Yash Patel joined Telstra Ventures in 2014 and leads TV’s consumer tech investing efforts, with an emphasis on esports/gaming, social media, ecommerce, AR and SaaS. Yash has sourced and led TV’s investments in BigCommerce (Nasdaq: BIGC), Snapchat (NYSE: SNAP), Skillz (NYSE: SKLZ), Team SoloMid, SnapTravel, Mobile Premier League, FitOn, Swish Analytics, OpenGov, Singular, and Near. He is particularly interested in products that can reach massive scale and exhibit network effects.
Previously, he was a Director of Corporate Development and Strategy at Adknowledge, an online advertising technology platform whose investors include TCV, JMI, TPG, and Nokia. While at Adknowledge, Yash sourced and executed acquisitions and lead strategic planning for the business.
Prior to Adknowledge, Yash was an investment banker at Jefferies LLC where he focused on mergers and acquisitions, capital raising and strategic advisory in the technology sector.
Yash holds a BSc (Hons) in Mathematics and Biology from University College London.
1. How did you get into venture capital?
I don’t think there’s any cookie-cutter route in venture capital. For me, you know, I went to UCL like yourself and I did a few investment banking internships at Lazard and Credit Suisse. I then ended up working in technology media and telecom within investment banking. One of the experiences that played a big role in my kind of interest in technology was my internship with Credit Suisse, where I worked in their tech media and telecoms investment banking team, mainly focused on European companies in the TMT space. After I did that internship, I then eventually made my way back to San Francisco, where I’m from originally. San Francisco, being the epicentre of a lot of exciting innovation in the tech ecosystem, I saw a lot of interesting deal flow in the investment banking side, so I ended up working at Jefferies which had a strong technology practice in terms of mergers and acquisitions. One of those companies that we ended up being mandated to work with was a company called ad knowledge. Ad knowledge was a large ad network and tech company, backed by venture investors, very reputable investors, and I got to know them. Once I finished my two-year analyst stint at Jefferies, I started to explore what I would want to do afterwards and figured that I could get some operational experience. I left, Jefferies and I ended up working at ad knowledge for almost two years and then eventually ended up joining Telstra Ventures. Telstra Ventures is, the venture capital arm of Telstra, which is a large Australian telecommunications company. And I actually found out about Telstra ventures when I was at ad knowledge, we were looking at the time to explore strategic options and the Telstra corporate entity actually ended up being interested in acquiring the company when I was working at ad knowledge. So I got to learn a little bit more about Telstra at that time and coincidentally, realised that Telstra ventures were looking to grow. It’s a real growth team in San Francisco on the venture side, a totally separate part of the business within Telstra. So I met with the guy who was running it at the time, and there was a good fit.
2. How does Telstra work differently to different venture capital firms both in in San Francisco and on the international stage?
Telstra Ventures started off as a corporate venture capital arm of Telstra, which is a big Telecom based in Australia and Asia Pac, with a significant presence all around the world. We, in 2018, actually spun out of Telstra, so we are an independent venture capital fund. The best way to think about it is we are at a $565 million dollar fund. We invest anywhere from $5 million to $10 million, usually at the Series B stage and beyond, either leading co-leading or participating in a larger kind of syndicate. We try to differentiate ourselves through our relationship with Telstra and various other synergy partners in Australia and Asia Pac, and around the world increasingly. We work very closely with a lot of the Andreessen Horowitzs of the world and like any investor, invest alongside them. In some cases, you’re very friendly with each other. In other cases, you might be competing for a deal. So we all tend to play at the same stages. The way we differentiate ourselves is, we are a smaller firm than a lot of those traditional Silicon Valley VC funds, we have six partners, including myself, and we divide up the universe of the tech industry, by certain majors, and minors that we assign each partner. For me, I drive a lot of our consumer tech investing efforts about 70% of my time and then spend about 30% of my time on SaaS Software like a BigCommerce, which went public last year. And then on the consumer side, Skillz, which is a mobile eSports company, that we lead investment in Series C and eventually ended up going public last year, through a spec merger. So we see ourselves in the ecosystem really pouring gas on the fire at that Series B stage and beyond.
3. What is your investment strategy is when investing in start-ups, how do you differentiate between the good and the bad?
In terms of how we determine whether a company is investable or not, first and foremost starts with people. We spend a lot of time with the founders, ensuring that we’re investing in lighthouse entrepreneurs, ideally serial entrepreneurs, but in a lot of cases these are first time entrepreneurs that have a very bold vision for their start-up. We obviously look at things like product-market fit, and also the changes around the industry within tech. So those, pieces of criteria are crucial to making an investment. But also as it relates to me personally on the consumer tech side. I spend a lot of time getting analytical with a lot of the data for these consumer apps like retention data, cohort retention data, engagement data. So, all sorts of data that, we benchmark, against the best tech apps out there. So it also does get quite analytical. So the science piece is also just as important as the art piece, which is really understanding of founders vision and, understanding if they based on our experience have potentially what it takes to build a company.
4. What is the philosophy and the ethos of Telstra?
Our firm believes in partnering with the extraordinary. That’s our statement that we put out there. We want to partner with extraordinary individuals. First and foremost, it’s absolutely a people-based business. And don’t let anyone tell you otherwise, as much as we invest in technology, data science to kind of source and find these great companies, we do want to partner on a personal level with these entrepreneurs. So we spend a lot of time finding and forming relationships over long periods of time with potential entrepreneurs, as well as our existing network of entrepreneurs that have proven themselves and actually achieved great outcomes. So we do try to spend a lot of time with our network and encourage a lot of cross-pollination of different ideas and insights between folks, whether they’re just starting out, or somebody who’s already seen a company go from series A to IPO.
5. What are the common issues which start-ups have when they pitch for funding? And how can they solve it?
I think what investors look for first and foremost, is great traction, however, you define it, whether it’s product milestones that you’ve hit at the earlier stages, or if it’s daily active users, monthly active users or retention cohorts, these show that you have a path to becoming world-class. So I think it’s very important to kind of articulate your hockey stick growth that you’ve shown so far, and how this will continue in the future with, more financing, and then as it relates to your pitch and how you win over an investor. I think it is also important to really articulate your vision and be very focused as a start-up in the early days in terms of understanding your customer base, understanding the specific pain point that you’re solving and as you start to progress, how does this start-up look like in five years. So if we can understand that vision, starting with a more narrow pain point that extends to something far broader in time, that’s probably one of the most critical pieces of the pitch. Too often, I think we sort of see really great start-ups that are solving a narrower pain point but they can’t really articulate how they will look like, in 5 to 10 years, and how this vision comes to fruition.
6. There is a growing trend of both start-ups and venture capital firms, and even Wall Street firms moving to both Texas and Florida. What are your thoughts on this in terms of the impact on the venture capital and start-up scene in California?
I don’t think Silicon Valley is going anywhere, I think the roots of Silicon Valley were laid, decades ago, with the semiconductor industry. You’ve also got a lot of great talent already clustered here, because of the proximity to Stanford, UC Berkeley, UCSF Medical Centre, a lot of great academic institutions, and then a lot of great folks that are part of this ecosystem, exchanging ideas. That’s the magic of Silicon Valley. I however do think that there are other clusters within America, Austin, Miami, Denver that will emerge as an alternative, satellite offices for a lot of start-ups as well. One of my companies BigCommerce has been headquartered in Austin, Texas, for years and there’s a lot of great talent. I’m very bullish on the Bay Area, longer-term and I do think that you will see a resurgence with a new generation of entrepreneurs that are looking to improve, growing and scaling the next, Airbnb, Uber and Palantir.
7. What advice would you give to people who want to go into venture capital?
The reality is, there’s no cookie cutter background out there. But what you can do, if you want to get into venture capital is immerse yourself in the tech ecosystem as best as you can, right? So, talk to emerging entrepreneurs, try to understand what trends they’re seeing and come up with a thesis or viewpoint on where the world is going. And, in a lot of cases, if it’s contrary, and that’s even more interesting, contrary and backed by data, facts, primary research is really interesting. Also if you can network and immerse yourself and have a lot of strong conviction that is backed up by research and reach out to three to five companies that fit within your thesis and connect them to some of these venture funds, I guarantee they’ll be excited, and especially if they make an investment in one of the companies that you source for them. That’s a great start. Ultimately, that’s all we’re doing. We’re trying to find the greatest start-ups in the world and form a thesis on the trends that are happening, that doesn’t seem obvious at the current time, so if you can kind of help to do our job, I think we’d want to bring you on board.
We would like to thank Yash for taking the time to speak with us.