“I think the real definition (of empathy) for me is just having a full understanding of the whole person.”
— Puneet Agarwal
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Keeping it ‘True’...
Today's guest is Puneet Agarwal, General Partner at True Ventures, a seed and Series A stage venture fund in San Francisco that is empowering extraordinary founders from all walks of life. The True VC team has invested in iconic companies such as Peloton, Duo, Blue Bottle, and Fit Bit, to name a few.
But logos hardly do justice to the depth of learning, coordination, and that community goes behind every single founder they partner with! In this interview, we get a comprehensive look into the psychology and experience behind one of True’s incredible General Partners, Puneet Agarwal.
Puneet’s insights come from a place of deep humility while providing an incredibly lateral view of all things that matter to founders and people in tech— fulfillment, leadership, empathy, and company-building.
“I think what I've said before, and I'll say, again, is that I think venture capital is a fundamentally human business.” — Puneet Agarwal
Highlights
Keeping it ‘True’ — VC as a human business.
Coming full circle on venture— starting a career in venture, leaving to be an operator, and returning.
360 vision on founders— a sophisticated use of empathy for evaluating, partnering, and investing in visionary founders.
Pushing the fold in early-stage VC— how can you successfully maximize risk at the earliest stages?
Cross-functional innovation— product, go-to-market, and business model!
“So, we're really looking for, you know, is this person able to navigate from an entry point and then find a bigger vision down the road that they can, again, also navigate?”
— Puneet Agarwal
Transcript
Puneet Agarwal
Thank you, I thank you both for having me. So yeah, so I, my name is Puneet Agarwal. I'm a General Partner at True Ventures. And I've been a partner there almost 12 years now. So from the beginning of our second fund, and we are now investing out of our six funds. So, it's been quite a journey there.
Before that I spent a bunch of time in the operating world, mostly on the product management side. So I was running a product at a mobile messaging company called Geodesic, which is actually based in India. So, I moved to India for a little bit and worked there, which was quite an experience with my wife. And then I was at a company called BA Systems. Before that I was at a startup called Crossworlds Software before that, mostly in product. So my career's been kind of a mix of operating and now mostly venture because I've been doing it for the last 12 years.
Jon Low
Wow, thanks. And you know, even before Puneet, even before you got intro Venture on a longer term cadence, you had exposure to it before you got deep into the operating world, correct? What was that, like? You know, going into venture like dipping your toes into venture and then going deep into ops and product, and then coming back?
Puneet Agarwal
Yeah, great. Great point. I forgot that part. So, thanks for reminding me, Jon. But yeah, no, I, I forgot to mention it. But no, it was an interesting, very, very interesting time. So, I had no idea what venture was back in 99. So it was like 99, 2002. So, it was the biggest boom ever at the time in venture. I joined a firm called Mayfield and that was because a mentor of mine who I've worked with for a long time brought me in. And I was I think 23/24. I had no idea what venture was— a lot of young people weren't even in venture at that time. To be honest, it was just a different game. The whole idea of having kind of associates or analysts was also fairly new at that time. So I was 23/24. I really didn't know what it was. I took a chance on it. It was a great experience.
It was interesting, because it was the complete boom period where you know, I remember at that time in 99, Mayfield did, I think a deal a week— they did 50 deals in 1999 itself. That was the first dawn of like billion dollar funds, which was crazy at that time. And then I saw the whole bust as well. So, I think it was 02 where the entire bottom dropped out of the internet. And I was kind of an observer there, I got to learn a lot . I probably packed 10 years of venture capital in a year and a half or two years because I saw the complete rise and the complete downfall. And just how you deal with companies that were going up and going down. And it was an interesting time because the Valley also completely like I mean, I remember at that time, it was the busiest craziest time you couldn't even go down 101 without getting in a traffic jam. And then suddenly in like, 02, the place was empty, like a lot of people left.
For me personally, though, just to answer your question, I felt that everybody has their own journey in terms of how they go in and out of venture. I went into venture very early on in my career. But for me personally, I felt like I wanted to go back and get more operating experience. And it wasn't sure if I wanted to come back to venture at that point. But I figured if I did that it would only help me become a better venture capitalist. So I had to go scratch that itch. I wasn't at a point in my life. I was too young in my life to say, venture was my career at that point. So that's why I went back into the operative word.
Jon Low
Wow. Yeah, that's such a unique insight. I am still trying to you know, like, fathom what a big share that is that you joined Mayfield you know, at the peak of his rise and fall in such a short period of time. And, you know, having had a really deep, operating experience in your career, you know, sometimes it's easy to then forget, “Oh, do I want to go back and if I want to go back. Why?” So, could you tell us a bit more about you know, what you liked about venture when you first got in? But then years later, right, what really got you back in? And why do you still stay doing what you do as a General Partner investing in early stage companies today?
Puneet Agarwal
Yeah, you know, what I really loved about it. So, I would say this is funny, but like the very first year of doing venture, I didn't even know what I was doing. To be honest. Like, you'd be like a year into it, I'd be like, what did I just do? Like, did I do anything?
So, it's interesting, it's a long term game, right? And especially as a junior person, it's not like you're necessarily proactively making investments or joining boards, or kind of supporting the partners who are already involved. And I just didn't know even what it was at all.
So the first thing I did was kind of learn what venture was and how it worked. But the exciting part was that every single day was completely different and unique, you know, you'd meet someone new, and to me, the entrepreneurs are the real heroes. No matter what they're doing, when they come in, they put themselves out on the line, they're going out, raising money, starting something, just meeting all those folks on a day to day basis was incredible, whether they were in the portfolio or outside of the portfolio.
And so every day was different, because everybody had a whole new set of businesses and your mind was just context switching all the time, you know, which was really, really different, which was really interesting. The interesting part was, you actually also didn't really have like deliverables, like in an operating world, here's my quarterly deliverables, here's what I got to get done. And venture doesn't really work that way. It's, you know, you may not make an investment over like a six month or a year period. There's no sort of quarterly moment, it's sort of years in the making before you see actual results of what you're doing.
I also really enjoy the partner interaction of just meeting some of the smartest people on the venture side of the table, and being able to interact and see how they think. But the variety was what was really interesting to me, just seeing startups at really early stages and growing to big stages, but seeing how they all did it in very different ways. And not just focusing on one, but focusing on many, and also many industries. And so, you know, what drew me back eventually was— when I went to the operating world, it's totally different, right? I had teams, I'd hire people, at times fire people, we'd build products, we had deliverables every quarter, you're very, very focused on your current, your company, that product that has to be delivered at that moment in time.
But I always had this notion of straddling the two worlds because I was in venture really early on, I was always like, wow, that was really, really fun. But to be totally honest, I wasn't sure like, “Am I qualified yet to do this?” Because I wanted to get more operating experience to feel like I could fill that out. Or just feel like complete. That was me personally.
And so I kind of straddled those two worlds for a while, and then eventually ended up back at True Ventures. And it just felt right. At that time. I don't know if it's because I was married and had a kid, the right team, just a whole period of time, I'd gone through a whole operating set, but I came back in. And I dove into venture fully and I haven't looked back.
Jon Low
So I have a question for you. Puneet. The True ethos is very, you know, invest very early, invest in founders. I'm curious, your personal take on that. I mean, you've bet on some fantastic, multibillion dollar breakout businesses, what is it that you personally look for in that earliest stage when there aren't necessarily product or market signals?
Puneet Agarwal
Yeah, no, you're totally right. Anyway, we get in super early. So, we actually say to ourselves, one of our core values or beliefs of True VC, is we want to maximize risk at the earliest stages, on product-market timing, we're pushing ourselves as a partnership to kind of, you know, really push the envelope. And so we look at individuals.
You know, oftentimes it's, it's, you know, there's a lot of factors that go into it, I think is, you know, the Why is super important. We always ask, why is someone actually doing this? What, what drove them? To this point? Why are they passionate about this particular space? So the Why is super important. I think the ability to storytell is really, really important. And when I say that, I mean, you know, I don't mean fluff and marketing, but more authenticity around the story.
Because at the end of the day, you have to be able to articulate your story not only to investors, but to customers to partners, to to an acquire one day, if you go public, you have to tell a story one day, but that story has to come from a place of authenticity and has to be very real, which goes back a little bit to the why. And then it's a lot around the persistence and the drive. It's less about background or school or any of that. It's more about like, what have you done?
What have you learned from your failures in the past, and what's going to drive you to actually continue to persist through this because it's never a straight line, as we all know, it's ups and downs, and it's crazy, but are you going to push through and try to build something pretty magical that will make a dent in the universe?
So, I know that sounds kind of hokey, but you know, really, we're looking for those kinds of just tells at any kind of meeting with an individual. So oftentimes, like, we can invest in a market that so when the markets are super, super important to us, but the market is really early, it's completely undefined. When we invest,if it's a mature market, it's probably too late for someone like true ventures. So, we're really looking for, you know, is this person able to navigate from an entry point and then find a bigger vision down the road that they can, again, also navigate? And so when ours, right, but we're looking for those kind of ingredients in an individual. But that's the ultimate, you know, piece, we do that at 4550 times a fund. And we also get it wrong a lot too.
Elias Rubel
Is there a specific, for example, in the portfolio of one of those early founders that you know, ultimately became a big success?
Puneet Agarwal
Yeah, I mean, you know, there were fun ones to talk about the big ones. I mean, the one that was obviously a big success for us was Duo Security, which was based out of Ann Arbor, Michigan, with an individual named two individuals, Dug Song and Jonathan Oberheide, who eventually sold their company for over $2 billion to Cisco.
But when we invested, it was them, and one other individual, they were in Ann Arbor, Michigan, it was, I think, 2010/2011, I can't remember. Most people in the Valley were saying you can't invest outside of the Bay Area. So, that was a very different time back then.
Also, you know, most of the venture funds were talking to them or telling them to move to the Bay Area, we were the only fund that actually flew out there to actually see them, which helped us win the deal in the first place. But, you know, Dug and Johnno were really impressive in first of all the depth of their domain. So they, they were, you know, deep in security and understood it.
But the other cool part about what they were doing was, they really wanted to focus on how to bring or create customer love for their product, which was actually pretty unique in security, they eventually the tagline for the company became the most loved company in security— that was legitimately their tagline. And that all came from the very beginning because their vision was like we need to simplify this for the masses. And that's exactly what they did. It wasn't about some new algorithm that was going to change the world that no one understood. They believe that, you know, there was a fundamental geopolitical problem. And we had to simplify security so that everybody could be ultimately safe in a whole new world, especially with the cloud.
And so that really resonated why that, you know, going back to the why, right, and they were so mission oriented, and they wanted to build a culture, a lasting culture where people would be proud to be, you know, alumni of duo, even if they left you and it still stands today.
It's the culture, there was one of the most amazing aspects of accounting, but that all started. We saw glimmers of all of that, in that very, very first meeting. And I remember going out there with a colleague of mine, we walked out of the meeting, it was in the Ann Arbor University of Michigan Computer Science Building because they didn't have an office. And we walked out we're like “We have to invest in these individuals.” We just have to do the other thing, too is one of our existing founders told us that Dug was essentially this was his words, a luminary in the field. I've never actually had another founder tell me that. You should meet a luminary, Dug's so humble.
By the way, he never called himself a luminary. But that definitely perked my ears up to another founder who I respected telling me that this person was amazing. Plus just their vision and their story and the why was really what captured it. And they built an incredible company, and it was just an honor to be a part of that journey.
Elias Rubel
Wow. So, next question for you is on the go to market side of things. Because I know you know, a lot of it is also making sure that these companies have the right resources around them and coaching from you guys to succeed. Is there any kind of success pattern that you've identified in the companies that you've invested in, that have become successful? Like, is there a certain motion that is common throughout?
Puneet Agarwal
On the go to market side specific? Yes. Yeah. It's a really, really good question. I do think that one of the key points is you have to innovate on product but you also have to innovate on the business model side. A lot of intrapreneurs forget that. They just talk about products. And then there's this like one little moment where they say, yeah, go to market, we'll figure that out. But you do truly have to figure out like, okay, is there a unique way to go attack the market?
I've always preferred at least since I've gotten into the game of venture, the venture game of the bottoms up kind of practitioner based model, I think it creates a tremendous amount of market share. For companies, it's a product-first, it creates a crowded product-centric culture, it creates tremendous modes, because people can build from the bottom up, and really create, you know, just a whole set of companies using the product from big to small, that are really interesting, and then allows you to really expand in unique ways.
It's just far more efficient than the classic enterprise model where you know, you, you get a very expensive enterprise rep, you go out, you know, the old days of playing golf and trying to sell a million dollar deal. And the problem is, you end up with these really crazy lumpy quarters, because inevitably, there's just no way to make it perfectly predictable.
Whereas, with a high velocity, insight driven product lead model, you just capture so much efficiency, and you get so much predictability. Now that said, I've invested in all kinds of models, because you can't just take one model and make it work for everybody.
So, for example, we were involved in a company called Hedvig, which sold for over $200 million, great founder of the national action to comm vault, they were in the software defined storage space, that was not a space where you know, you go in and someone would download your product, and then you get swipe a credit card, you know, this was, this was heavy duty storage. And so this required, you know, a sales force, you know, it was hand to hand combat closing big deals, but it's not for the faint of heart, I'll tell you that.
Like it's a really intense process, every deal, you know, you're working till the last minute of the quarter. So sometimes you have to, you know, you bet on an amazing technology. But the business model doesn't align well with his high velocity model. But when you can capture that high velocity model with a beautiful product like Duo, it's really magical, because it's like deals are closing while you sleep. I mean, I remember when DUo eventually sold to Cisco, I think we were closing like 300 deals a month. It was crazy. It was a machine. It was an absolute machine. So it's really powerful.
Jon Low
How did you navigate like, kind of the instinct to bring your product expertise onto the founder versus developing their product expertise itself?
Puneet Agarwal
Yeah, that's a really good question, Jon, because one of the most important things as an investor is kind of knowing when to be quiet, I think it's actually a learned skill. And VC is actually not to talk in a board meeting and knows when not to talk. And just actually listen, I think that does come to the product to some degree.
So, I've had to kind of work hard not to interfere honestly too much on that front, because the founders that we're funding, pretty much nine times out of 10, maybe even 10 times out of 10, our product founders, I mean, they are we're funding them because of their product instincts, and they're coming in and they got a vision they're developing a product that they think is amazing will change the world. And so you know, your instincts when you're an operator have been in the operating world is to come in and try to be an operator in the boardroom. And that's actually not really your role.
Your role is to ask constructive questions, the right questions to move the ball forward, be supportive, helpful, you know, manage during times of crisis, but not to sit there and like define a product roadmap. Now, at the same time, I've had a lot of founders ask me questions that involve me in those meetings. And I'm willing to provide my input. But at the end of the day, like, I'm not living this product every day, you know, they're the ones talking to customers every single day. They're the ones who are forming their own instincts around the product. So I really, really respect their intuition on that. And that's part of the trust relationship that you create when you invest in a company. So to answer your question, actually work really hard not to go really deep on a product and start providing a whole bunch of feedback that is going to take them down some rabbit hole. That's going to just make it harder for a founder, to be honest.
Jon Low
Yeah. Wow. Thanks for sharing that insight you need and one incredible discipline that must have been hard initially right?
Puneet Agarwal
Yeah. No, it's really hard. I mean, the more I found that the more you operate, sometimes the harder it is to adjust, to be seen as some people having an easy time doing it. But it becomes hard because your instinct is to go operate. Oh, I will fix it. It's like no, you're here. You know, you're not here all the time. You can't just go fix it like a helicopter in and go fix it.
Jon Low
Yeah, stay in your swim lane, right. And, you know, one of the things you know, you mentioned about question asking and being a good listener. And one of the things I'm aware of that is of high value to you is this skill set of emotional intelligence or empathy. I know you've talked about it quite a bit. And, you know, my experience is like, a lot of people have a slightly different definition for what that is. Right? We'd love to give you an opportunity to unpack why you see that emotional intelligence is important, and what specifically, that means to you in terms of behaviors?
Puneet Agarwal
Yeah, no, I mean, I've talked about this before, but I really think, you know, what we've done, that's especially true, especially Jon and Phil, who founded the firm, as we kind of built it at the core of True in terms of how we operate. And because we built it from an operational perspective, we can deliver that kind of empathy and emotional intelligence, it's just a better way we believe, to serve founders.
And I think it's super, super critical, if not maybe the most important thing to have that kind of empathy. And I think the real definition for me is just having a full understanding of the whole person. So, just getting beyond a transactional point of view, but really understanding the whole person, what makes that person tick, when that happens, when you understand, you know, the ups and downs, the things behind the scenes of an individual, you honestly can operate at a really incredible level, not only from a board to founder perspective, but even think about your own relationships at work.
I'm sure, when you have that kind of understanding of each other, you perform better at work, when you have that better understanding. At home, you're a better father, you're a better husband, you're better all these things, right?
I think what I've said before, and I'll say, again, is that I think venture capital is a fundamentally human business. And that it's not, you know, there are parts of the business leader stage, whatever, they're a little more transactional, but the very early stages, you're really trying to understand the person. And there's lots of questions that come up, like, you know, I'm having trouble with my co founder, like, how do I deal with that? I'm having this issue at home, I have, you know, I've contracted cancer, you know, what do I do now? Right?
Those aren't like business questions. Those are human questions. And yes, they affect the business ultimately, but you have to kind of tackle them. In that respect, as we said before, like businesses go up, down, and sideways. And the emotional toll is so intense on a founder, but not only that founder, but that person's family. And then all the other people in that company and all their family.
So, if you can get a full sense of all of that, and be empathetic toward that. It's really powerful. And it's not. I've also said this, it's not about just being purely supportive, support is huge. But it's also about being transparent and constructive. So it's not just being a cheerleader and saying, whatever you say, I'm going to do, I'm just going to give you money, and no, it's more like, okay, we're, here's the situation, let's all get a great sense of the situation, I want you to feel vulnerable enough that you can tell me what's going on. Because if you don't tell me I'll never be able to help you.
And then let's figure out how to solve this problem. And we'll be really transparent with each other about it. And so that's that's essentially what I mean. And I'll say it again, but you can bring fear and safety into a boardroom, one of those two emotions at a very high level. And what we try to bring in the boardroom at True is safety, so that people can be open and honest, and trust each other, and that we know will create great outcomes, ultimately, we've proven that.
Jon Low
So well said thanks for sharing that, Puneet, and couldn't agree more. Couldn't agree more. And, you know, the thing is, when people think of people in tech, or people working in tech, um, empathy, and EQ isn't probably the first key word that shows up. And yet yourself and your partners have made it core to the identity of true ventures. Was it just through life experience? Or is there actually a moment that brought you all together around that particular piece being so important to the success of an early stage venture firm?
Puneet Agarwal
Yeah, no, it's a great question. And thank you for recognizing that because that's true. I mean, that's, that's really at the heart of what we've done. I think it started when Jon Kelly and Phil Black started the firm where they put the founder really at the center of the firm. And then all of us who came on also share that philosophy and putting the founder at the center was unique at that time. And so, you know, that is really what brought us there.
Now, our set of experiences also brought us there. We had all been in venture in different places, we had all had operating roles. So, we had developed a kind of natural empathy for the pain of raising money, the pain of being an entrepreneur, we had lived as a firm like our partners, we started about 25 companies ourselves, you know, and so that's ingrained in us.
And it's also ingrained in us that the founder is our customer. So when the founders, our customer, how do we think about that? And how do we help them? How do we stay patient? How do we collaborate? You know? And how do we make sure that they can succeed throughout the lifetime of the company, right, so that that's all been part of our ethos, and it came from our past, honestly, through ups and downs, and things that we've seen. And then also, it just grew with us, in terms of the firm so we started seeing a community develop among the founders. And we started investing in that. And we realized that that was probably the most powerful thing that, you know, was the basis of True that this community could actually come together and be really honest and forthright with each other and help each other.
And once we saw that we're like, wow, like that, that's, that's where we need to double down. That needs to become kind of the core of what True is about and so it kind of built from there. And then everybody who became a part of the firm also just shared that ethos really naturally. Maybe that's just how our culture started. You know, every time we add a person, we think our culture grows and enhances.
And even our most recent hire, actually a woman named Madeline Saltzman, she came in as our VP of Culture. And we actually created a role for that. And she's the perfect person to do that, given her experience, and she's sort of figuring out how our companies can imbue the right values from the earliest stages. So, you know, it continues to evolve. But it's always been at the core of what we're doing.
Jon Low
Well, thanks for sharing that. Like, it's not common knowledge if you just read about it on a website, but I think you articulated it in a very effective and powerful way. And just because we're hitting up on time now, Puneet, you know, we could have you here talking forever, I'm sure.
You know, based on your deep experience in the venture ecosystem, tectonic shifts that you observed in markets right now, what do you aspire to bring more of to the ventures system in the future as True VC continues to grow, and it might not just be you, it might be something you aspire to be seen, right? And then other people kind of living through a scene through that legacy? What are some of those things you'd like to see more of in the venture ecosystem?
Puneet Agarwal
Yeah, I mean, it's a really good question. I think we sit at such an interesting point in such an interesting spot in the ecosystem, where, with relatively little dollars, although it seems like a lot when we're talking these billions of dollars, but relatively little compared to the overall ecosystem, we make such a huge impact, right?
If you look at, you know, the NASDAQ and companies that have gone public that have been venture backed and the impact that has made, it's super powerful. So, I go back to the impact piece, and I think that has to be, especially in today's day and age, we have to rethink what that means.
So what does it mean to actually be an impactful company? Is that, you know, hiring from a diversity and inclusion standpoint, and making sure there's a level playing field out there, there's a lot more work we can do to make that happen. And as an industry, we can do that, you know, it's, it's, it has such an impact and wide region impact, we can do that.
So, there's impact from that level, there's just impact to society, right? Like, there's some amazing companies that can start that will impact things like climate change and energy, you know, societal issues, you know, even when you think about enterprise software automation, but automation, not at the expense of maybe jobs in the future. I mean, like, there's, we are technologies in every single industry now.
And so I think what has to seep in our mind is the word impact in terms of impact on society, impact in terms of the people inside of those companies. And I do think, you know, going back to EQ, I think if that can become more of a centerpiece of how a lot of firms are built, that will also have a wide reaching impact. So, I think the industry has a lot of work to do.
I'm an optimist, I feel like we're moving in the right direction. And there's going to be a bumpy road, and people are asking the right questions, but I think the arc is sort of moving in that direction. And I, you know, personally True was designed so that it could be a multi generational hundred year or beyond firm, and we're trying to have an impact, you know, a deep impact beyond you know, even my time in the firm. And the next generations after that should be moving in my view in that direction, if that makes sense.