“I came to this country very poor, I had no money, and it’s the socioeconomic construct of this country that allowed me an opportunity to succeed…” — Ullas Naik

Today’s guest is Ullas Naik, Founder and General Partner at Streamlined Ventures. His notable investments include; Addepar, DoorDash, Rappi, and FLYR, for example.

Ullas has been an investor for over 23 years with 400 companies worth of investment experience. He has steadily weathered the ups and downs of markets, and more importantly, been a steady, guiding hand to portfolio founders.

Beyond just professional titles, Ullas is an authentic, humble, dedicated human being. He migrated from India (Mumbai) to the US with limited capital, networks, and western knowledge. Through the merit of his efforts, he achieved great personal and professional success.

In this video interview, we cover many aspects of Ullas personal and professional journey:

The core traits and values he sees in successful founders and emerging fund managers for that matter.
Migrating to a foreign country and securing his first job on Wall Street with limited english and experience.
Helping founders during economically challenging situations.
Managing investor relationships.
Mentoring and succession planning.

We believe his story and takeaways are inspirational— enjoy!

Transcription

Arjun Arora (Valence) 0:53

Hi, everyone. My name is Arjun Arora. I'm the Founder and Managing Partner of valence advisory. We support funds and founders with accelerating their efforts through strategy, capital, and people.

Jon Low (Valence) 1:06

Hey, thank you, Arjun. Jon Low here. I'm an advisor at valence advisory. I collaborate with Arjun, I am the lead on leadership coaching and communications. And today we have a wonderful guest, Ullas Naik. He's a venture capitalist and founder of Streamline Ventures. We're going to dive a bit more into his professional and personal story.

Ullas Naik (Streamlined Ventures) 1:43

Well, hello, everybody. I am the founder of Streamlined Ventures. We're a seed stage venture capital firm that's been around for about nine years at this point. We've invested in about 130 companies to date. This is my third venture firm that I'm building— this one I started by myself. But prior to that, I also helped build a firm called globe span capital and another firm called Kota Capital, where I was a founder, but my other founders are building that firm, my other partners building that firm, and, and I've have investment experience now across about 400 companies at this point in time, over the last 23 years of investing. So, I consider myself to be a pretty steady hand, having seen lots of ups and downs. Especially in today's environment, when we're seeing a lot of downs, providing that kind of steady guidance to our founders.

Jon Low 2:40

Thank you. And just because it's contextual in light of recent mass events, what is some of that sound advice or guidance you're providing founders in light of covert and the pandemic and why is that different? Is it case by case or do you see a pattern?

Ullas Naik 3:12

Yeah, it varies by state. sector in stage. So you know, but at the very high level, the general rule of thumb is to try to have our companies have 12 months of gross burn runway at a minimum. In most companies cases, we're trying to push them to 18 months of gross runway, and I think so far we've done this work over the last three weeks across our portfolio and I'd say 90 to 95% of the companies that we're involved with are in that mode of having minimum 12 months of runway, which I feel very, very happy about.

Now, there's a lot of different tactics that one can employ. There are some companies where we are not concerned at all about the burn aspect of it because they are in sectors that are actually because of this environment growing really well. So sectors like healthcare, ecommerce, gaming, delivery, are doing exceptionally well in this environment.

Companies that are aimed at large enterprise sales or SMB Sales are seeing much more elongated sales cycles. And so there with companies like that we are a lot more, there's a lot more scrutiny around what that gross burn looks like. And how does one find a way to get to at least 12 months of runway until we start to see some of those sales cycles start to shrink. So that's so again, like I said, it depends on the sector, it depends on the stage. But the enterprise oriented companies are probably the ones that are going to get more hit in this environment.

Jon Low 4:31

Thank you. I don't know if you're on a remote working model before these recent events, but how have you if you have navigated becoming 100% remote?

Ullas Naik 4:49

We have an office in San Francisco, we have an office in Palo Alto, and we were all working from the office in San Francisco. And about three weeks ago, we went to a remote format. So we started to feel that, you know, the situation was starting to become a little untenable and social isolation was that that was being employed in other places was probably the right call.

Then of course, the State of California also instituted those restrictions about a week later. So we've been on it for a while, which is, you know, interesting and tricky,but I think we're managing to get through it just fine.We have daily stand ups, and then we still have our team meetings that are, you know, three hours long and everything is done over video.

Jon Low 5:37

Great, thanks. That's wonderful and, and I was gonna also ask, just even even obviously, as a steward of capital, you've seen through, you've seen multiple, you've been through multiple recessions, ups and downs. And you've been in the game arguably, forever. Since you graduated. What is it that keeps you in the game? What do you enjoy the most about being a steward of capital yourself?

Ullas Naik 6:15

Yeah. So for me, you know, supporting founders is a very, very big piece of why I keep doing this. I've been doing it for, as I said, for 23 years. And we've had lots of our fair share of successes and failures. And we've had big successes as well. But I almost don't care about the successes. At this point. You know, the winds don't matter as much as the journey matters to me. And what really matters is to be this, this resource to help founders build their businesses.

For me, I came to this country very poor, I had no money and it's the socioeconomic construct of this country that allowed me an opportunity to succeed and make it and I feel that you know, philosophically. I live and read every single day to help this country in the socio economic structure continue to proliferate. And to me, founders are the lifeblood of that system. And so every day I wake up to find a way to help them. And these could be founders in our portfolio who I helped the most, but also founders are not. Personally I've always taken calls from people, you know, if they're going through or facing a specific issue or something to sort of give them specific solutions based on my 23 years of experience and 400 companies worth of investment experience.

Jon Low 7:37

Great, thank you. And I'd love to unpack that a bit as well lists because, you know, there's a lot of people who are using the terminology in the ecosystem ‘founder centricity’ or being founder centric. I would like to unpack that a bit with you. What specific behaviors as an investor and as a steward of capital, do you think are commensurate with founder centricity?

Ullas Naik 8:11

You know, I, so for me, it's like it comes down to resiliency, integrity, intelligence. Those are the three things that I think are one of the key traits of founders who end up really changing the world that they want to change. Right. And, you know, different founders take on different challenges for different reasons. But I think those three traits invariably end up, end up creating successful outcomes for those founders and allow them to get through really difficult times or have the right mindset in good times. And so I think I think resiliency, integrity, and intelligence, I think sort of eventually end up being the consistent thematic thing across all the successful founders.

The founders that have found sometimes who have not succeeded? Sometimes not always, but who have not succeeded are those that do not, in the hard times perhaps have the ability to sort of pivot fast or, or have the resiliency to sort of go and you know, get financing in some creative manner as possible.

We are currently dealing with one of our companies where they had documents signed by an investor a week and a half ago, and the wire never showed up. And that's partly because they were just like, okay, we're kind of pulling back from everything. And the founder of this company had so much resiliency that he hounded those investors and brought them back to the table. We had to create a slight sweetener to get them involved. But because of that, it's that sad resiliency and that that that again, intelligence meaning the creativity with which he approached it, that allowed the company to get the wire we actually got the wire today, which is our, you know, feeling very happy about but it's still gratulations that are that are critical.

Jon Low 10:04

That's really helpful. Thank you. My understanding, I'm not a venture capitalist myself, but arguably you manage a two-sided marketplace between founders and LPs, right? Other people's capital. How have you built it into your mandate or your practice or your professional discipline, to get that right so that when times are tough, you are best equipped to respond quickly to your founding portfolio members, and to provide support in the most frictionless way possible?

Ullas Naik 10:41

Yeah, I think communication becomes extremely important in difficult times, right, which means that we need to be our, our, our bread is buttered by our LPs. It's their capital that we're managing. We're the stewards of their capital. So, they put us in business so we have to make sure we're communicating them with them regularly, transparently. In terms of what we're doing on behalf of them, for our portfolio companies, and then you got to work extremely hard with a portfolio company.

So as I mentioned in the last three weeks, I've literally been on conference calls morning tonight with our entire portfolio on contingency planning, and trying to figure out ways by which we get to a minimum 12 months of runway, right? So that way, what I'm doing is I'm dispatching my duty as a steward of capital towards my LPs. And at the same time, I'm also honoring my philosophical pursuit of helping founders are our founders and just other founders to make sure that they succeed and then eventually thrive.

Jon Low 11:39

Well, amazing, that's an intense workload. Thanks for sharing that. And also because you work in a team and you have up and coming talent in Streamlined VC—what measures have you taken personally to transfer your experience and your process to the next generation of stewards of capital?

Ullas Naik (Streamlined Ventures) 12:08

Yeah it’s a good question. And it's something that I'm certainly keen on and passionate about. So, one of our team members who's on our investment team sort of sits in with me on all of these planning sessions, right. So what she is getting the benefit of is all the learnings from my 23 years of experience having gone through ups and downs, and to see sort of how in times of difficulty one, one sort of helps these founders adapt the business model in order to again survive to thrive, right. So if you survive you thrive. That's really the play.

And so I think she's, she's getting the benefit of that. She's also getting the benefit of seeing how we have adapted our investment base. So we've slowed down our investment base. We're not heading for the hills by any means. We're sitting on cash, which is a good thing because I believe there's going to be, again being stewards of our LPs capital, there's going to be some really interesting buying opportunities for us sometime in the next three months within the next three months. And so we are constantly still meeting with companies, because at some point, the right thing is going to come at the right price with the right founders. And we're going to want to invest in that company.

So we're, you know, we're open for business, we're slowing down, we're slow, for sure, compared to our historical pace. We'll be slow for I think, the next month or two for sure. and thereafter, you know, we're going to sort of start to activate more. The other piece of this also is that it's a function of bandwidth, because we're spending so much time trying to just get our portfolio companies going and we don't have as much capacity to look at new opportunities just yet. But Nicky sits in for us on all of these meetings. So she's getting the benefit of seeing how this playbook is enacted.

Jon Low 13:52

Great. And to clarify, slow in the sense of speed to conviction, or, slower as in if you are disciplined to an X number of investments per year?

Ullas Naik (Streamlined Ventures) 14:13

A little bit of both? I think, Okay. I think our decision making pace has slowed a little bit. In the past, we would, you know, including all our diligence, we make a decision within, sometimes depending on the type of company, we could make a decision in a week to three weeks.

Right now, it's elongated beyond that, because there's no real incentive to invest in companies not until you have a really solid understanding of what the sales cycles are going to look like over the next three quarters, right. So until we have there's a bit of a fog right now around what those sales cycles might look like. So unless you have conviction on that, how we're going to get through that fog, we will probably be a little bit slower. But in terms of getting to a decision, it will also be slower in terms of the number of investments we'll make in that period. And I think that I see that persisting somewhere somewhere in the next three months thereafter, we'll reevaluate.

Jon Low 15:14

Great, thank you. Thank you. Awesome. That's really helpful. And I think I'm gonna switch gears now, because we've been talking a lot in venture space. But we also want to respect that, you know, venture capitalists, investors, they human beings to with their own journeys, and one of the things you mentioned, was very inspiring, was that you grew up in Mumbai.

And there was an ethos around innovation and the states and entrepreneurs that really inspired you and something that you wanted to contribute and support throughout your life. What was that like? You literally shifted cultures. How did you get yourself off the ground? And what were some of the key challenges or learnings you had that really helped accelerate that?

Ullas Naik 16:20

You know, I think it's hard to tell. But, but I think the traits that I mentioned about founders is something that I sort of have taken to heart and had always taken the heart around, you know, integrity, and resiliency, and intelligence, meaning the ability to sort of assess a situation and pivot as necessary.

I think those things have kind of been ingrained in me from since my younger days, because we just have to sort of make do with very little to get to the point where we were doing okay in life. And, and so when I came to this country, I mean, for instance, I had a really thick Indian accent, right? And when I landed at JFK for the first time, that guy at immigration couldn't fully understand what I was saying. And so immediately, I had to like, okay, this has got to go, I've got to figure out if I'm going to make it in this country, I'm going to do something about it. So I would watch newscasters relentlessly. I would repeat what they were saying. And I would adapt my tongue to sort of get that accent. So things like that I started to do.

I also started to learn about technology. I was an organic chemist in India at a chemical trading business out of college. And I had to learn tech. And so I started to do that as well. To get my first job, I called a firm on Wall Street. And I called the trading desk of a Wall Street firm, a small Wall Street firm, 40 times four days, 40 days, until they finally took a meeting with me. And then I told him just hire me as a temp doesn't matter. And they hired me as a temp and then two years later, you know, I was generating a meaningful portion of the revenue of the firm and so I think it, you know that that goes back to resiliency and all that. And it came from a variety of different places it came from, you know, hunger, desperation, and drive. It's like all of these things sort of came together.

And because of that, you know, and eventually sort of it all, it all proliferated into what my life has turned into. But I don't think even if I brought all of that to bear, perhaps in the India of the 19, early 1990s, I don't think I would have gotten as far as I have managed to get in the United States. And I think that's thanks to the socioeconomic structure that, you know, capitalism at its epitome is in this country. And without that structure, I don't think I would have had the opportunity to sort of grow as much I did.

Jon Low 18:43

Well, sad. Well, sad. And also you mentioned, you know, a lot of what you do a lot of your success was driven by necessity, right. As you accumulated more and more success, you know, professionally and personally, was there a point in where we necessity was taken care of. Was there a point where you had to spend some time thinking, well, what drives me now?

Ullas Naik 19:18

Yeah, it's very interesting, because of the inherent programming around desperation, that set me on a path for and that lasted even after I had success, probably 10 years after that, because I could not dissociate and disconnect and say, Okay, I can actually pause now I can take a breath, and think about broader implications. And then, and because, you know, in a way, once people are launched in a direction, there's inertia associated with that movement.

And so I wasn't an inertial state where I just kept going and I would move just as fast operate from a place of seeming desperation even though it wouldn't make sense it was it was discordant with my state, my current state at that point, but over time, I think Know It, I have family and I have kids and all that I think all of those factors start to play into it, and you start to then slow down a little bit. And you can, you know, smell the flowers a little, and so on and so forth.

That's when you start to realize that okay, there's actually now it's time for me to be able to pause and see how else I can help and impact the rest of the ecosystem. And that's when I started thinking about sort of, you know, what was it that why am I doing this? What is the reason for me to do it? And I came back to this philosophical imperative. I wake up every single morning now, and my sole objective is no longer pure capital creation for my LPs, it's capital creation for the LPS, but also proliferation of this system.

Jon Low 20:46

Great, so well said.I forgot what it's going to ask next. But actually, yes, I was gonna say, you know, there's a in this in the recent economic climate. Setting aside massive events, we've seen a lot of emerging Manager talent on the rise a lot of people aspiring or in the process of strategically forming funds. In your experience and what you've seen, what are some of the things you look for in early stage and emerging manager talent? What are some of the traits that make a manager really effective at what they do both in the short and in the long term?

Ullas Naik 21:23

Yeah, I think I think, you know, I find that people who have experience with the entrepreneurial journey naturally tend to be more empathetic with entrepreneurs. And that's an important input for me and who I choose as my co investor. Because I want that empathy. It's a really hard journey. It's super hard. I mean, no founder, you know, people say this. It's a very lonely job, which is true. And I've you know, I've been in a founder role in many, many companies, and it's just, it's, it's not like you can share with your co founders, all of your insecurities and all that kind of stuff.

So to be able to be there for that founder when they need to speak, speak about some of the issues. I want that I also want people, as co-investors who have the courage of their convictions, to be able to provide harsh feedback when necessary. And I shouldn't say harsh, but like, you know, candid, straightforward, and hard feedback as necessary to a founder where they might be doing things either based on you know, it's because it's bad behavior, or because they just don't understand. And so to be able to sort of slow them down a little bit and communicate that empathetically and in a considered manner, I think is very important as well.

So I think I think those two characteristics are important that founder empathy, as well as the knowledge of the entrepreneurial journey become very important as a new manager. I do think many new managers who have not gone through significant downturns are going to be a little more affected in this kind of downturn, partly because they may not have the knowledge to manage their entire portfolios through this experience. And then I also think that the market for funding those funds is going to, you know, be tempered over the course of the next year or two, because of what's happened.

And so I think those factors combined will result in potentially a small shakeout in the number of emerging managers. But I think the ones who have again, that the same characteristics I mentioned about founders, and also have this empathy towards founders, and the courage of their convictions, I think we'll make it through this.

Jon Low 23:38

Oh, so well said thanks for sharing. Both, you know, both tactical insight and also values level insight into what you look for across the board. Just because we have only a couple of minutes left. I think one of the things Arjun let me know that was, I would say is a talent, or an eccentricity of yours would be dad jokes.

Arjun Arora 24:04

I've seen some of his dad jokes on Twitter. As a father now, I'm deeply grateful that you're sharing all of that.

Jon Low 24:24

Finally, in this interview, because, you know, we're doing our part to enrich both the founder and funder ecosystem.

Ullas Naik (Streamlined Ventures) 24:47

Yeah, for sure. I mean, I think I think, you know, I just want everybody to sort of realize that we are going through a hard time right now, but we're going to come out of it. We've been through hard times before we're going to come out of it and we're going to be you know, the environment will look up again.

And this is a message more to founders than anybody else. It's going to look up again, just be prudent and find ways to sort of extend your runway to get through this and it's all going to be okay. Call me if you need it. need me, you can track me down. I'm always available if you need me and I think, overall, you know, keep a good sense of humor and stay safe.