Solid founders and a strong team. It is also important to have flexibility and strong determination to succeed.
Offer a product or service that solves a real-life problem. It should address a real pain point or solve a major problem for the customer.
Strong fundraising plan or success already raising money from VCs.
As part of our series about “5 Things I Need To See Before Making A VC Investment”, I had the pleasure of interviewing Anis Uzzaman Ph.D., CEO & General Partner at Pegasus Tech Ventures. Anis oversees all management investments and operations at the firm. Located in Silicon Valley, Pegasus Tech Ventures has 1.5 bBillion dollars in assets under management and provides early stage to final round funding. Anis has invested in over 180 startups in the United States, Japan, South Asia, and Southeast Asia. Some of these companies include SpaceX, DoorDash, Robinhood, SoFi, 23andMe, Airbnb, Bird, and more. He is also the Chairman of the the Startup World Cup, an annual global startup pitch competition with 650+ regional events across the 6 continents leading up to continents and with a 1 million dollars investment prize.
Thank you so much for joining us in this interview series! Before we dig in, our readers would like to get to know you a bit. Can you please share with us the “backstory” behind what brought you to this specific career path?
Early in my career, I worked at well-known technology corporations including IBM and Cadence. During these experiences, I gained extensive knowledge about each company’s M&A practice since corporations often invest in and/or acquire startups. Working closely with these startups inspired me to become an entrepreneur myself in the venture capital industry. I founded my own firm in 2011, taking control of my own destiny and giving me the chance to have a hands-on impact on the success of entrepreneurs around the globe. Their creativity and passion to change the world keeps me inspired every day.
Is there a particular book that made a significant impact on you? Can you share a story or explain why it resonated with you so much?
Yes, a great example is The Lean Startup by Eric Ries. In this insightful book, he explains the concept of a scientific approach to creating and managing startups and get a desired product to customers’ hands faster with the famous Build- Measure- Learn feedback loop as quickly as possible. how to build a successful startup one step at a time. The book is both visionary and pragmatic, since it explains clearly how dedicated entrepreneurs can start their own companies based on best-of-class knowledge.
I’m also fascinated by the book Blitzscaling, written by LinkedIn’s Co-founder Reid Hoffman. It explains what you to do when you need to grow really very quickly. The book describes the science and art of rapidly building out a company to serve a large and usually global market, with the goal of becoming the first mover at scale. The book explains why it often makes sense to prioritize growth over efficiency.
It explains how startup founders can strategically expand their companies to become massively valuable. He shares smart techniques to offer a unique value proposition, scale-up quickly, and face the competition head-on.
Do you have a favorite “Life Lesson Quote”? Do you have a story about how that was relevant in your life or your work?
I’m a great admirer of former President Obama; his life and career serve as an inspiration. During his speeches, he doesn’t typically does not say many words, but he makes sure that each word carries a great deal of weight. Especially given the impact of COVID-19 and our currently divisive global community, this is one of my favorite Obama quotes:
“Hope is the bedrock of this nation; the belief that our destiny will not be written for us, but by us.”
Whether I’m speaking to our Pegasus employee team or giving a global keynote, I work hard to be concise yet share meaningful information. I have carried over this style to my day-to-day professional communications: Simple communications, being brief and precise.
How do you define “Leadership?” Can you explain what you mean or give an example?
Leadership means leading by example. A strong leader should be precise their communications and follow the same guidelines that he or she gives their team members. Communication is an opportunity — but also a potential barrier — since it determines whether your team and followers will go your direction or not. I believe in over communicating — but with limited, precise language.
How have you used your success to bring goodness to the world?
Thankfully, we work in a sector that deals with people’s lives. At Pegasus, we invest in startups around the world and those startups employee people. Those people, the Pegasus team, our corporate partners, and co-investors all depend on our ability to make smart decisions. Together with our portfolio companies, we increase employment and create innovative products and services that genuinely improve people’s lives.
Ok, thank you for that. Let’s now jump to the main part of our discussion. The United States is currently facing a very important self-reckoning about race, diversity, equality and inclusion. This is of course a huge topic. But briefly, can you share a few things that need to be done on a broader societal level to expand VC opportunities for women, minorities, and people of color?
Equal opportunity is critical in the VC industry. Even though it is a field dominated by men, we try to ignore the status quo and strive to offer equal opportunities for all. At Pegasus, about 40% of our team members are women — including in leadership positions.
And approximately 20% of our portfolio companies are startups founded by women. Taking the United States as example, CrunchBase reports that 40% of entrepreneurs are women — yet female founders secured less than 3% of total startup investment.
We have no opinion about what people look like or what their gender is. By investing around the world including Japan and Asia, we have great diversity in our team and in our portfolio — giving us a competitive edge. Taking a diversity approach to investing gives us the ability to sustain success despite the pandemic and challenging economic times.
Can you share a story with us about your most successful Angel or VC investment? What was its lesson?
We’ve experienced investment success across the globe, so it’s hard to name just one investment. Recent Pegasus success stories in the U.S. include Airbnb and DoorDash — both of whom led very successful IPOs. Pegasus achieved major M&A success including MindMeld (aAcquiredbought by Cisco) and Jetlore (aAcquiredbought by Paypal). After 8 years of our VC journey, we’ve had have 40 exit experiences with 12 major IPOs.
Can you share a story of an Angel or VC funding failure of yours? What was its lesson?
We invested close to 5 million dollars in Jibo, a social robot startup just before Google Home launched with similar tools. Jibo offered many useful applications including playing, singing, and dancing with the user. However, serious health issues of the CEO meant that the company was unable to raise any more capital. It also faced too much competition from Alexa, Google Home, and others. The company was unable to keep up with the business or raise more money; we lost our investment.
The lesson here is that we cannot guarantee anyone’s health. It’s critical to have a solid executive team to keep the company running, even if the CEO has to step aside.
We also learned to be cautious when investing in hardware startups. Manufacturing requires significant capital, is often a difficult process, and frequently takes place outside of the country. Making sure that a manufacturing-oriented startup raises money early on helps mitigate the risk.
Can you share a story with us about a problem that one of your portfolio companies encountered and how you helped to correct the problem? We’d love to hear the details and what its lesson was.
Yes, this story is about one of our portfolio companies in the IoT space. When the company started out, they hired quite a few seasoned “hotshot” people in Silicon Valley; experienced, but also expensive. The startup raised quite a bit of money and I served on the board.
However, the company was going through cash quickly and did not have enough revenue to support its burn rate. We recommended that the company cut back on senior people staff and mix them up to collaborate with junior level people — with the goal of accomplishing the same results. They listened to us and brought in a more diverse team, employees with less experience, and ultimately succeeded in lowering their burn rate. Taking decisive action made the company more successful and our investment more valuable.
Is there a company that you turned down, but now regret? Can you share the story? What lesson did you learn from that story?
One example is the startup MongoDB, a Y Combinator company. We met with the company and had the opportunity to become a seed investor. Although we did invest in Geniuuis, we did not invest in MongoDB. The startup was ultimately very successful and led a successful IPO.
Another company — Tokopedia in Indonesia, a unicorn — gave Pegasus the opportunity to invest in its Series A. Our partnership did not reach agreement about investing, so we missed out. Today Tokopedia is valued at 7 billion dollars.
Super. Here is the main question of this interview. What are your “5 things I need to see before making a VC investment” and why. Please share a story or example for each.
- Solid founders and a strong team. It is also important to have flexibility and strong determination to succeed.
- Offer a product or service that solves a real-life problem. It should address a real pain point or solve a major problem for the customer.
- Strong fundraising plan or success already raising money from VCs.
- Healthy traction in the marketplace: Including marketing (brand recognition), user traction (customer affinity), and financial traction (revenue).
- Strong IP position including genuine innovation and patents; and a solidn exit strategy in mind.
You are a person of enormous influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
The biggest challenge that potential entrepreneurs face is getting started. I recommend that everyone should found a startup and bring their creative ideas to the marketplace. This will bring an innovation revolution to our society and have a positive impact on the economy. Don’t keep your innovative ideas to yourself; expose them to the world and the global society will benefit.
We are very blessed that some of the biggest names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US whom you would love to have a private breakfast or lunch with, and why? He or she might see this. 🙂
At this point, I’d love to talk to Warren Buffet. At Pegasus we have created a unique business model, investing for corporations; and we are growing quickly. We’d love to share our concept with him and explore whether we can work together. Working together, we could work with Mr. Buffet to foster innovation around the world and help make global corporations more successful.
This was really meaningful! Thank you so much for your time.