Rise of Solo GP with Ashmeet Sidana
About Ashmeet Sidana: "Ashmeet is the Chief Engineer of Engineering Capital, thats what he calls himself. He is the founder and sole GP of Engineering Capital with AUM $150M. His experience includes managing venture capital funds, serving on multiple Boards of Directors, and helping build the industry leading products VMware ESX Server and Silicon Graphics WebFORCE. Before this last decade as a venture capitalist Ashmeet was an operating executive with hands-on operating experience as a CEO and Entrepreneur. He has had many successful excites. For example he led the seed round for Azure Power which went public on the NYSE (AZRE). He was the first investor in SignalFx which was acquired by Splunk and led the seed round at Netsil which was acquired by Nutanix. His current portfolio includes Robust Intelligence, Menlo Security and .Kentik and he was the first investor in all of these companies. "
QUESTIONS:
You focus on technical insights. “The companies that represent the largest, most well-recognized, best-established technology to the IT ecosystem don’t power the best data centers in the world,” “Those are run by Google, Amazon, Alibaba and Facebook.” - Ashmeet quote (WSJ). Why did you find a market need to create the Engineering Capital VC fund?
You are the first check for a hardware startup. Do you see further movement in the emerging fund manager space as more micro and pre seed funds are becoming institutional asset classes? Can you elaborate about the new market opportunities for hardware companies? And how has the market changed in the last 5 years?
You were an operator at VMWare ESX Server. How do you think your experience as a founder and operator has changed your perspective in helping your portfolio companies from grounds up?
Your first fund was oversubscribed. You started out raising $25 million but ended up at $32 million. Your limited partners are a combination of institutional investors: a university endowment, a foundation and a fund-of-funds, as well as individuals including serial entrepreneur and university lecturer Steve Blank, GGV Capital Founding Partner Scott Bonham, Invati Capital founder Mukesh Patel, and Kathryn Gould, one of the industry’s first female venture capitalists. Cedana Capital, which has been investing in new micro-VC funds, is also an investor.
What systemic changes are required to bring more capital deployment to diverse GPs?
Your investment thesis focus is on infrastructure as a service and big data centers
How your risk profile adjustment has changed over years and do you think there will be further changes considering the uncertainties and volatility in the market?
For fund managers there is always the question on what is a good expected return? Achieving expected returns is not simply a function of high multiples. It depends on the risk profile and time and stage of capital deployment. How do you navigate those questions with your LPs?
You write the first check, then do follow on rounds on rounds until they exit. You are leading and anchoring a seed round and starting with $500,000 or $1 million, and then continuing to do pro rata in subsequent rounds. How are you managing this as a single GP? What are the pros and cons being a single GP? Do you think you are starting a lean fund movement?
“The value I want to bring is true technical insight into the market and real hands-on help in building your company,” “Typically my entrepreneurs are executives [who] understand how enterprises work. They’re still pretty young, in their 30s, [but] they have experience and are not kids. They’re not living in a frat house throwing ideas on a wall.”- Ashmeet quote (WSJ) As more companies tend to stay private, do you see the exit environment will look quite different than what it was in the last few years?
By recycling a realized gain as opposed to distribution. What is your thought on recycling the management fees?
Venture Capital has seen a great shift in the last 10 years where even pre-seed funds are now becoming an institutional asset class. Whereas more seed funds are launching full stack vc funds with larger AUM, to continue investing in the entire lifecycle of the startup. What is your perspective on the time diversification in private venture investing?
I think venture capital is not a job but it is a lifestyle. For a lean fund like yours how do you prepare yourself for such a lifestyle. What learning habits that you have or acquired ?
How do you analyze various thinking models?
How do you maintain work life balance?