Thoughts on VC Investing from Nikhil Trivedi, Managing Director at Shasta
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Good afternoon wonderful readers,
I’m really glad to see that Princeton is undergoing an entrepreneurial transformation at the moment. You can just feel it by talking to students — especially freshman and sophomores — that they are eager to build new things. This transformation has long been in the works, and today I am extremely excited to present one of the people that spearheaded the movement, Nikhil Basu Trivedi, President Emeritus of the Princeton Entrepreneurship Club and current Managing Director at Shasta Ventures, an early-stage firm that has raised $1.7 billion since 2004. While at Princeton, Nikhil started Artsy, an online marketplace for the world’s art, that has subsequently went on to raise $50 million in VC funding. Below you will find Nikhil’s original takes on his career in venture and more!
Capital tends to get overallocated and underallocated across all sectors depending on “hype.” What are some consumer markets that you believe are currently overrated and underrated?
E-commerce is a sector that many VCs shy away from. I continue to think it’s underrated. 10% of retail spend today is online, 90% is offline. I have to believe spend will keep shifting online, and Amazon won’t be the only company to capitalize on that.
I think crypto will take a longer time to mature than a lot of others think it will. The reason is that the average person still doesn’t understand how the blockchain and cryptocurrencies work, and I’ve yet to see a company build an end-user experience that is simple and easy to use for the average person, that leverages underlying crypto technology. So I would say that space is still overrated.
Moving on to your career in venture, how would you contrast the tasks you performed as a junior investor at Insight with associates/analysts’ responsibilities nowadays?
When I started at Insight as an intern, my primary responsibility was to source companies to invest in. There are three main functions of a venture capitalist — sourcing, selection, and stewardship. I got a taste for sourcing and selection — making investment decisions — at Insight, but really didn’t get a sense for how to help companies once we’d invested in them.
Why did you decide to transition from Insight to Shasta?
I wanted to be more involved with companies post-investment, but I also realized I was just more interested in earlier stage investing. I felt like a smaller team would enable me to have more responsibility and learn faster. All those things drew me to Shasta, in addition to my sense that the people at Shasta would really invest in me and help me grow. I had gotten to know my partner at Shasta, Tod Francis, while I was still at Princeton, and we had built a relationship over a couple of years before Shasta gave me an offer to join the firm.
What are the most memorable projects and relationships you’ve undertaken and built at Shasta, and what were the driving forces behind your success in moving up to Managing Director?
I’ve been really lucky to get to meet and invest in some amazing entrepreneurs. That’s been the highlight of my time at Shasta. For example, ClassDojo was the first company where I was part of the investment decision and really got the chance to work with the business after we led the company’s Series A. Sam Chaudhary, ClassDojo’s founder and CEO, has become a very close friend — he even joined my bachelor party last year, before I got married!
My success in moving up the ranks at Shasta has been in part because of luck and timing. I have worked very hard to find companies for us to invest in, and to help them be successful. But I’ve also benefitted from the firm being willing to give me more responsibility than I probably deserve :)
What was the entrepreneurship scene at Princeton like when you were president of E-Club, and what were the most valuable lessons you learned while growing E-Club and Artsy while on campus?
When I started at Princeton in 2007, there were a few students interested in entrepreneurship, but the E-Club was dormant. So in my sophomore year, I got the club going again along with a few other students. That initial crew of E-Clubbers was really excited to start businesses. It was an awesome experience treating E-Club as our own entrepreneurial venture, and to get to know like-minded students at a deep level. I think the two main things I learned were 1) building a club can be a great training ground for building a startup, and 2) good things happen when you surround yourself with rockstars.
Artsy brought art transactions online and modernized the process. Seeing that most students have little to no experience in the art industry, how did you and your co-founder, Carter Cleveland, identify this market need initially?
Carter ’09 had the idea for Artsy. He saw a need for an online platform for all the world’s art — no one had built that yet, but platforms had been built for all the world’s video (e.g. Netflix, YouTube) and music (e.g. iTunes, Pandora). So we set about doing this for art.
A partner at NEA once told me that “NYC startups are primarily business-model innovations” and that he thinks the top companies will continue to come out of SF. For students interested in VC, would you recommend they intentionally seek careers in SF, or do you see places like NYC/LA/Austin producing top-tier startups as well?
I think we’ll see over the next decade that amazing businesses can be built anywhere in the world. That said, there’ll always be something special about Silicon Valley. The wealth of knowledge here on company building, from those who have seen it again and again, is unlike any other ecosystem. I think the most important thing to find in a career is the feeling of waking up every day excited to get to work. That can happen to you with the right ingredients in SF or NYC or Austin or anywhere, really.
That’s it for this article! Make sure to check out our other awesome interviews here: https://medium.com/profiles-in-entrepreneurship
You can follow Nikhil on Twitter here.
And me here :)
