The Ledger
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Mohnot: VCs who opposed Saudi money are now hypocritically seeking it
“We haven't, but I think it is very hypocritical that all these folks who were anti-Saudi money are now over there just praising everything.”
Mohnot: Multi-stage funds lose winners by writing small competitor checks
“My portfolio company that is working is raising a series A or series B. They don't want to talk to that investor because that investor invested a million dollars in their competitor. That competitor is almost dead anyway, but they're like, fuck them. I'm not g…”
Mohnot: Large seed rounds create complacent startup teams
“Raising big rounds makes people like makes people cushy. You end up attracting people with salaries that, like, actually they could have gone into a big company and actually they belong at a big company.”
Mohnot: Better Tomorrow Ventures waives part of its 2% management fee
“You know, now we have three hundred million AUM. We could take two percent, which is six million to run our business. We actually take a much smaller amount and return it to LPs.”
BTV's Top Fund I Deals Grew From Single-Digit Valuations to Over $300M
“Number one we led a deal at 12 and a half million. It's now worth 1.2 billion. Number two, our first check was at, it was either eight or ten million and it's now six hundred million. Number three, first investment was at two million. It's now six hundred mill…”
Mohnot: Single-check VC strategies force follow-on capital into weaker companies
“If your strategy is just to do one check, but you have to do some follow-ons, then you end up not Following on to your best companies, you end up following on when you have to, which can be your worst companies.”
Mohnot prefers in-person work but will not mandate it for startups
“And now, it is actually my preference that companies are in person, but I can't mandate it. I don't mandate it because I think we've seen too many success stories that aren't all in person.”
Mohnot: Better Tomorrow Ventures will cap its fund size at $225M
“My fund zero was fifteen million, then we went to 75, and now we're two 25 total. But we don't want to grow from here.”
Mohnot: Seed leads are forced to follow on when reputable investors join
“If you lead the seed round and somebody good is following on, you kind of have to follow on.”
Mohnot: Every committed LP backed out of BTV's March 2020 fund close
“And this close that we were supposed to do in March, everyone who had already committed, including people who had signed, backed out.”
Mohnot: BTV portfolio company slashed $7M/month burn to reach cash flow positivity
“We actually have companies that have been able to do it, and like, we have a company that went from burning seven million dollars a month at the beginning of this year to probably being free cash flow positive in the next couple months.”
Mohnot: Better Tomorrow Ventures' European investments do not serve local markets
“Some of the companies we've invested in Here are actually not serving the local market. So one of them is a company that sells into banks globally. One of them actually sells primarily in India. And then we have a couple that actually none serve just the local…”
Mohnot: Over-funding duplicate startups destroys sector profitability through price competition
“In 20, 20, 20, 21, every company we funded, there were five companies just like it. Also with great founders, with great investors. And so what ended up happening is a bunch of capital went into these companies and five companies serving the same customer set.…”
Mohnot: Better Tomorrow Ventures caps individual LP concentration at 10%
“So we, all of our LPs are 10% or less of our fund, and it makes us feel good now in a market where if any one LP doesn't come into our next fund because, you know, circumstances changed, it doesn't, it's fine for us.”
Sheel Mohnot: Better Tomorrow Ventures dictates valuations as a price maker
“The other is there's a difference between a price taker and a price maker. So like, Oftentimes a founder will say like, this is what I want. And we say, okay, like totally understandable. If you want to work with us, the price is X. And here's a bunch of folks…”
Mohnot: BTV Fund I averaged $1M check at $10M post-money valuation
“So so our minimum is actually 10. So we have invested so in fund one, our rough numbers, our average first check was a million bucks, and for about 10% ownership. So we invested on average at a ten million post in fund one.”
Sheel Mohnot: Better Tomorrow Ventures targeting 15% average fund ownership
“We averaged 10%, and in this fund, we're hoping to average closer to 15.”
Mohnot: BTV portfolio Series A rounds hit $100M-$125M valuations in late 2021
“Particularly second half of last year, all of the series A's in our portfolio, like we were doing them at the price that, you know, we invest that, and then they were getting done at the hundred to 125 range.”
Mohnot: Better Tomorrow Ventures does not automatically exercise pro-rata rights
“Yeah, we definitely don't always do our pro rata. I would say we are choosy”
Mohnot raised Better Tomorrow Ventures' $75M Fund 1 without an anchor LP
“No, we had no anchor. So, so there was fund zero, my fifteen million dollar fund, then fund one, 75, and we had no anchor. In the seventy five million dollar fund.”
Mohnot: BTV accelerator will invest $500k each in 6-10 startups
“So ours is, we'll probably have about 10 companies in this We're thinking six to 10, and we're investing a half million in every company.”
Mohnot: Better Tomorrow Ventures runs $150M seed and $75M opportunity funds
“So we're a hundred and fifty million dollar seed fund and a seventy five million dollar opportunity fund.”
Mohnot: Three of his top five portfolio companies were pivots
“So listen, three of my top five companies were pivots.”
Mohnot: BTV increased fund reserves from 50% to 60%
“And in fund one, we had 50% reserves in fund two, we have actually 60% reserves. So we're reserving more for follow ons.”