Apr 12, 2017 · 26m · 20vc
20VC: Why Young VCs Must Have Cheque Writing Ability & Why Corporate VC Is The Best Training Ground For New VCs with Nagraj Kashyap @ Microsoft Ventures
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of The 20 Minute VC, host Harry Stebbings interviews Nagraj Kashyap, head of Microsoft Ventures, discussing his career trajectory, strategies for training new venture capitalists, and the unique structural advantages of corporate venture capital. Nagraj shares key insights on building investment teams, driving ecosystem diversity, and generating strategic value for tech corporations.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 28.4% of the talking time here. How this is scored →
Harry as informed peer 1.8 Guest teaching 4.0 Guest disagreement 1.0 Harry pushing back 0.8
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 9:16 Direct rejection of host premise
Nagraj immediately shuts down Harry's suggestion about LP fiduciary duty with a sharp 'Absolutely not. That is not the reason.'
Hardest push from Harry ▶ 9:16 Probing LP structural differencesHarry pushes back on Nagraj's claim regarding training flexibility by asking if fiduciary duties to external LPs are what constrain traditional VCs.
Biggest teaching moment ▶ 9:23 Breakdown of fund mechanicsNagraj educates Harry on rigid financial VC fund formulas versus corporate VC balance sheet flexibility.
Harry holds his own ▶ 9:16 Hypothesis on LP fiduciary dutyHarry demonstrates industry awareness by posing a specific structural hypothesis regarding LP fiduciary responsibilities.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Welcome and Nagraj Kashyap's Path into Venture Capital | 1 | 2 | 0 | 0 | Harry welcomes Nagraj and asks foundational questions about his career path and launching Microsoft Ventures. Nagraj sets a warm tone by playfully complimenting Harry on his unorthodox entry into VC. | |
| Training New VCs and the Unique Advantages of Corporate VC | 2 | 6 | 3 | 2 | Harry asks if corporate VC flexibility stems from LP fiduciary differences, but Nagraj firmly corrects this premise with an 'Absolutely not'. Nagraj then educates Harry on how traditional fund structures restrict small check sizes while corporate balance sheets allow training flexibility. | |
| Mentorship and Overcoming Misconceptions Around Corporate VC | 2 | 5 | 1 | 1 | Harry brings up negative market perceptions around corporate VC. Nagraj addresses the stigma by citing market stats and tracing misconceptions back to short-term capital deployment during the late 1990s tech boom. | |
| Future Outlook for Corporate VC and LP Relationship Dynamics | 2 | 4 | 1 | 1 | Harry inquires about future sector growth and LP reporting structures. Nagraj cites recent industry research predicting corporate VC market share growth and outlines strategic versus financial reporting for sole corporate LPs. | |
| Diversity in the Venture Capital Ecosystem | 2 | 3 | 0 | 0 | Harry leads a quick-fire round covering diversity, literary influences, and recent deals. Nagraj shares detailed thoughts on why VC must return to funding core technologies like semiconductors and details his investment in Kahoot. |
Statements from this episode (11)
Kashyap: Smart non-VCs can be trained into successful venture capitalists
“Basically, what I learned was you can absolutely take young professionals who are smart, who are just pure smart, who have never done VC, and you can train them.”
Kashyap: Developing young VCs requires letting them write small checks early
“The lessons I've learned which have worked well is, you hire what you think are the best, smartest people, you give them responsibility very early on, and you give them responsibility by letting them essentially write small checks, make small investments”
Kashyap: Letting junior VCs make small mistakes prevents bigger errors later
“If a newly minted VC wants to write a small check, and you think that's a mistake, many times you'll say, why don't you go ahead and do it? And what happens is, If it turns out it didn't work out, they will never again do it again.”
Kashyap: Corporate VC is a better training ground than traditional VC
“And I think that's why I think corporate VC is a great training ground. You cannot necessarily do the things I'm talking about in a normal financial VC environment, but in the corporate VC environment, you can do these things”
Kashyap: Corporate VCs lack fixed check sizes and ownership targets
“In the corporate VC environment, we don't have constraints of, we have to write a check of X million dollars. We have to get 20% ownership. We only, only can invest in a sector that the LPs gave us money for.”
Kashyap: Corporate VC share will grow to 35% over 5-10 years
“Now, I don't have a crystal ball, but there was a recent report, actually just very topical, released, commissioned by Telstra, that came out just a couple of days back, which said that they see corporate VC going from 25% to 35%, I think, over the next five t…”
Kashyap: Good financial investments drive strategic value in corporate VC
“I've always been a believer that good financial investments lead to good strategic outcomes. And you know, if a company doesn't do well, there's no strategic benefit for anybody.”
Kashyap: Corporate VCs foster greater diversity than traditional VC firms
“Historically, it's been very, very hard to see how there's sort of just a fundamental lack of diversity in the way it is, and I sort of trace it back to a little bit of the inflexibility with the VC model, and the financial VC model, and why I think corporate …”
Kashyap: Investor diversity makes commercial sense due to diverse end markets
“You want to have representation that's commiserate with what the end markets are. And so from a financial and business sense, a business perspective, it makes sense to have a diverse set of investors.”
Kashyap: Venture capitalists judge founders too quickly in one-hour meetings
“I feel that myself, you know, VCs and myself included, we pass judgment too quickly. We meet a company. We really don't know what journey they went through before they got To presenting us across the table, but you know, they basically get an hour and we pass …”
Kashyap: Venture capital funding for semiconductors has almost disappeared
“Very few VCs will touch semiconductors, and it's a core innovation. Hardware is a core innovation on which software resides. So we do need to see continued innovation at the bottom layers. But that has sort of almost gone away from the VC ecosystem.”