Editor’s note: Indy Guha is a partner at Bain Capital Ventures who invests in early- and growth-stage cloud application/SaaS companies.
Earlier this year, I had the good fortune of becoming the youngest partner at Bain Capital Ventures. (BCV). There’s a lot of work ahead to make sure I make the most of that opportunity and so I find myself reflecting on the personal “product roadmap” that got me here and the “features” I want to double-down on. Perhaps these ideas can be a helpful framework for other up–and–coming investors and to founders who are trying to evaluate the types of VCs they want to work with.
First, let’s define our product: value-added capital. The era of VCs as (hopefully) smart people with a checkbook is over. Today, founders choose investors for more than just money. They hold us to a higher standard (as they should) on customer intros, hiring referrals, partnership angles and strategic vision. As a young investor, you have to deliver on those dimensions to matter.
But how do you get there, especially if you haven’t founded and exited a huge company? What’s the feature set?
Start with a great platform. Founders pick markets with great tailwinds. Similarly, VC is an apprenticeship craft and more than two-thirds of industry-wide returns are persistently concentrated among top quartile firms. As a pre-partner investor, you are a force multiplier, but that requires some “force” (great founders, strong industry networks) to multiply.
Pick a major. The generalist VC model is dead. In order to drive customer intros, know and recruit awesome talent and debate a product roadmap, you must have deep domain focus. As a SaaS VC, Dreamforce is my Super Bowl and I don’t attend SXSW.
Drive programs that founders value. The alchemy of turning ideas into companies doesn’t leave founders with a lot of free time. If you’re asking them to give some of that time to you, make it worthwhile. For me, that meant leading BCV’s Pulse.Commerce program – personalized demo days for Fortune 5000 CMOs. We have hosted senior teams from companies like Nordstrom, Target, Staples, Grainger and many more for meetings with early-stage companies within and outside our portfolio.
Learn endlessly from both sides of the table. Working at a great VC firm means learning from awesome investors. For example, one of my mentors taught me a simple test for thinking about CEOs – “Would you want to work for them? Because if they don’t inspire you, they won’t inspire other people.” I turn to that question every day in gauging whether a founder can build a great company, because it all starts with hiring.
Learning can and should also include time in the trenches with founders. In 2010, I enjoyed a stint as product and engagement manager in the very early days of BloomReach. From that team, I learned the value of making early customers look like heroes. When a customer bets on a startup to power critical infrastructure, they are putting their careers and personal capital on the line. Founders have to make them feel great about that bet. I believe in the same philosophy for VC investing, with founders as my customers.
Meet your service level agreements and drive a high net promoter score. On some level, picking a major and driving programs that founders value ensures that founders will speak highly of you when catching up with other founders. The main additional ingredient is engagement. Your founders work 80+ hour weeks. So should you.
As I re-read this list, it strikes me that thoughtful founders actively look for these attributes – domain focus, ability to help, constructive orientation, engagement – in their investors. That should give folks starting their VC careers some conviction around this recipe for “product-market fit.” For me, this roadmap represents why I chose VC as a calling — a shot at systemic impact. I couldn’t be more excited to continue down that path.