13: Utsav Somani | iSeed
Founder at iSeed & Head of AngelList India | Spearheading India's Solo GP movement.
Ingredients for Success:
Shoot your shot. Utsav was only a few years into his journey as an angel investor. But after learning about AngelList and building conviction that it’s the solution for the Indian ecosystem, he put his best foot forward when reaching out to Naval Ravikant. Clarity of thought, a concise email, and a detailed presentation around why AngelList should look into India - a few of the things that led to Utsav’s stint as India Lead and eventually his own fund at iSeed.
Productize yourself. The idea of a solo investor is now normalized. Founders are now privy to the fact that sometimes, even a smaller check from a single investor can go a long way. With this, however, comes lower barriers to entry and a need to differentiate oneself. Utsav’s advice: be firm in your investment model, treat yourself as a product - ask yourself, why will founders want you on their cap table? - and spend time on the fringes of the internet, as it’s the only way to develop unique insights.
Go wide, then deep. It’s a strategy most commonly employed across sports. But come to think of it, that four-word strategy is applicable to one’s career, too. The general guidance goes: explore your interests, seek out challenging roles, but then, don’t be a generalist for too long… find something you love and become a master of your domain.
Utsav Somani’s decision making in his career is parallel to that approach. Today, he manages a successful investment firm, ‘iSeed’, while running AngelList’s India team (yes, nobody questions his ambition). But let’s rewind to 10 years ago, when Utsav was ‘going wide’.
Playing with Puzzles
In his first job at Bank of America, Utsav felt challenged and appreciated that he was around an ambitious group of people. A few months in – after the ‘honeymoon period’ ended – Utsav had the itch to engage in something more exciting. “I wanted to be a part of the internet and technology revolution – to get closer to talented minds that could enable me to create a bigger impact directly proportional to my interests.”
The next step – and Utsav’s foray into ‘going deep’, led him to explore angel investing. After realizing the steep learning curve involved in investing in early-stage companies, Utsav did all he could to get up to speed. He joined the Indian Angel Network, Mumbai Angels, and eventually, the Delhi chapter of LetsVenture. “All of the initial experiences I had were incredible stints for me to learn. Although I understood how to assess a company – from the founder to the addressable market – my biggest learning stems from the operational side of investing. The inefficiencies were prevalent every step of the way. The paperwork was never-ending, compliance was time-consuming, and access to the best companies was left for the known funds. I found that although capital was present, the reason the angel ecosystem wasn’t growing was because of the operational headaches and lack of access to exciting companies.”
Utsav’s intrinsic intellectual curiosity kicked in and he felt that there had to be a solution that could make angel investing more approachable of an asset class; after all: who wouldn’t want to ride the wave of tech innovation? Motivated to look for the right answer, Utsav’s focus turned to the world’s most developed investment ecosystem at the time: Silicon Valley. Within days, he stumbled upon AngelList.
“I was quickly blown away by the offering. It’s like two pieces of a puzzle fitting together – AngelList perfectly offered a solution to all the problems we were facing in India at the time.”
Growing the Pie
Utsav’s inquisitive nature didn’t allow him to stop there – he had the conviction that AngelList was the solution for the Indian investment ecosystem. Upon learning more about the platform and its founder, Naval Ravikant, Utsav decided to shoot his shot and reach out. “Like every other busy person out there, I knew that Naval probably receives 100’s of emails a week from someone asking for his time. Keeping that in mind, I put together a clear presentation of the current difficulties faced by angel investors in the country, why India was the ‘next big thing’ in the startup universe, and why AngelList was the fix that would enable founders to streamline their capital raising efforts.”
Perceived as a shot in the dark, Utsav was surprised when, in a matter of hours, Naval responded enthusiastically. His initiative and clarity of thought around the issue struck a chord with Naval, and soon, the ball got rolling. “I started as an advisor at AngelList in 2016 as we were still figuring out how to implement the solution from a regulatory standpoint. After working closely with the government, we were finally given the green light a year later, in 2017, and went to market with the product at the start of 2018.”
The launch was slated – in the minds of AngelList – to be an absolute game-changer for the Indian startup ecosystem. And it was, but it was going to take its time.
“We initially had 4 syndicates launched on the platform, which was underwhelming, so I knew we had to get to work. We called up prospective users and explained the offering – telling them, point by point, how AngelList was different; how they didn’t need to fill out the endless paperwork anymore.”
As time rolled by, the efforts eventually paid off; today, AngelList is the investment platform, enabling startups to raise capital from over 50 syndicate leads, with 1 investment being closed daily.
That Special Thing
As I rattled off the metrics for the platform’s traction in India, Utsav’s humble nature encouraged him to brush it aside; his way of insinuating that it’s not that big a deal. And he genuinely believes this – it’s clear that a lot of his purpose is linked to continuing to better the startup ecosystem. It’s no surprise then, that with time, Utsav began thinking of complementing his operational role at AngelList with a foray into becoming an investor. “I launched my own syndicate and with the initial 15-20 deals, I noticed that the IRRs were tracking well. The next gradual step for me then was to think bigger and launch my own fund. But at the time, the liquidity for the micro funds that we see today just wasn’t there. Even if I successfully raised, I knew that I needed to get creative and position myself uniquely to win access to the best deals.”
The notion of having a ‘value proposition’ as an individual is something that’s always been emphasized; the unique thing about you that must shine through in your work. It’s an exercise that might sound daunting, but the truth is, we all have distinctive elements that we can bring to the table. To Utsav, it was driven by the relationships he formed in Silicon Valley through scaling AngelList. “With help from Naval, I managed to become the ‘India guy’ for a lot of well-known folks in the Valley. iSeed, the fund I raised, is positioned as the bridge between India and Silicon Valley, given that we’re backed or advised by the likes of Sriram Krishnan, Sahil Lavingia, and Elad Gil, among others. We aim to be the most helpful cheque on the cap table and founders have recognized the value we bring through our connections.”
Riding Solo
Zooming out, the decision for Utsav to branch out and start his own fund is aligned with a larger, more impactful trend that is resonating across the world of venture capital. Just a decade ago, the perceived path to success in the early-stage investment business was to ‘earn your stripes’ by either rising through the ranks, from Analyst to Partner, or successfully exiting a startup, bringing the operational-knowhow to the Partnership. You had to have seen trends and reflected on patterns to have a say in the final investment decision. But as a function of the proliferation of capital, we’ve seen the venture asset class expand, and with this expansion comes new formats through which the asset class can be serviced.
Enter – the Solo GP. Where decisions are quick, an individual’s brand trumps that of the firm’s, and there is freedom to invest as one wishes. We’ve seen Harry Stebbings leverage his podcasting empire to launch ‘20VC’, or Packy McCormick tap into his ever-growing readership to form ‘Not Boring’. And as we’ve understood in this article, Utsav’s relationships and how he’s providing the direct bridge for Indian entrepreneurs to the Valley via iSeed.
With this trend, however, comes lower barriers to entry. I wanted to push Utsav on his thoughts here – how can one stand out when looking to strike out on their own as a solo investor? “In terms of positioning oneself, it would come down to three things. First, be firm in your investment model. Just because you are an individual investor doesn’t mean you have unlimited flexibility. It’s why I put together a Notion document on how I operate, the value I add, and my minimum ownership threshold. Second, productize yourself. Treat yourself as a living, breathing brand – why are people reminded of you? Be it thought leadership, podcasts, or even Twitter engagement. The way I think of iSeed: a single check from us brings you the brain power of Silicon Valley. Founders resonate with that. And lastly, bring conviction on unique insights. You don’t want to borrow conviction and invest when the large funds come in. You want to operate at the edges of the internet – spend time on Discord, create and engage with communities, strive to build a view using proprietary, early information. That’s really where the returns and reputation come from.”
It’s no surprise then, by operating within the three principles, Utsav has cemented his role as one of India’s marquee solo investors. He has the track record to show for it, being an early investor in the likes of CoinDCX, GoKwik, and Rattle, among many others. Looking ahead, Utsav remains positive on what’s to come for India.
“2021 was excellent for the ecosystem. Entrepreneurship has shifted from being perceived as a risky path to becoming a status symbol. This is going to increase the number of startups and lead to innovative, India-specific business models. I’m truly grateful to be in the position that I am. I get to learn from young, great minds every day.”
You can sense the excitement Utsav has for his work. From giving back to the ecosystem by bringing and scaling AngelList in India, to partnering closely with some of the best founders in the country, my sense is that he’s only just getting started. It’s still Day 1.
Disclaimer: Hummingbird Ventures is an LP in iSeed.