Office Hour with Anu Hariharan, Partner at Y Combinator’s Continuity Fund
Anu Hariharan is a Partner at Y Combinator’s Continuity fund where she focuses on funding growth stage founders. At YC, she has led investments in Boom, Instacart, Convoy, Brex and Gusto. Before joining YC, Anu was a partner at Andreessen Horowitz, where she focused on consumer internet growth investments. Prior to Andreessen Horowitz, Anu was a Principal at The Boston Consulting Group’s Private Equity practice.
Anu started her career as a senior software engineer at Qualcomm and holds a MS in Electrical Engineering (specialized in wireless communication) from Virginia Tech and MBA from The Wharton School. Passionate about global technology, particularly in the US, China and India, Anu has done extensive work with companies who are interested in network effects and growth programs.
These are the highlights of her AMA on Elpha, where women in tech talk candidly online. You can check out the entirety of the conversation on Elpha.
Q: Is there a ranking between the personality archetype of the founder, business model, growth, market size, etc.? How would those be evaluated when fundraising?
Anu: Building a great company is a lot of hard work and a lot of things have to go right. Therefore we look at a bunch of dimensions during diligence especially at the growth stage. However if I had to break down the top 3 to 4 items it would be the following:
1) Team
2) Market Opportunity
3) Demonstrated product market fit and raising money for scale
Even though we look at a bunch of data and do market/competitive intelligence to assess what the potential for the company is in 3 to 5 years, at the end of the day it still comes down to the founding team. Founders make all the difference in how a company scales and how they build a team. Therefore we especially look at how good the CEO is in attracting top talent to the company and spend time with the senior leadership team as well.
The best way to get the attention of a VC is to do their job — find amazing founders, come up with your own thesis on why you would invest in them and source it for the VC.
Q: What is the best way to transition from full-time engineering to VC?
Anu: I don’t know if there is one formula for that. I never aspired to be a VC. I would say this though — the best way to get the attention of a VC is to do their job — find amazing founders, come up with your own thesis on why you would invest in them and source it for the VC. Then you know whether you would like doing this job and you will also get a VC’s attention.
When I had reached out to Jeff Jordan at a16z, I was preparing for another interview in New York and they wanted me to pitch 3 companies in the Series B stage. I did a bunch of research on my own and picked Instacart, GetYourGuide and MakeSpace. Why those 3? I believed in the offline to online trend. I was way more bullish on groceries going online than any investor in the US at the time. Apoorva (CEO of Instacart is a Qualcomm alum), GetYourGuide founders were BCG alums and MakeSpace founder was down the road from where I lived in NY.
Believe it or not, all 3 responded to my emails, debated my thinking on the pros and cons of why someone would invest in them. I had reached out to Jeff at a16z (also a BCG alum and I could find his email id, because he wrote a blog post saying department stores are dead and he thought groceries wouldn’t move online as fast. Given one of my pitches was Instacart I wanted to understand his contrarian view. In the end I just sent him the deck I put together as an FYI — (It so happened that he was working on an Instacart diligence at the time and knew the two other companies in my deck). He asked me to fly to SF the next week!
Q: Who are the VC-funded growth-stage female founders who are the most impressive to you on the scene today. What makes them stand out?
Anu: Several of them. Four that come to mind are Tracy (PlanGrid), Mathilde (Front), Reshma (Ginkgo Bioworks) and Sarah (Lever).
Short list the 4 to 5 investors you really want to work with or get to know and hunt them down. Have good points on why you want them and only them to take a look at what you are doing.
Q: What’s your approach to juggling motherhood with a high intensity job?
Anu: It is tough and you have to juggle a lot but it can be done. I think the three most important things for this to work are the following:
1) An awesome team at work
2) Phenomenal partner and a great team at home
3) Ruthless prioritization
I was pregnant at a16z with our first child and pregnant at YC with our second child. On team — it is extremely important that you have a great relationship with your peers. At YC, I know I can call on any Partner for help to step in for me.
Second, Sheryl Sandberg is absolutely right when she said “who you marry is the most important career decision of your life”. My husband and I both have busy and intense jobs but I know I can rely on him to get stuff done when I am busy. More importantly he is my biggest source of strength when I am down or stressed.
He can motivate me unlike anyone else and cheer me up when I need it most. The rest of the team matters too. By team, I mean friends, nannies and grand parents. It takes a village to raise a child and the stronger the village the more you can juggle.
Lastly, ruthless prioritization — this is the hardest one but really important one to do. The FOMO element is so strong that you think two to three times before you say no. However with time it has become a lot easier for me to say “no” to many things.
Q: How does one get a warm intro to a VC or Angel investor in Silicon Valley?
Anu: Warm intros are hard. Short list the 4 to 5 investors you really want to work with or get to know and hunt them down. Have good points on why you want them and only them to take a look at what you are doing.
Get them to use the product and see if they are willing to give feedback. I remember the ShareChat founders in India hunted me down 4 years ago in front of my office. I was about to leave for home and was surprised to see them. They said they wanted only 2 mins as I walked to the door of my car. In those 2 mins, I was quite impressed with their hustle (they had come all the way from Kharagpur in India and I had no idea who they were).
We hadn’t even exchanged emails. All he wanted was feedback based on the network effects post I had written. They even had 2 or 3 specific questions. I remember walking back into the office with them so that I could spend more time. Today the company is doing extremely well but the early days are not easy for anyone.
Q: How did you know you were interested in VC? How did you transition from engineer to investor?
Anu: I didn’t know I was interested in investing until I joined the Private Equity practice at BCG. During my business school at Wharton, I had heard a lot about VC and PE but I was least interested in both of them. I joined BCG in 2009 and most of the projects were focused on cutting costs. While extremely important for many of the companies, I found it somewhat boring.
Prior to BCG I was a senior software engineer at Qualcomm focused on building video streaming and video telephony on 3G handsets. That was quite different from “cost cutting” projects. So I was looking to do something different and one of my mentors at BCG suggested that I explore doing private equity due diligences — it was one way to learn to dive deep into several different businesses across industries.
They were also short projects (3 to 4 weeks long although frankly 80 to 100 hours worth of work on a weekly basis). I was nervous on my first project (which was to analyze the US loan mortgage book and determine the propensity to default). However I loved it so much since I learned a ton from it that I ended up staying in the same practice for 4 years.
Q: What is necessary to mention in the short pitch about your startup to catch an investor attention?
Anu: 1) Huge market opportunity 2) Early signs of product market fit (why customers love you). 3) Team — why YOU are the team to go do this
At the end of the day if you want to start something, work on something that solves your own pain point.
Q: What are some technology / industry trends that you’re observing as an investor, that might not be obvious to the layperson? Put another way, what emerging industries would you advise people look into for starting companies or joining them?
Anu: At YC we receive thousands of applications that it is really hard to pin point one trend. There are multiple trends and I think tech is increasingly changing every industry. At the end of the day if you want to start something, work on something that solves your own pain point. If you are looking to work at another startup, first see if you believe in their mission and want to be a part of it. Second figure out if thats the team you want to be with to go build it. The rest will follow.
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