Harvard in Tech Spotlight: Kailash Sundaram, Investor at Detroit Venture Partners
I spoke with Kailash Sundaram, investor at Detroit Venture Partners, the VC arm of Dan Gilbert, founder of Quicken Loans and owner of the Cleveland Cavaliers. DVP’s investments include StockX, 100 Thieves, Finicity, Vroom, and Genius.
Kailash graduated from Harvard with a degree in Social Studies. Before DVP, he worked at Rose Park Advisors, a venture capital firm founded by the late Clayton Christensen, author of The Innovator’s Dilemma.
In our interview, Kailash shares his path to venture, what investing is like at Detroit Venture Partners and in middle America, and his advice to aspiring VCs.
What got you interested in tech in the first place?
A lot of kids grow up wanting to do exactly what their parents do. I was the exact opposite. My dad worked in tech. I wanted nothing to do with tech.
Sometimes, however, we travel long and hard to end up on the paths we once sought to avoid. A summer in DC opened my eyes to the partisan gridlock in Congress, and the power tech has to bring about rapid change. I was excited about building the future, and tech seemed to be the place to do it.
What led you to VC and Detroit Venture Partners? Detroit isn’t the most common landing place for Harvard grads.
My Junior year at Harvard, I helped co-found a startup with two friends aimed at democratizing the investment process. We saw a lot of great, early-stage startups on college campuses struggle to raise funding, and we wanted to create a “Common App” for investing. Companies could fill out one simple application, and connect with venture investors anywhere in the world. Venture investors could filter by deal type and criteria.
We built out a team of 20 students across college campuses and signed up numerous accelerators. I worked hard on the startup throughout my Junior year and gave up corporate opportunities to continue building the company over the summer. Ultimately, though, we realized the market was too small for our product — our customers simply wouldn’t pay enough.
I stepped back, and considered what I wanted to do next. Seeing a startup fail is a lot like seeing something you’ve poured your heart into go up into flames, and it took me a while to get my bearings. I didn’t want to pursue the traditional path in banking or consulting. I didn’t want to work at a large corporate firm either. I had the startup bug, and I wanted to stay around early-stage technology — the very technology that would play an important role in our future. And I wanted to do something different.
I had spent time in Detroit over the summer as part of a grant from the Harvard Club of Eastern Michigan to research the Detroit tech scene, and I was intrigued by the idea of moving to a deindustrialized city. Tech’s concentration on the coast seemed to be leaving millions of Americans behind, and I wanted to do my part in bridging the gap.
I decided to join Venture For America, a two-year fellowship founded by Andrew Yang aimed at revitalizing economically challenged American cities through entrepreneurship.
Through Venture For America, I connected with Detroit Venture Partners, a venture capital firm founded by Dan Gilbert, founder and Chairman of Quicken Loans. They were looking for someone to join their investment team, and I was lucky to be a good fit. I knew from the moment I met the team that I wanted to work with them — they were kind, sharp, had a great portfolio, and were committed to Detroit’s revitalization.
What does your day-to-day look like at DVP? What’s DVP’s investment strategy?
At DVP, we do a mix of things: early-stage investing, fund-of-fund investing, and spinning out our own companies. We make early-stage investments in startups in Detroit and startups we think are strategic to the larger Rock Family of Companies (which includes Quicken Loans, the Cleveland Cavaliers, and Bedrock). We make fund-of-fund investments in funds we think have access to proprietary deal flow or get first look at companies before others do. And we help start companies. Through this approach, we’ve backed great companies like Vroom, Bloomscape, and Finicity; invested in funds like Sequoia or Thrive Capital; and incubated companies like StockX, 100 Thieves, or Signal Advisors. It’s been cool to wear multiple hats — that of a venture capitalist, limited partner, and operator.
One of the best parts about working in Detroit is getting to be around a wide array of entrepreneurs with fascinating stories on a daily basis. Josh Luber, one of the co-founders of StockX, is a sneakerhead who previously co-founded three successful startups. On a normal day, you’ll see him wearing slides, a backward baseball hat, and a tracksuit. Justin Mast, the founder and CEO of Bloomscape, comes from five generations of greenhouse growers whose roots go back to the pioneers in the Netherlands’ horticulture industry. I’ve also had the chance to work with and interact with a home appraiser building an IoT company, a former NFL player building a data science startup, and the woman behind the largest black woman-owned US beverage manufacturer. The entrepreneurs in the city embody Detroit Hustle — and the story of the city itself is still being written.
What’s your advice to undergraduates looking to break into VC out of college?
I was lucky to break into VC out of college, and I can probably attribute that to two things: (1) prior startup experience, and (2) prior venture experience. Over my Senior Winter, I had the chance to intern at Rose Park Advisors, a venture capital firm founded by the late HBS Professor Clayton Christensen, author of The Innovator’s Dilemma and the man behind the disruptive innovation framework. I learned more than I probably learned in a course in college over the course of that internship, developed a thesis-driven approach to investing, and met some great mentors along the way.
My advice to someone looking to breaking into VC would be to (1) know “why,” (2) have something you can bring to the table, and (3) be optimistic and endlessly curious. On the first point, it’s actually more for you than for the partner you’re interviewing with. As someone once explained it to me, venture capital is one of the worst “Get Rich Quick” schemes. Returns on investment can take a while to arrive, and when they do, they’re often much smaller than you had hoped. If you’re doing venture to make money, you’re probably better off choosing more lucrative career opportunities. Early-Stage VC is best for people who genuinely enjoy being around startups and new technology — and are comfortable with failure.
Second, come armed with value you can add to the VC firm or its portfolio companies. That can be in the form of a thesis you’ve developed in a particular vertical, unique access to dealflow the firm may not already have access to, or experience building tech products — whether in engineering, sales, marketing, or product management. This can lead to some really interesting conversations and hopefully give firms a sense for your tech know-how and the way you think. Be someone founders and investors want to chat with.
The third point, being optimistic and endlessly curious, is probably the most important. Someone who I think embodies this well is Blake Robbins at Ludlow Ventures (also based in Detroit!). It’s easy to say “no” to companies in venture — it’s hard to say “yes” and believe they can change the landscape. Part of getting to that “yes” is being open to new ideas, seeking out insights, and always pushing yourself to understand new trends and the way the world is evolving — so you can spot the Next Big Thing, before it’s the next big thing.
