Unusual Ventures Partner Sandhya Hegde On Entrepreneurship And Breaking Into Venture Capital

The Crunchbase “Female Founder Series,” is a series of stories, Q&As, and thought-leadership pieces from glass-ceiling-smashers who overcame the odds to found and lead at successful companies and VC firms.

Sandhya Hegde is a partner at Unusual Ventures, leading investments in enterprise SaaS platforms. Prior to Unusual, she was an early employee at Amplitude, joining as a product manager at the single-digit ARR stage. She climbed the company ranks leading pivotal efforts across product development, fundraising, category creation, and go-to-market strategy. She went on to become the executive vice president of marketing and growth, helping establish Amplitude as a unicorn and category leader in product intelligence overseeing 20x growth in its ARR. 

While at Amplitude, Hegde also founded Amplify, the world’s leading product-led growth conference and served as a product strategy adviser to leading startups and Fortune 100 businesses including NBC, T-Mobile and Ford

Before Amplitude, Hegde was an investor at Khosla Ventures and Sequoia Capital, where she focused on emerging market startups in SaaS and cleantech. For Hegde, what matters in venture is not just building successful startups but diverse, generational businesses that set the industry standard for both customer and employee impact. 

In this Q&A, Hegde shares how she, as a first-generation immigrant and woman of color, got into VC and why she’s looking to invest in the “TikToks of enterprise software.” 

Sandhya Hegde, Partner at Unusual Ventures

Q: Why did you join Unusual Ventures?

I first started working in VC in 2009 and realized that underneath the glitz, there are a lot of entrenched problems in Silicon Valley. While VCs invest in disruption, their own firms have been very resistant to change. It takes a new team to challenge that status quo. 

Unusual Ventures represents that new breed of funds that are building the future of venture capital. What makes Unusual special is two things. First, the team — it’s the most high-integrity, intelligent, diverse and humble team I have met. They are founders, operators and coaches first; investors second. 

The other unique aspect to Unusual is a founder engagement model of staggering depth. Unusual is the first full-service seed fund in Silicon Valley helping deeply technical founders kickstart their go-to-market strategy to build generational enterprise software companies. We offer marketing, sales, education, community development and recruiting services that startups can leverage to get ahead of their peers. The founders of Unusual, John Vrionis and Jyoti Bansal, have built a foundation for a new kind of fund that’s likely going to become the status quo in the next few years; putting company building ahead of purely financial investing as the ultimate VC DNA.  

Q: What kind of startups and founders do you want to invest in?

I am looking for the TikToks of enterprise software. Startups that are design-centric, data-first and help their customers be their best selves at work. TikTok democratized video creation and distribution for its users with brilliant use of product design and data. We need that in enterprise software where most incumbent tools are hard to learn, frustrating to use, and make you feel dumb rather than smarter. 

I love working with founders who care deeply about a problem they want to solve and the journey of company building and don’t just chase vanity metrics.  

Q: How did you make the connections you needed to get into VC?

That’s a great question because as a first-generation immigrant woman of color, I certainly don’t look like your typical Sand Hill Road Tech VC. I grew up in Mumbai and studied engineering at IIT Bombay and had never heard the phrase venture capital until I was 21 and trying to build my own startup. 

For someone without the privilege of family and friend networks in finance, the best way to get into VC is to gain the experiences you need to discover and support great founders. There are two things you need to do at a minimum: One, be an intensely curious student of technology, and two, start/scale a startup to learn how to build companies. 

My experience being a founder, my time learning at Stanford from some of the best executives in the world, and later helping scale Amplitude to become the leader in enterprise product analytics, are all things that have helped me not just be a VC but actually be a good partner to the founders I am investing in.  

Q: What is your advice for other VCs at the beginning of their journey?

Think about what makes you unique and build on those strengths. Find your niche, build conviction in it and strive to be the No. 1 leader there. Put your founders’ needs ahead of your own. Remember that venture capital is a long game — you want to optimize for success on 5-15 year horizons, not what looks good this month or next year. 

Q: What is the most valuable lesson you’ve learned in VC?

I would say I have learned two extremely valuable lessons worth revisiting every day. One, the market always wins. No matter how strong the founders are, how good the product is and how much support they have from VCs, you can’t overcome the lack of growing market demand with a great but nice-to-have product. 

The second lesson is to avoid being biased by halo effects and fear of missing out (FOMO). Good VCs have a deep responsibility toward founders and the broader startup community to be objective and examine their own biases constantly. Direct, constructive feedback between founders and VCs is critical to the community to prevent massive hype cycles of wasted money and time. We all need to do our part keeping each other honest. 

Q: What unique insight do you have as an ex-operator into how startups grow?

I often see investors who haven’t personally started or scaled companies focus a lot on their financial spreadsheet. They want their startups to have gold standard metrics. The unique insight being an operator gives you is that behind those metrics are people who need to be hired right, led right and incentivized right to make the metrics look great.

So, the best way to understand what’s blocking growth is to go a few levels deeper than the spreadsheet and talk to customers, partners and employees. When you are running a company, every problem at its root is either a market problem or a people problem. 

There are a few critical platform shifts happening in technology that will allow for a new wave of SaaS products to be built that no one could imagine 10 years ago. The rising adoption of cloud data and video are two such critical trends. Entrepreneurs starting SaaS companies today also have the benefit of building with what many call a “Web 3.0” stack — a more intelligent, interoperable and decentralized ecosystem. This will make it possible to build more collaborative, best-in-breed products that drive a whole new wave of unbundling in software.  

Q: How should enterprise founders decide on a startup idea?  

Picking what problem to focus their startup on can be very different for consumer and enterprise startups. While consumer startups are trying to catch lightning in a bottle, enterprise startups are often trying to just build a better mousetrap. 

The most important driver should be finding a “hair-on-fire” problem. Something that’s existentially painful to your customer and will lead to their gradual demise as a business if they don’t fix it. 

It’s easy to get funding for startup ideas that are “fashionable,” but unless you are solving a problem that’s existential to your customer, you are not going to build a generational enterprise business — no matter how cool the technology is. 

Q: What is your advice for early-stage enterprise founders trying to scale their companies?

Nail it before you scale it. With all the funding available today it’s tempting to just start growing your sales team to chase customers, but if you are not able to build a repeatable go-to-market motion it means you haven’t nailed your foundation yet. You need to first have a strong cohort of high-retention customers for your early product. You need to experiment with your positioning and messaging. You need to build in a clear growth flywheel into your product experience so that when you step on the gas, you are ready to go. 

Q: Do you have any advice for entrepreneurs in the current economic climate?

It’s never been easier to raise money and never harder to hire great people as a startup. Today, there are 20 other startups competing with any good idea a founder has. One side effect of this environment is that raising money from VCs starts becoming the big success metric everyone shares and celebrates. 

I would advise founders to not get distracted by that hype and keep their focus on the things that matter over all others — delighted customers and a passionate team. 

  • Originally published April 15, 2021