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Karthee Madasamy, formerly of Qualcomm Ventures and now running MFA Partners, shares his journey into venture investing, highlighting key lessons from evaluating companies like Waze and MapMyIndia. Discover his insights into deep tech, corporate venture capital, and what it takes to launch your own VC fund.
What you’ll learn
Discover how Karthee transitioned from a PhD path in technology to venture capital, driven by a desire to leverage his business acumen in the tech world.
Learn how to define your role in venture capital, emphasizing the importance of identifying and filling specific expertise gaps within a VC firm, even as an entry-level associate.
Understand the critical balance between solving immediate business problems and being aware of the rapid commoditization of underlying technologies when evaluating deep tech investments.
Explore the nuances of incentive structures in corporate venture capital versus financial VC firms, particularly how compensation and upside potential evolve over a career.
Delve into the strategic reasons behind launching MFA Partners, focusing on the gap in funding for deep tech companies and the new opportunities arising from verticals adopting technology.
Gain insights into quantum computing with PsiQuantum, understanding the practical applications and potential breakthroughs in solving complex, computationally intensive problems for industries like drug discovery.
Takeaways
Early career focus: Prioritize building a network with entrepreneurs, honing investment instincts, and understanding personal expertise areas, as the initial focus remains consistent across corporate and financial VC.
Map data value: Investing in MapMyIndia was driven by the thesis that the quality of unstructured data in a country like India would be valuable and hard to replicate, proving true even today.
Limited corporate upside: Recognize that corporate VC provides downside protection but caps upside, making it ideal early in a career but potentially limiting as a VC’s deal-making skills grow.
Fundraising challenges: Raising capital as a corporate VC demands building trust-based relationships from scratch, requiring a long-term vision and resilience to navigate the ups and downs of fundraising.
Quantum potential: Quantum computing is not about replacing desktops, but solving complex exponential problems in drug discovery and computational chemistry, offering transformative impacts on industries and humanity.
Separation is hardest: The hardest thing to do in fundraising is separating people from their capital, which means assuming that not everyone you think will invest, will invest and then adjust the fund size.
Viral quotes
"In venture capital...you have to basically define a job opportunity, job description, telling them that you need this and this is what I can come and help you out."
"Understanding the technology curve, technology progress is extremely important to figure out which is going to last longer and which is going to just go up in flames."
"The transition to starting a firm probably is one of the hardest experiences of my career that I had to go through...raising money from LPs is very different from raising money as a startup."
In this episode, we cover
(00:00) Introduction
(00:51) How Karti came into venture investing as a career
(02:41) Karti’s first job in venture
(04:52) Early deals in venture
(07:34) How to identify new technologies getting commoditized
(09:56) Investing in MapMyIndia
(13:32) Differences in incentives in venture
(18:47) Starting his own firm
(25:01) Deep tech
(32:05) PsiQuantum
(43:34) What Karti is consuming to stay updated
(45:54) What Karti knows about investing now that he wishes he knew when he started
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