The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch

20VC: Lightspeed's Arif Janmohamed on Why Market Risk Is The Most Dangerous Risk To Underwrite As A VC, How To Determine When to Stretch vs Not on Price Today & The $TRN of Market Cap Up For Grabs Today In Enterprise

Oct 21, 2019

Arif Janmohamed, a Partner at Lightspeed Venture Partners, shares his journey from Silicon Valley tech enthusiast to venture capital leader. He discusses why market risk is the most perilous risk for VCs to underwrite and evaluates current pricing dynamics, questioning whether enterprise investing has peaked. Arif offers insights into assessing market timing and dives into innovations in corporate travel management with companies like TripActions and AppZen, highlighting their rapid growth and potential.

Ask episode

AI Snips

Chapters

Books

Transcript

Episode notes

ANECDOTE

Early Career

Arif Janmohamed's first job was building robots in a garage in Silicon Valley.
He later became a chip designer at WebTV, acquired by Microsoft.

INSIGHT

Enterprise Software Boom

Enterprise software is having a moment, driven by new technologies like cloud, data, AI, and ML.
This creates a massive market opportunity, estimated at $1 trillion.

ADVICE

Valuation Considerations

While valuations matter, be less price-sensitive for exceptional teams in large markets.
Series A valuations have increased, but justify them with potential returns.

Get the Snipd Podcast app to discover more snips from this episode

Get the app

Arif Janmohamed is a Partner @ Lightspeed Venture Partners, one of the leading firms of the last decade with a portfolio including the likes of Snapchat, Mulesoft, Max Levchin’s Affirm, AppDynamics and many more incredible companies. Some of Arif's most notable companies that he has led or been involved with for LSVP includel; TripActions, Blend, Nutanix, AppZen, MoveWorks and more. Prior to Lightspeed, Arif worked in the corporate business development team @ Cisco as part of transaction leadership and execution on a number of deals including WebEx. Before WebEx, Arif founded WVP Ventures, a student-run venture capital organization.

In Today’s Episode You Will Learn:

1.) How Arif made his way into venture and came to be one of the valley's leading enterprise investors with Lightspeed?

2.) We are seeing pricing hit 100x ARR multiples, does Arif believe we are seeing enterprise investing as past it's peak? Are we seeing late-cycle momentum investing? Would Arif agree with matt Harris, "Series A pricing does not matter anymore?" How does Arif assess his own price sensitivity today? How has it changed over time?

3.) Why does Arif believe that market risk is the most dangerous risk to underwrite as a VC? How does Arif think about and assess market timing? What has changed over the last few years to unlock such quantums of capital into the enterprise market? With the acquisitions of Duo, Mulesoft, Qualtrics, will we have a next-gen incumbent set or will it be an environment of existing incumbent consolidation?

4.) What does Arif specifically believe founders need to get right when it comes to company design, in order to scale to a $5-10Bn market leader? In terms of the go-to-market, who does Arif think has nailed it most recently? Why? How does Arif test for a founding team's ability to execute on go-to-market when meeting them early on?

Items Mentioned In Today’s Show:

Arif’s Fave Book: Stumbling on Happiness, How Not To Die: Discover the foods scientifically proven to prevent and reverse disease

Arif’s Most Recent Investment: TripActions

As always you can follow Harry, The Twenty Minute VC and Arif on Twitter here!