“A fascinating entrepreneur is someone who can wake up at midnight and still have that passion”
An interview with venture capitalist from Morado Ventures: Associate Dominik Andrzejczuk
In Silicon Valley, there is one venture capital firm that has put up their headquarters called “Morado Ventures Partners”. It is an investment fund led by former Vice President of Yahoo, Ash Patel. It started in 2010 and all of suddenly it could boast of nearly 9 exits. This time, we interviewed venture capitalist Dominik Andrzejczuk.
Q: Firstly, can you please tell us more about the venture capital firm Morado Venture Partners?
Morado Ventures is a venture capital firm that invests in startups that are in the seed stages. There are many changes that happen to a startup because of those initial stages of fundraising. Generally the fund covers until Series B however at Morado Venture, we give a lot of focus on the seed round.
One big characteristic of Morado Venture is the fact that Ash Patel is a partner. Being the former Vice President of Yahoo!, he brings with him a vast network and immense influence. Yahoo! was the first enterprise to introduce the internet business and his skills in dealing with trouble when they come have led to his immense management skills.
Q: Could you tell us a little more detail about your job as an associate, Dominik?
Morado Venture is a startup fund so I do any and all tasks. With Ash being full time and Michael Marquez being part-time, supporting them entails a lot of things to do.
To put in more concretely, for other tasks I deal with the deal flow or inputting data on excel. I have a background as a software engineer so I have created software to understand the deals as well.
Q: You might think that researching for startups can be deceiving at times, what points do you place a lot of importance on?
I don’t think that there’s one point that we are particular about. It’s a combination of not just the market or technology but a lot of other things. However, at the seed stage, the team is probably the most important thing to consider. To verify our hypothesis about the team, we check to see if they are able to carry out certain missions and we also take a look at the team’s achievements in the past.
For me however, technology is really important. To see what they excel or are proficient in. The main theme of Morado Ventures is “Data Driven”. It’s great if it’s a high-technology product that’s able to take a massive amount of data and make it orderly.
The last important thing would be the idea right. For example, if it is able to track data like a sensor and intertwine it with business – that’s something that we definitely look for.
Q: For a startup, the most important points that are normally mentioned are (1) the team, (2) the market, and (3) the idea. For you Dominik, you think that the technology is the important factor, is that right?
Yes, that’s correct. I pay attention to technologies that are able to give solutions to serious problems within the market.
Q: With that said, what for you defines a great team?
I have had previous experience in doing work that’s related to product management for startups. The main work was meeting people and making sure that the first impression of you is that you are sensible and having great team members as an excellent point. It’s also important to have eye contact, self-confidence, the facial expressions, among other things.
If you seem a bit nervous, then we would have to think about the investment a bit more. We also take a look at the academic background of the team members to understand which fields they do specialize in. We tend to take a look at these things no matter who introduces your startup to us.
Q: This is going back a little bit in our conversation but could you give us your thoughts on wthe importance of being “Data Driven”?
Data by itself doesn’t have meaning, however using data to solve existing problems is absolutely important. Problems in retail, account payments, and recommendations can be solved in a multitude of ways by SaaS type of companies.
Problems like storage, data volume, and storing data from megabanks in hardware are difficult to solve. In order to deal with these types of problems, we put extra focus on the means and solutions in order to store these data in a cloud. Also, if we were to take Uber as an example of another company, they can use the combined data from their clients and drivers in order to create new types of businesses.
Q: Indeed. Recently, areas such as IoT and robotics have become hot fields. What kind of areas or fields do
you mainly look at?
We put particular focus on clean tech, mainly nuclear energy. We also, on a foundational level, look at B level SaaS. For Morado ventures, if a company is headed towards the C level, we don’t really stop there. However, the reason for that focus is because for companies headed towards B, the possibility of scaling up is truly huge.
Q: Why do you think there’s a lot of potential for those companies who are headed for B?
A lot of the inbound deals are done by Ash. You can tell the potential by the number of inbound deals. If there are a lot of deals that look similar, we look at whether the company is being actualized despite the problems within the market. This because there are many startups that are facing the same types of problems.
Q: A little bit of change in topic however, do you think that Japanese startups would be able to get funding from Morado Ventures?
It seems like our partner, Michael, really wants to focus locally. If the team is located locally, we could definitely communicate on a deeper level with them. Running your technology company in Silicon Valley has its own advantages, I believe. I think it would be difficult for Japanese teams to get funding with those reasons.
Some difficult points that I think Japanese teams will deal with are (1) English language, and (2) time difference. In the past I worked for a company that was dealing with a huge company in Japan and so I had to wake up at 2 AM in the morning just to Skype and that became really tiring for me. I think that it’s okay to leave the development in Japan. At the very least, I think it’s important that the CEO is located in the same place.
Q: What points do you focus on when you meet founders?
At the basic level, we look at whether or not that founder is full of energy. Becoming a really strong leader is in their disposition, aura, and other characteristics that are hard to describe. For example, we look at if at 12:30 in the evening, he/she is still full of passion and zeal.
Q: What do you typically put importance in when a founder is giving their pitch?
If it’s already heading towards the C stage, then the users are already there so we take a look at the growth rate. Usually, if the results are hard to show and they are headed towards the B stage, we see if there is demand in the market and if the founder has any surprising technologies. If they are a continuous founder, of course they would have a little bit of persuasive power as well.
Q: Do you think it’s important that the founder has passion?
Of course having this passion and zeal is important but more than that, the skill set is more important I think. Their experience and knowledge on technology is important I think. Even with charisma, it will be difficult if the CEO is without experience in technology. The reason being, you can communicate well with the engineers if that’s the case. It’s important to be able to give clear instructions to your engineers so not being able to communicate well is tough. Around 90% of sccessful CEOs have experience in the technology sector. If they are an MBA holder without any knowledge in technology, that’s a red flag for us.
Q: What are some usual failures that easily occur to startups?
When they don’t have teamwork, it can get bad between the founders. Much like how marriage works, you just have to really work with them. If there is a “government” that arises in startups a lot of the communication and time is wasted there. As the startup grows, employee tasks and business affairs can get entwined in government like systems.
Q: At Morado Ventures, how do you help startups?
Aside from funding, we help support startups in many ways. Ash is a hardcore engineer so he can help on the coding side. Although we can give help on the business side, we can give more advice on the technology side.
Let’s take the example of one startup named Clef whose service solution converts personal authentication to QR codes. Sending numbers through e-mail can be a bother so reading QR codes through a phone is really helpful. With Ash’s 12 years of experience in the business side of things, he was able to give a lot of support to Clef.
Q: For portfolio companies who are at the end of the competition, how do you give support to them?
Startups are constantly on an up and down and intense journey and so it’s not that easy to give support. We clarify from the very beginning whether or not they have a product market fit. If there is no product market fit, we make them pivot. If it’s already too late, we introduce them to other VCs or we help them with funding.
Q: Thank you very much. It’s a very basic question but what do you think defines a good investor?
To be quite frank, it’s their reputation being good, right? We say that an investor’s network is a thing. In New York there are 13 million people and so it’s not likely that you will meet the same person twice. In the Bay Area however, there are only 800,000 people. In events, you would most likely see the same faces. If you had a bad reputation, it would be quite inconvenient.
Q: This is my last question, what is the vision of Morado Ventures?
You can see it on Morado Venture’s icon itself which is a burning flame that grows bigger and that’s our vision.
We say that we focus on data driven economics but no one knows what to do with data. With that point in mind and continuing research, we’re looking at the enxt 5 or 10 years of continually investing in data startups. As of now, our headquarters is in the Bay Area and we are planning to expand our fundraising to Asia and Europe as well.
This article and picture is provided by TechWatch. Article is translated in English by TechShake with approval from TechWatch. You can refer to the original HERE.