomm as a happy medium." It was a technology company as well.
[00:05:17] So if you have my operating edge too much, then I can jump into that and whatnot. But I never. To that. So it's, in many ways the candid answer is that it's an accident. And then there are several times came think, oh, maybe I should have done more, maybe product management or tech work for 10 more years, 15 more years before getting into venture capital. But you never know how those paths go. I have no regrets but it's not like some planned career choice that I got.
[00:05:41] Gopi Rangan: A lot of people come to venture capital accidentally. Although it's now become a glamorous sector - it tends to attract a lot of attention - most people who enter the sector do it accidentally. Now that you've been in the venture capital industry for a while, you decided to stay. You didn't go back to technology or operations or product management or other business roles. So you must really like venture capital. What keeps you attracted and what keeps you in the industry?
[00:06:09] Karthee Madasamy: I think that the fascination with the technology, and I do deep tech, right? So that's been all my career. New technologies, the fascination that started during my teenage still continues on, right? Like every new technology, how that can fundamentally change. So I get invigorated by the works that I do every day.
[00:06:24] For example, tomorrow we're meeting a couple of entrepreneurs, and then that invigorates me, what they're trying to do and what that could fundamentally change. So there's a lot of continued kind of kid-in-the-candy-shop type of fascination to new technology that can influence change. Working with entrepreneurs has definitely kept me going.
[00:06:40] One of the things that I keep like telling people is that deep tech does not mean that it's a very, very long time or it takes a lot of capital. Deep tech really means that things that can be commercialized. It's not like a science fiction. It's not like some lab project that you are fascinated by just the technology part of it, but more importantly, how it can be implemented.
[00:06:57] In my last 15, 20 years, or 25 years of my career, I've seen several of these things getting implemented. You know, first Bluetooth, first 3G. Today, we all take all this for granted. That fascination continues on. So I think that's what keeps me going. I think if I had to do something else, even in venture capital, if I had to do some other area, maybe I will get bored. Evaluating new technology just keeps me going.
[00:07:19] Gopi Rangan: I see that the fascination that you developed for technology as a teenager, you continue to live with that curiosity and eventually you started MFV Ventures. I wanna talk about deep tech and your thesis. In the early days of digital transformation, we saw that advertisement technology, telecommunications and various other industries were transformed with technology.
[00:07:41] Now we're beginning to see other legacy industries like automotive, transportation, industrial manufacturing, and knowledge services. These are all the topics that you focus on. How is deep tech affecting these industries and what are your areas of interest? How do you think about investments?
[00:07:57] Karthee Madasamy: Yeah. When I left Qualcomm, one of the things that was clear was it's not just horizontal technology for technology's sake. It's not like I'm building a micro processor and a horizontal component type of a thing. What we saw was that enough technology have been built now that they are ripe to go take over, transform different industries.
[00:08:16] At Qualcom, we were investors in Cruise Automation, which one of my friends led that round and then that got bought for a billion dollars by GM within like few years and without any revenues and things like that. That started the whole industry around autonomous driving and capabilities. When does GM buy a company without any revenues for a billion dollars. It was clear that this is gonna fundamentally change auto as an industry. Similarly, there are fundamental things happening in manufacturing, agriculture, knowledge services, space - a any one of these things, you look at it, they're fundamentally changing, fundamentally being changed.
[00:08:51] And the reason we started this fund was two things. One is, even in the valley, the number of people that actually evaluate early stage deep tech was getting smaller and smaller because most people have moved on to primarily enterprise software, consumer FinTech.
[00:09:05] So there's a big gap. And then, we were seeing big opportunities coming our way as well because large industries are gonna get transformed over the next several decades. So, there was a big opportunity gap and there was a big opportunity coming in. That's why we started the fund.
[00:09:17] It was very clear that there is a big gap here to be filled and since then more folks have coming to focus on deep tech. But still there is, if you ask a deep tech entrepreneur, one of the questions they'll say like, there's not enough VC that I can go talk to. Especially if you build hardware, there's not enough people that will actually go evaluate. As soon as they see a hardware, they, okay, this is not my cup of tea. So we try to fill that gap. That's the reason for our existence and it aligned with what we have done in the past. All my career I've been working on these type of new technologies. So there's a little bit of centrality to that as well.
[00:09:47] Since we're an early stage deep tech fund, we are not like one sector. We feel that a lot of the pillars of Silicon Valley, which is computing, communication, networking, drives a lot of these deep tech sectors and so we are a general purpose deep tech. Within that we are reasonably broad. We're going all the way from algorithmic models become software to semiconductor components to full stack systems with hardware plus software, early-stage, seed through series A. That's what we focus on. But we all have the roots around either electrical engineering or computer science kinda influencing these changes. So we're not investing in things that we dunno, but within that we are reasonably broad.
[00:10:23] Gopi Rangan: Is it difficult to evaluate deep tech companies? What do you look at in the first one or two meetings?
[00:10:29] Karthee Madasamy: It has an additional layer of technology. That's why it could be difficult. But I think the fundamentals still remain the same. Are you solving a fundamental big problem that the industry or the ecosystem needs? And are you solving in a way that it is fruitful that'll actually go make the change? And are you the right one to go make it? Those questions are still the same whether you're doing enterprise software or FinTech and all those things.
[00:10:52] But you have an additional element of technology. You're solving it using this new technology or whether it's lab-proven. Is that technology gonna work or is it the right technology to go do this job? So that additional layer of complexity is there, which is why sometimes it's harder for some general purpose person to do early stage deep tech because you need some background to say, "Hey, I think this physics will work. I think this particular thing will work. This close loop system would work." So you need to have that additional layer of complexity. But most of the deep tech, still you evaluate through the traditional lenses saying that, "Hey, are they solving a big problem? And is, is the problem worth solving? And if they solve it, will they be able to make money and then are the right guys to go solve it??" Right? So guys are gals. Yeah.
[00:11:36] Gopi Rangan: So you have the standard questions that any investor would ask about the business model, about the market, about the team, and all of those things. In addition to that, you also have questions about the technology. Is it ready for primetime market? Has it been tested enough in the lab? Does the team have the capability to execute and build a product, not just keep it as a research-phase solution? Those are complicated. I want to ask more questions about that, but let's talk about your investments. How many investments do you make? At what stage do you prefer to invest? I want to get a feel for that before we go into more details.
[00:12:12] Karthee Madasamy: Yeah. Sure, sure. We did 12 investments in fund one. We are right now in fund two. We are just closing two investments out of fund two. So our portfolio list is 14 at this point and then we're Constantly evaluating companies. We we're investing, now we're not pausing or we're not slowing down or anything like that.
[00:12:28] What stage? The stage is blurring. Depending on different parts of the country, actually, the stages are very different. We look for companies that have already built some technology because that's what our strength is. We can go deeper into the technology, get our hands dirty, understand whether this will work or not. So, when somebody comes really with just some idea, that's not enough.
[00:12:47] But there are companies, for example, spun out of universities where they've done a bunch of these work already. You know, they may not be enterprise grade yet, but they've done enough of it work already. In those cases we are happy to do that first check as a pre-seed, right? So, we look for some technology job being built and there's a team behind it. Sometimes that's pre-seed, sometimes that's seed. Sometimes that's kinda pre series a sometimes that's series A . But that's the state beyond a, we typically do not go in, so seed through A is what we call ourselves.
[00:13:13] But there have been enough pre-seed we have done, because work has been done in, some universities got spun out or some labs that got spun out. So, we look for technology that have been built, at least to some extent. Yeah.
[00:13:24] Gopi Rangan: So you invest in about three to four companies per, roughly.
[00:13:27] Karthee Madasamy: Right, right. Yeah. We're still more little more closer to a traditional VC fund where our portfolio size for the fund two will be like 20 companies, invested in over three years, roughly six companies a year type of a thing. Yeah.
[00:13:40] Gopi Rangan: What do founders do well in the initial meetings? Can you give examples of one or two companies from your investments? How did they prepare? What did they tell you that got you excited?
[00:13:52] Karthee Madasamy: Right. Let's say Agility is a good example. It's a human eye robot. They've done really well since we invested three years. But I think when they came in human eye robot as an investment category was not something that everybody agreed on. Even today, maybe people don't agree on, right. So what we liked was two things. And this is typically the case with every startup that we end up investing. They focus on the problem and how they're solving it. The problem is in many of these cases, a different type of robot is required, like a human eye type of robot is required compared to a real robot at other robots. That part is understood.
[00:14:23] Then they focus on how they have built it and why they have built it in a way. And this is the life research of Jonathan Hurst, the founder and CTO. So they had done this work over several years all the way from his PhD thesis to taking the research to Oregon State, building that up before spinning that out into a company.
[00:14:39] So in the first meeting that's what we typically focus on. We don't ask for business model, we don't ask for projections. We don't ask for any of these things because if you understand what the problem you're solving and what, how you're solving it, and the technology solving. I think we're all reasonable people to figure out, hey, then we can put this business model through. We can make this type of revenue and all those things.
[00:14:58] So the first meeting we typically tell folks that just focus on what problem you're solving and how you're solving it, right? The successful outcomes with us are people that just focus on those things.
[00:15:08] Aggregate is another good example of how we exploding video data. We were able to understand that, understand the biases, understand where the gaps are, how to optimize it, how to create a data set. That problem was a very well understood emerging problem that they were able to convince us. And then they talked about their code sets, how they're building it, right.
[00:15:27] Through the first meeting we were like, okay, this is something that we wanna spend time on. So I, the first meeting, especially those two things, we typically focus on, because we are a deep tech fund, you know, we want to understand the technology quite a bit.
[00:15:37] Gopi Rangan: What happens after that? How long does it take from the first meeting for you to say, "yes, I want to invest in this company?" can it happen in the first meeting or does it take multiple meetings?
[00:15:48] Karthee Madasamy: It depends. I think there we have this like learning from our experiences that if you're not excited out of your chair, jumping out of your chair in that first meeting, that investment should never happen because you never, you never get there.
[00:15:59] Like the first meeting has to be that, my God, I wanna do this type of a thing. There are some companies that may not make it to the next thing, because once you go a little more deeper, you like, ah, okay, this, there is this problem, there is this, the thing, and all those things. But the first meeting you have jump out of the chair, you feel like, man, I wanna spend time. I wanna invest in it. Right? So that's the first step. We have done a couple of investments within the week, so that's the fastest we have done. Okay. But there are cases, it takes like maybe four to six weeks because we gotta do some understanding, due diligence. We gotta go deeper into the technology. We might bring in some experts that we have in our network to evaluate the tech or sometimes talk to customers in terms of whether this is a problem that needs solving and things like that. Our experience in the last 4, 5 years is that like it can take anywhere from one week to six to eight weeks.
[00:16:46] Gopi Rangan: Okay. Four to six weeks is also enough time to build a relationship with the founders because you are very selective about your investments. You only invest in four companies, maybe five now. And each of these investments is an important investment for you.
[00:16:58] Karthee Madasamy: Exactly.
[00:16:58] Gopi Rangan: Why do you say no?
[00:17:00] What's the most common reason for you to say no?
[00:17:02] Karthee Madasamy: Lot of no's happen in the first meeting and a lot of the times it's because the problem is not interesting enough for us, or we believe it's not large enough. we could be wrong but we have to all have our conviction on what problems are worth solving and what's not. Most of the times it's that, or a combination of we don't believe that the tech is the strongest to solve that problem. So those are the two things that in the first meeting we typically say no to.
[00:17:29] In the subsequent ones, how you going to go to market is an important factor. If you are making a component selling into somebody else who will sell into somebody else who is finally selling into the actual customer, sometimes you don't have any control. So there are cases where it's a good company, a good technology, but we just know that the go to market for this or the the way to go build these things is gonna be much harder.
[00:17:50] Either they need to integrate forward, integrate backward, have a different offering and then you don't believe they have the capability it's going to take a lot more time or a lot more energy to do it, then we'll say no as well. So yeah, the second and third meetings, the reason we say no becomes like more nuanced, more complicated. But the first meetings is typically about, is the problem worth solving, and then is this the right technology to go solve that problem or not?
[00:18:16] Gopi Rangan: The greatest frequency of no happens in the first meeting. Very few companies pass the first meeting. But by the time you get to the second and third meeting, you're already impressed and you are interested and curious to learn more. There might be other reasons, more complicated, more nuanced reasons, and often on a case by case, the answer might change.
[00:18:36] Karthee Madasamy: And there are times we do it based on syndicate and the board and as well, you know, it's like it needs the right set of investors to be around. We also will say no for evaluation as well. We're managing other people's money so we we want a return. So we'll say no for valuation. We'll say no for "this is not the right syndicate and right group of investors to be around the table. All of those things happen in the later parts of the evaluation.
[00:18:57] Gopi Rangan: It has to work for you. Your return profile, ownership, and all of that matters as well. So, you want to know who's leading the round, how's the cap table structured? These are all questions that you need to check the box on those. How does the team work within your firm? Who else is involved in the decision making process? Does everybody say yes and only then that the deal moves forward, or is it okay if one person disagrees initially?
[00:19:20] How does the consensus form?
[00:19:22] Karthee Madasamy: We have six of us, right? So we have Ashish who looks at a lot of the algorithmic data, software. We have Dr. Ruchi who looks at all of the bio stuff. We have Pavan and Steve that work some AI and software stuff and Rudy is a senior associate. So all of us get involved. we're still a small group. We believe in the soft power. There is no hard voting saying that based on the number of votes, we don't do all that right? If there's enough pushback, the person who is sponsoring the investment takes that feedback and then goes back as well. There's also understanding that some of the things you might not agree with, but it's worth making the investment or worth taking that go because of how the argument has been presented.
[00:20:03] We all also know that not every decision has to be completely full consensus because you're inventing the future. So we have that maturity and capability to do that. And we're still a small fund. We move really, really fast as well, so we don't go belabor through a process too much either. One of the reasons we can move quickly is also because we are a smaller team, but the decision making itself it's more through soft power. If one or two of us fundamentally disagree with it, that a business could not return capital, then we can push back and then the investment may not get done. So far we have not gotten to a point where there was like a really big pushback in terms of, hey, this is completely out an arm but we try to go into enough of these areas where not everybody's fully convinced but it's a fine balance. Yeah.
[00:20:47] Gopi Rangan: You're still investing at the early stages. You may not look at maybe pre-seed sometimes, but you're still investing at very early stages. These companies don't have substantial revenue and not a long list of customers. There are a lot of questions. It's really hard for a founder to convince one investor. Convincing a group of six people is definitely difficult. How do founders prepare themselves? What do they do well when they are able to educate and learn about what they're doing?
[00:21:14] What's the advice that you would give based on what you've seen successful founders do? How can they prepare for that meeting with you?
[00:21:19] Karthee Madasamy: Right, right. So first of all, not all six get involved in all the companies. Everybody has a little bit of expertise where they lean towards type of a thing, right? So there's a smaller group, if you will, which is primarily responsible for different areas and whatnot. But you're right. You're investing at seed where most of the time it's actually pre-revenue, which basically means you are to have a conviction. We go with our conviction rather than only data, because I think at this stage that we are investing, we ought to have conviction. "This shall work because this is solving these type of issues. And then there is, this is the way the market is going and there is a way to intersect it." so we ought to have conviction. So early stage investing is all about conviction. It's not about data. And I think that the biggest thing that a founder can do is provide that link. "Hey, here are the reasons why this is gonna happen in this timeframe, and here are the problem areas."
[00:22:07] A good example is...we go back to Agility. So robotics was getting into logistics but it's still small. And then there's this thing that everybody talks about 'robotics level never returns money' 'it's not a big sector' and things like that. But what they were able to convince us is that, look, it's getting automated not for human replacement or anything like that, but just to manage the complexity of things and automation that you need to do the productivity. So the current real robots or current type of robots that moves the shelves around and does the thing, it has a limit. The natural thing is now warehouses and logistics firms need a robot that can be more humanlike, work along with humans. That we believed in. So they were able to convince us off that. So like, Hey, here is where the industry is going, and then this is gonna be a very, very important requirement. You really need to go see revenues. We really need to go see how many customers do you guys already have. But can we understand the problem statement based on where the industry is going, and then intersect with why their solution is the right one to go solve that?
[00:23:04] I think if the entrepreneurs provide that very clearly and then focus on that, as early stage investors, we don't need to go look for revenues or talk to customers and things like that. We need to be convinced of that. And then, because you only focus on deep tech, this is the only thing that we are working on all day, every day, so that helps us as well. Like if I'm doing one day FinTech one day this, then I probably need more time or more data to convince myself. But if we are only working on this all the time for us to get to here's where the market's gonna move, it's easier to get there.
[00:23:34] Gopi Rangan: You have an informed mind because you focus on deep tech and you're familiar with a lot of these topics. When you make an investment, you go in with very, very high conviction. When you go in with high conviction, what can founders expect from you? In what ways are you able to support the founder?
[00:23:51] Karthee Madasamy: So we're an early stage investor. If are really an early stage deep tech startup, what do you require? You require two, three things, right?
[00:23:58] The first one, the investor to understand and appreciate the technology. " We hit this milestone, we understand how significant that milestone is or what are not. Because the milestone may not be revenues, the milestone may not be customers. The milestone may, "Hey, we're finally able to get this to close. Timing closure can be done, or finally we're able to get this thing done." Having that appreciation is very important for the entrepreneurs. They know that, "Hey, here's how we are going and there is an investor group that understands that or provide feedback to that rather than just say, ' where is the revenue? How much revenue? What is your CAC, LTV?' type of a thing."
[00:24:29] Then the second thing is they're still trying to figure out product-market fit, or they're still trying to figure out their go to market - the motion of it - what is the right motion, right? That's where we primarily focus around. It's like, you know, hey, what is the right market for this problem you're solving here? And then what is the right go to market here? Is it partnership or is it, can you introduce them to some of the potential customers here. Can we get some early feedback in terms of how to figure this out?
[00:24:54] Is it very small enterprises or big enterprises? If it's a big enterprises, what is the right model? That's what we focus on. Like we have companies now, they can show, hey, look, here are the validations, here are the go-to-market sales motion. Here is our customers, here is our early revenues and things like that.
[00:25:10] We wanna prepare them for that next stage in their journey. Obviously we help them in bringing some experts if they require, help them in some of the hiring and things like that. .
[00:25:20] But if you ask me, the essential focus is around helping the product and then helping the go-to-market because that's what will either break or make them at that stage of their.
[00:25:30] Gopi Rangan: You are a deep tech investor. You invest early. You invested with high conviction, and you started MFV with that thesis. The venture world is changing, and investors like you are essentially creating the future of venture capital. What would you like to see happen in the future? What's one thing that you would like to change about venture capital to make it better?
[00:25:52] Karthee Madasamy: When I was doing startups, accessing venture capital was very hard. You had to know people, access to them was like a very hard process and whatnot. I think we've come a long way in that. I think most of the VCs are available. It's easier to reach a VC. So the access part, especially the entrepreneur to VC, has significantly changed in the 20+ years that I've been in this business.
[00:26:16] It's not even night and date. It's like night and like bright day in front of the sun, right. There's still more to go, but that's not the same with the LP to the VC world. I think what needs to fundamentally change is that. It's still hard to know who's investing in a venture fund as an LP, who's open for business, who's not, and what is their area of focus. There still is references,
[00:26:39] hey, I know this person's person type of a thing is still a big thing. I think that needs to stop. I think like what OpenLP and a few other initiatives have done is great and I think more efforts are coming up. But I think to really truly open that up, that needs to probably thaw more. My belief is that in the next 10 years that will happen so that the access from entrepreneur to VC will be the same as VC to the LP so that there's more wider diversified pool of VCs that can actually start investing and things like that.
[00:27:11] Gopi Rangan: Capital formation is an important choking point in the flow of money. There's not enough transparency today in who invests in VC funds, how to invest in VC funds.
[00:27:20] It's really difficult. It's very similar to how VC was like 15 - 20 years ago, when you really needed to know people to be able to meet a VC. That has changed, and you're hoping that the same thing will happen in the VC-LP world where things will become more democratized. I hope the same thing happens in our world as well.
[00:27:39] Karthee Madasamy: I'm sure it'll happen. I think so, yeah.
[00:27:41] Gopi Rangan: We're coming towards the end of our conversation and, and I want to ask you about your community involvement. Is there a non-profit organization you are passionate about?
[00:27:49] Which one?
[00:27:49] Karthee Madasamy: So, I won't say the name for certain reasons, but I'm very passionate about people participating in elections. When I was growing up in India, one of the two things is the focus on education and technology.
[00:27:59] The second was that you're still a democracy, right? Everybody has the equal opportunity to go actually. Oh. So I'm very, very passionate about that. I've been following politics since I was 10 years old. So, one of the biggest efforts that I do focus on is that make sure that more people go and vote, people are aware of all the different propositions. The reason I don't wanna say the name is that a lot of the times these organizations will be tied to a specific, ideology or political party.
[00:28:25] For example, Today, one of my tasks this evening is to write postcards with my son and my wife. We're sending postcards to folks that are participating in the Georgia Run off, right? So we want more people to go vote. So that's one of my biggest areas of involvement outside of work, which is around, uh, Making sure everybody participate in elections.
[00:28:45] Everybody participates in this electoral process, either as an informed auditor, but also taking leadership positions and things like that and, and being consistent in the, in the elector process as well. So that's the biggest area that I, that I spend in addition to maybe few other things, but that's the biggest thing because I think like the world, these democracies and, uh, for the democracy to work, we all need to work and we all need to be involved in it. We cannot be indifferent to the process. So anyway, so that's one of my, one of my biggest areas that I get involved in.
[00:29:13] Gopi Rangan: I see that you lived in two of the most impactful democracies in today's world, and you bring that spirit of participating to contribute to that process of democracy. Karthee, thank you very much for spending time with me. This is very insightful. You've given specific examples based on your experience, your investments and startups that you have worked with. Your experience as a venture capital investor and your vision for what the in industry can do in the future. Thank you very much for sharing your nuggets of wisdom with the world.
[00:29:43] Karthee Madasamy: Sure. Is a blast talking to you and, great to join today.
[00:29:47] Gopi Rangan: Thank you Karthee.
[00:29:50] Thank you for listening to The Sure Shot Entrepreneur.
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