Making An Addition To My Twitter Bio: “Investor”

If you follow this blog, Haywire, you may have noticed I’ve been writing a lot more recently, and also talking more about investing. It may seem out of character for me to talk about personal investing, but this is going to be the new normal — I even changed my Twitter bio to reflect the new era. The news I wanted to share with you all is that, at the beginning of 2013, I finally began a journey investing in early-stage companies with some small but very fun steps. Specifically, I’m investing in early-stage startups, starting at the seed round up to the Series A, and oftentimes in between. If you are thinking about starting a company and/or have an early-stage startup and you’re focused on marketplaces, or bridging online-to-offline, or working in enterprise and/or cloud infrastructure, or working on any part of the mobile stack (servers to apps), please find a way to get in touch with me (see below).

I have been quiet about my investing activities because I wanted to have something to show before talking about it. There are too many carts around here, and so many of them are put before the horses. This is also important to me on a personal level. As some of you may know, when I moved to the Valley about three years ago now, I slowly began to explore an interest in investing, a roughly 12-month journey in which I got to meet scores of great investors and had interviews with some great firms, many of which I remain friendly with and some of them have actually become mentors to me and even friends on a personal level. It was a hard experience to go through, if I’m being honest, to strike out with so many VC firms, again and again hearing “no,” but now with the benefit of hindsight, I wasn’t ready for the world of larger institutional investing (though I thought I’d be good at it), and for whatever reason, life has guided me down this slightly different path where I finally had the opportunity to start writing my own checks and working with a variety of talented founders 1:1. If I hadn’t been through that gauntlet and maze of interviewing with all of those firms, perhaps I wouldn’t have decided to climb this particular hill. I’m grateful to have the chance.

I call the fund “Haystack.” More details are below. Oh, and of course, I almost forgot…follow me on AngelList here.

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Investments To Date: DeveloperAuction, Paddle8, Instacart, Hashicorp, Exitround, HelloSign/Fax, Gyft, Vnera.

Investment Pace: I’m averaging about one investment per month, but the average is not indicative of the bumpiness in schedules.

Investment Amount: I typically invest $25,000, but if needed, can invest up to $100,000. The size of the fund and investment sizes are intentionally small, for many reasons I’ll explain over time.

Investment Fund Structure: I raised a modest-sized fund from friends, former colleagues, and individuals — no institutions, for now. Beyond covering legally required formation and accounting costs, I do not earn a fee from this fund, but I do have carry. I am the sole General Partner in the fund, Haystack.

Investment Fund Goals: To learn by doing and helping those around me.

Investment Fund Thesis: I raised the fund without a thesis. Rather, I was trying to run an experiment (which I’ll write more about at a later time). Only recently have I begun to think thematically, and I’ll write at length what these are, but briefly, what I’m focusing on now are the following areas: (1) Marketplaces; (2) Bridging Online To Offline; (3) Infrastructure, Enterprise & Cloud; and (4) the intersection of these areas with Mobile Computing, though I may go broader within mobile. (Separately, I also believe the U.S. economy has undergone a massive structural change that creates a new normal as well as new opportunities for new products and business.)

Investment Promises: I tell any founder that I approach about investment that I won’t oversell my value-add or participation, because in part, I’m selecting them because I believe they fundamentally don’t need me, yet will of course be available for any request. I believe investing is a services business, and I feel well-suited and well-trained for that dimension. Rather than talk about what I can do, I simply refer founders to current colleagues and other investments. My goal is to build a track record based on 1:1 references, not marketing or self-promotion.

Investment Pitches: I do not like to be pitched. It’s nothing personal, but it’s just hard for my brain to form context around something new unless I can prepare for it. Instead, I prefer to meet new people through other people that I know (meaning, please try to get a warm introduction to me), or, by getting to know them through using Disqus on my blog. I blog a lot and many folks who have been active in using Disqus here are folks that I’ve met in real life, talked to on the phone half a world away, and have become friends with. That’s a good place to get my attention, Disqus on my blog, or AngelList if done properly. A bad place to get my attention is email, Facebook, or Twitter.

Investment Unknowns: I don’t know how good I’ll be, or how founders will consider working with me, or if people will want me to participate in their rounds, and a host of other considerations. That’s why this first fund is modest and experimental in nature. This size affords me a level of nimbleness. I will be using AngelList, for instance, maybe a little bit as a source but mainly as a syndicate. I’m excited about AngelList. I won’t be attending Demo Days, but I will speak at them if invited.

Investment Motivation: There are countless folks to thank, but I want to highlight two close friends, Gautam Gupta (co-founder of NatureBox) and Nakul Mandan (an investor at Battery Ventures) for pulling me aside and convincing me to go down this path over many beers and coffees. It was their idea and I’m not sure I would’ve done it without their genuine encouragement.

Investment Fund Logo: For whatever reason, logos are all the rage these days! Here’s the one for Haystack ;-)

Haywire Logo New

Haywire is written by Semil Shah, and is published under a Creative Commons BY-NC-SA license. Copyright © 2014 Semil Shah.

“I write this not for the many, but for you; each of us is enough of an audience for the other.”— Epicurus