General Catalyst’s Taneja: We back startups even before they get traction.
With a portfolio boasting some of the biggest companies in tech, it’d be easy to rest on your laurels. But walking and talking with General Catalyst’s Hemant Taneja in their sunny San Francisco office, there’s no sign of complacency. From the partners taking pitch meetings to the communal table where the partners work (no personal offices here) to the top secret team being incubated in the back of the office, the place hums with energy and purpose.
That purpose? Find — or create — the next big thing and help entrepreneurs build companies that have a positive societal impact. 70% of General Catalyst’s investments are very early stage, often pre-revenue or even pre-company.
“We love putting together the right teams and projects,” explains Taneja. “Stage doesn’t matter. It’s all driven by ‘do we just get smitten by a particular founder or a founding team and just want to work on the problem they’re working on?’”
That’s a pretty exciting philosophy, and one that’s true to the firm’s name. Merriam-Webster defines catalyst as, “An agent that provokes or speeds significant change or action.” A case study from GC’s portfolio: Kayak, which was born in their offices. Another example: the secret work-in-progress in the corner. GC were early investors in Snap, Stripe, Jet.com, and Warby Parker, among others. Airbnb was Series C, and that’s about as late as they go. At later stages, GC will write checks of up to $100 million.
Investment themes include “a little bit of everything” and are split pretty evenly between consumer and enterprise. With 10 partners writing a total of 20–25 checks per year, and most checks in the range of $5-$20 million, the focus is on quality, not quantity.
“The common thread,” says Taneja, “is great founders. My lens is very much about folks that have a true sense of purpose around the problem they’re doing. Every great company has an authentic story like that behind them. And I really do look for that.”
“We will invest in companies pre-launch all the time,” continued Taneja. “The focus from an investment assessment perspective goes from the founder and their product insight to metrics and traction. But we will bet on great founders all day long, before they’ve actually gone to market. That’s frankly what I spend all my time looking for.”
“We’re 10 years into a 30 year transformation of the economy”
The reason that companies are being created, becoming successful, and scaling so fast is something Taneja calls “Economies of Unscale.” Says Taneja, “It’s the advantage that little companies have in being able to serve customers better and scale fast by renting scale that these platforms like AWS and Flextronics and others are able to provide. That has been a guiding principle behind my investments over the last few years.”
Watch the full interview between Hemant Taneja and Sean O’Sullivan of SOSV here.
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