Venture capitalism is an integral part of the way our economy works, especially in the field of tech. Often, the funds provided by these firms are funneled into growing the business which can be a deciding factor in how successful the company becomes when trying to scale an early product into market. However, while these funds are important, the support and guidance provided by an experienced venture capital firm can also be a crucial part of a plan for success. To witness how this manifests in the real world, we looked to the case of Shasta Ventures, a leading venture capital firm based in the San Francisco Bay Area. Their example will help illustrate this idea in practice.
About the company
Before diving into the specifics of its philosophy, let’s first take a look at the background and makeup of Shasta Ventures. The venture capital firm was founded in 2004, drawing its name from the iconic Mount Shasta as a nod towards its long-lasting qualities and its ability to inspire entrepreneurs to climb to lofty heights. The firm focuses on making a relatively low number of investments each year — typically about 10 — so that it can provide adequate support and resources to the companies in its portfolio. This means that the companies it does work with are those that truly show a capacity for growth and providing needed solutions to pressing problems.
The company has evolved its focus over its many years of existence and now concentrates its efforts primarily on enterprise software companies. This is where the firm feels it can make the largest impact and where its greatest strengths lie. One of the aspects underlying this conviction is the presence of Managing Director Ravi Mohan, who is one of the firm’s co-founders. Mohan has focused on software throughout his entire career and has numerous areas of expertise that include SaaS applications, infrastructure management, and data and analytics. This broad range of experience helps inform his unique perspective and contributes to his focus on market fit and team building.
Relationship with entrepreneurs
One of the things that sets the firm apart from others is the way in which it relates to entrepreneurs. In contrast to the operations typically found at other companies, the firm thinks of itself as a service provider to entrepreneurs. This means the firm is constantly seeking to support the entrepreneurs it backs in a manner that is most conducive to their success. This process also involves challenging these individuals in a respectful manner in cases where it can help them achieve their best outcomes. The firm calls this attitude its policy of “unwavering partnership” and it’s at the core of their legacy of successfully helping to bring companies to market.
As the company seeks to support its entrepreneurs, it also looks for specific qualities in those with whom it chooses to work. Some of the key factors it looks for are drive and relentlessness since it knows the long journey required to go from concept to success. The company looks for entrepreneurs with a track record of iteration, which it considers to be more important than a history of successes or failures. This stems from a firm belief that individuals who are both driven and able to iterate are best suited to make pragmatic, as opposed to dogmatic, decisions. This capacity bodes well in a highly demanding field that is constantly changing.
Framework of support
While the above concepts are often repeated in the venture capital industry, it is sometimes harder to find a firm that actually practices what it preaches. That is why it is important not to just look at the words put forth by a company, but also to examine the daily ways in which these words manifest into an actual framework of support. From there, readers can get a better idea of how a firm actually enacts its policies.
In the case of Shasta Ventures, this support permeates the entire company, coloring every action it takes. Oftentimes this manifests as the firm being the lead thought partner for its portfolio companies, helping them navigate tough decisions and potential hurdles. The company keeps in touch with entrepreneurs through a variety of ways, such as ongoing discussions, calls, and meetings. When needed, executives are more than happy to hop on a plane and head to a company’s headquarters in person, to not only bolster communication but to further demonstrate the firm’s commitment to the entrepreneurs with which it works.
To get a better idea of the types of companies that comprise the firm’s portfolio, which numbers more than 100, let’s look to the example of one that has been in headlines of late — AppSheet. Plenty of focus has been paid to the company following its recent acquisition by Google, however, the company has been on the radar of plenty in the industry for some time now in light of its quality software and ability to help businesses meet their goals more easily.
The Seattle startup creates software to help businesses develop data-based apps without the need for a team of developers. It seeks to meet the ever-growing demand for enterprise automation as the tech industry continues to expand and evolve. The company’s unique solution to this problem has already been utilized by thousands of companies who have used the software for a variety of needs such as inventory management and field service. The company’s co-founder, Praveen Seshadri, cites the support of the Shasta team for aiding in AppSheet’s success.
With venture capital firms playing such an important role in the development of much of the economy, it’s important to take time to stop and consider what constitutes true success in the field. As the above overview of the work by Shasta Ventures serves to illustrate, that success often comes from the relationships a firm maintains with entrepreneurs and the ways in which it can support them through the challenging process of getting to market. This look not only helps us understand why the firm is considered a leader in its industry, but also the ways in which entrepreneurs and venture capital firms are working together to help change the face of modern business.