The Ledger
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Ravikumar: Indian founders arriving in the US are more fully formed
“I think there's just something about founders when they're building in India today, they just have this, like, scrappiness, and by the time they come to the U.S., they feel a little bit more formed than a lot of the very raw companies you even see in the U.S.”
Ravikumar: Sierra Ventures stopped investing in traditional SaaS, focusing on AI-native
“And obviously as early stage investors, we're not investing in any SaaS companies anymore. Most of it is AI native building some sort of AI agents and stuff like that, but we don't see it as a, we don't see the SaaSpocalypse thing as a, as an inevitability.”
Ravikumar: Usage and gross retention define product-market fit in AI
“I think in the AI world, to me, the leading indicator of product market fit is actually usage. And can you actually predict number of tokens, what the user is doing on the product? Are they consistently using it every day? Are they consistently using it every …”
Ravikumar: Sierra Ventures Gives Lead Partners the Final Investment Decision
“And so the idea is we try to bring these founders in the partnership really tries to pattern match on the founder profile and the quality of the team and how they answer questions, how they respond to different things. But ultimately the final call comes down …”
Ravikumar: Sierra avoids early secondary sales to prevent negative signaling
“We've obviously, we'll consider secondaries, but I would say for the most part, one of the benefits of having Sierra on the cap table is the founders get a lot of reputational benefits as a result. So we try not to sell. We don't want to create any negative si…”
Ravikumar: Reify Health lands eight- and nine-figure contracts with pharma companies
“In our portfolio, so Reify I, like, I won't share Sure names, but they have customers paying nine figures, customers paying eight figures. Like we have very, very large deals with pharma.”
Ravikumar: Sierra Ventures' non-2012 funds generate 4x to 6x TVPI
“This would be 20... 12 and 20 12 vintage. And then the other funds are probably four to six X TVPI.”
Sierra Ventures avoids over-coaching founders before partnership pitch meetings
“We try to prep them a little bit, but you know, we all kind of talk about this is like, we don't want to coach the founders too much. We want to see them how they are, see how raw they are, see how they present, how they handle themselves.”
Ravikumar: Foundation model deals do not make sense for Sierra's fund size
“We think that they are critical to helping enterprises really adopt AI in the long run, but this is a good example of those like one-off exceptions that we'll do. We think there's an opportunity in the foundation model space, but it's just not something that r…”
Sierra Ventures Scales Consensus Requirements Based on Check Size
“We actually have, I guess what I call a loose consensus model. So the bigger the check, The higher the bar for consensus. The smaller the check the lower the bar for consensus.”
Kamath: Smallest AI signed a seven-figure US telecommunications enterprise deal
“It is converted to a seven figure multi-year multimillion deal. But we will announce it formally sometime like in April or so once we sort of clear a few things, but yeah, it is that like all of those things are in paper right now.”
Ravikumar: Sierra invests $2M-$7M upfront across 30-35 companies per fund
“So we try to write two to seven million dollar checks up front and take 30 to 35 shots on goal. So two to seven million dollar initial check, and then we'll reserve, call it roughly 50% for follow on.”
Ravikumar: Sierra led Reify Health's $6M Series A before $4B valuation
“This was a company we led the series A in, in 2018. We led a six million dollar round at a pretty reasonable valuation at the time. Big, big owner in the company. And the last round ended up getting done at about four billion dollars by Altimeter”
Sierra Ventures issued Smallest AI a term sheet within one to two weeks
“From the time he was like, quote unquote, ready to raise to writing the, to giving him a term sheet. I mean, it was maybe a week, couple of weeks, something like that.”
Ravikumar: Sierra Ventures targets 14% to 15% average ownership per deal
“Typically for us, we like to be in the double digits in terms of ownership. The reality is the number can vary, but the average for us is kind of right in the, you know, in the teens, mid teens, 14, fifteen-ish percent.”
Ravikumar: Sierra Ventures Evaluated Airwallex in 2014 or 2015
“We looked at Airwallex very early on that one week. I mean, and, but remember when we looked at this was probably. 2014, 20 50. It was very, very early on. And at the time, all they did was Australia, China corridor crypto payments. And a lot of it was around …”
Ravikumar: Sierra Ventures sold Shape Security to F5 for about $1B
“We've had some other really good exits like Shape Security, which we sold to F-Five for about a billion dollars.”