Sunny Midha is a New York based venture capitalist, a Principal at Principia Growth, a VC fund that focuses on B2B /enterprise technologies like Cloud Computing, Machine Learning, Computer Vision, Mobility, Robotics, and Delivery Platforms for consumers. Sunny has more 10+ years experience in M&A, capital markets, restructuring and venture capital across multiple platforms with Deutsche Bank (London), Houlihan Lokey (New York), Greycroft (Los Angeles) and Amplify.LA (Los Angeles). He holds a BSc in Economics from London School of Economics, MBA from the University of Southern California and a MS in Analytics from Harrisburg University. He is a BAFTA Scholar and avid filmmaker with multiple short film festival awards. Sunny shares –
“Many founders do not build in analytics into the company ethos from day 1. They think this takes away from their product build resources, however I would argue analytics are part of the product build in today’s world. Build KPI trackers and use them everyday in all divisions to grow and improve your product.
Team up with the right people; if you work with people who don’t believe in your mission, you will eventually hit a wall – choose your team carefully.”
Sunny answers a few questions with AsiaTechDaily:
Please share your background with us.
Sunny Midha: I have deep technology and media domain experience across consumer, enterprise software and industrial convergence. I have spent many years in finance as an investment
banker, an entrepreneur and now an investor.
Tell us more about your fund.
Sunny Midha: Principia Growth was started by Josh Tanzer who I had previously worked with at an investment bank. He has 25 years of Silicon Valley / Tech financing experience across multiple platforms with Credit Suisse, Lazard and Jefferies with over $6.5 billion raised for companies.
He realized as an individual investor or family office, it was extremely hard to get access to high quality late-stage technology deals, so in Summer 2020, Principia Growth was formed to fill this much-needed gap; we have many family investment offices that support our vision.
What kind of startups/sectors have you invested in till now?
Sunny Midha: As late-stage growth investors, we monitor a broad spectrum of emerging technologies and invest in entrepreneurs who are building enduring companies.
In the first six months of being formed, we have invested in two deals, both in the autonomous software sector. The first investment was in Seegrid, which leads the automated guided vehicle (AGV) and autonomous mobile robot (AMR) industry. The second deal we just completed is the leader in the autonomous trucking space that has a presence in the US, China and Europe.
Which type of companies do you look to invest in? and What’s your mental model for investing?
Sunny Midha: We take a thesis driven approach as we look to the mega-trends and shifts in consumption that are occurring. Our investment team and strong advisory board have a broad range of sector experience in areas such as SaaS enterprise software, FinTech and consumer applications. We are also happy to look at hardware companies. Overall, we want to invest in innovation wherever we can find it.
Our focus is to attain achievable upside returns while spending time thinking and structuring downside risk as well; capital preservation for our investors is paramount.
What is your typical investment range and how many startups you invest in per year in general? Can startups from outside the US get funding from your fund?
Sunny Midha: Our aim is to invest in 3 high quality companies per year. We focus on equity check sizes of $5-25M per investment; since we are new, the focus is the US and the EU, but we will look at global companies if there is strong KPI traction and a lead investor that has a US and local presence.
What would be the KPIs that you usually check about the startups’ growth?
Sunny Midha: Each industry KPI is different, but as a minimum, revenue growth is important; we like to target at least 50% year on year growth and the ability / achievability to become profitable in the next 24 months. Coupled with fast growth, we analyze the quality of Revenue to make sure that the revenue can be sustained for the long term. Gross margin unit economics improvement is also important.
How did your fund handle the COVID-19 outbreak situation?
Sunny Midha: Principia Growth started in the Summer of 2020 with the whole team working remotely from day one. We were all used to video/conference calls in prior lives, so the only difference is not being able to visit portfolio clients, which we hope is only temporary as the world returns to normal in the next year.
What are some of the challenges you face as a startup investor?
Sunny Midha: The biggest challenge is when we want to invest in a company, but a high valuation poses a key issue. We are disciplined investors and it is hard to pass on a great management and services. Staying disciplined to your core values and thesis is important and that is core to Principia Growth’s values.
Do you have advice for anyone looking to start a fund?
Sunny Midha: Put the best team together and don’t worry if it takes time; play the long game and enjoy every moment.
What mistakes do you see founders make when raising money?
Sunny Midha: Many founders do not build in analytics into the company ethos from day 1. They think this takes away from their product build resources, however I would argue analytics are part of the product build in today’s world. Build KPI trackers and use them everyday in all divisions to grow and improve your product.
Know and speak to your audience a lot and don’t forget to keep them happy. You can chase growth, but don’t ignore the users that put you on the map in the first place when you scale.
What’s your advice to entrepreneurs who have a chance to meet investors like you? What are the top 3 questions that you always ask the founders?
Sunny Midha: Make sure your KPI / metrics are clear and upfront in your marketing materials and pitch.
Use of proceeds – break down clearly what are you going to spend the money on and why.
Partnerships – If you have a partnership with a brand name / logo and you bring it up, make sure you have achieved meaningful metrics before you. A lot of investors show us a logo on a page before the metrics have started to prove themselves.
Valuation – what are you benchmarking your valuation metrics on.
What’s your general thought about the term “Global” and What are the important factors/criteria for local startups to consider international expansion?
Sunny Midha: We like entrepreneurs to think with a global mindset, but they need to show dominance in their home market first.
I think if you can sign up global customer names at a consistent pace, that will give you a sense of timing of when global expansion should occur.
What kind of startup or tech industry will impact the world in the future like 2-3 years in your view?
Sunny Midha: Our first two investments have been in the space of autonomous software and that type of innovation is accelerating at such a fast pace that we can see that making large P&L impacts for years to come. Cybersecurity and machine learning are other areas that continues to innovate at a high rate.
What are the top-three books or movies/TV series that changed your life and why?
Sunny Midha: This book got me fascinated with Hollywood and the creative world: “The Mailroom: Hollywood History from the Bottom Up”
“Quiet: The Power of Introverts in a World That Can’t Stop Talking” is a non-fiction book written by Susan Cain. This book explores how the world perceives introverts in society and how we can understand them better.
“Work in Progress: Risking Failure, Surviving Success” is a book by Michael Eisner, a former CEO of Disney that helped transformed the Company in the 1980s to 2000s and how he navigated big decision making.
How do you keep yourself motivated every day?
Sunny Midha: I love the velocity of ideas people have on a daily basis and how they go about executing them. I am highly motivated to helping people to put their ideas into motion and seeing their vision develop.
What are the top- three life lessons that you want the future generation to know?
Sunny Midha: Start doing earlier on in life if you have an idea, there is enough money out their now to help you.
Team up with the right people; if you work with people who don’t believe in your mission, you will eventually hit a wall – choose your team carefully.
Don’t be afraid to say no. Focus wins and you have to be careful where you spend it.
What would you like to be remembered for?
Sunny Midha: Being kind and helpful to family, friends and anyone that can use my help.
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