Investor Series: Yousuf Khan (Ridge Ventures) on the State of Early-Stage Software Investing
Introducing the A-Level Capital Podcast
About the A-Level Capital Podcast
This show is dedicated to having meaningful conversations with founders, builders, and investors on all things startups and venture capital. Our guests take us inside the world of innovation and entrepreneurship, sharing the stories behind scale and life lessons learned along the way. We cover lots of ground — from the latest industry trends that are shaping digital health and enterprise software to leadership principles for aspiring entrepreneurs. We also get lots of valuable career advice, especially geared toward students and young professionals interested in breaking into the world of venture and startups. You can find us on Spotify at A-Level Capital Podcast. New episodes will be released each week.
About our first guest, Yousuf Khan
This week, Jemina Opman-Auge and Anusha Rao speak with Yousuf Khan. Yousuf is a Partner at Ridge Ventures, a venture capital fund founded in 2007 that backs early-stage enterprise startups (portfolio companies including Fastly, Braze, and Discord). Before joining Ridge, Yousuf spent over a decade as an enterprise CIO. He was one of the early advisors of Zoom, and has been leveraging his operating experience to support early-stage founders well before he began his career in investing.
Yousuf is intimately familiar with all things software. In this episode, we get his take on the state of early-stage enterprise investing today, his advice for founders building during a downturn, and why he’s still optimistic about venture capital in 2023 despite a turbulent market. We also get lots of career and life advice — what it takes to become a venture capitalist, why he loves his job, and words of wisdom for young people early in their careers.
Episode show notes
- 01:34 Yousuf’s background as a CIO, experience as an advisor to Zoom, and journey into venture capital
- 03:47 Ridge Ventures thesis and why they believe B2B software is a trillion $ opportunity
- 05:17 Ridge portfolio, including Fastly and Braze
- 07:09 Why it’s a great time to build and invest early-stage despite turbulence in the market
- 09:58 Ridge investment cadence and valuation expectations given shifts in the market
- 11:18 Performance and resilience of portfolio companies in 2022
- 13:04 Challenges for B2B companies during a downturn, especially as it relates to customer qualification and retention
- 15:42 Business-building advice to remain resilient in turbulent markets
- 16:45 Yousuf’s takeaways from previous downturns and advice for builders
- 18:30 Why ‘nice to have’ vs. ‘need to have’ is not necessarily the right framework for B2B software, and the role of educating the market to create a place for new products in a company’s architecture
- 22:22 Advice to founders who are creating new categories and the importance of market messaging
- 24:08 Why Ridge led Theom’s Seed round, an early-stage startup (and A-Level portfolio co.) in the cloud-data security space
- 27:45 How Ridge builds strong relationships with its portfolio companies, and the difference between ‘founder-friendly’ vs. ‘founder-focused’
- 29:39 How Yousuf’s background as a former CIO positions him to give better advice to startup founders
- 31:52 Software trends that Yousuf is most excited about
Career development takeaways
- 35:63 Advice that Yousuf would give his college self: 1) understand how a business operates, and 2) think about whether you want to lead or follow
- 37:03 Advice for people going into VC: 1) understand that this is a long-term business, 2) love speaking to founders, 3) be intellectually curious
- 40:27 Questions to ask when joining an early-stage startup: 1) Is the startup solving an actual business problem?, 2) Do you believe in the vision of the company?, 3) Can I add value here?
- 42:59 Resources for people interested in learning more about B2B software: speak to founders and investors in the space, and don’t be afraid to reach out cold
- 45:10 Best piece of advice that Yousuf has ever received: “go where you are most needed” (i.e., go to a place where you’ll do the best work of your career). If you are passionate about something, success follows.
We hope that you enjoy this conversation with Yousuf! Stay tuned for another episode next week with Michelle Stephens, founder of Oath Care, on building a social digital health company for expectant and new parents. Oath is backed by investors including OMERS Ventures, XYZ Ventures, General Catalyst, and Eros Resmini, former CMO of Discord.
If you have questions about the episode or want to suggest topics for future episodes, please email Jemina Opman-Auge (jemina@alevelcapital.com) and Anusha Rao (anusha@alevelcapital.com). If you enjoyed the show, please consider subscribing to A-Level Capital Podcast on Spotify or Apple Podcasts. We’re also on LinkedIn @A-Level Capital .
