The following interview is a conversation we had with Shomik Ghosh, Partner at Boldstart Ventures, on our podcast Category Visionaries. You can view the full episode here: Funding the Future: Shomik Ghosh, Partner at Boldstart Ventures.

Shomik Ghosh
Appreciate you having me on. 

Brett
Yeah, no problem. Excited to chat. So to kick things off, can you tell our audience a bit more about who you are, your background, and how you made your way into the world of venture? 

Shomik Ghosh
Yeah, so I’m sure Mcgaush a partner at Boldstart Ventures. What we do is basically we partner with companies from literally the first line of code, or I actually like to say, even before the first line of code. So we back companies either pre product or early in product and really are looking for founders who deeply understand the end user pain that they’re solving for and also essentially have an idea and a product that they have in mind and then they want to build. And so what’s exciting about where we focus is getting to work with teams from literally, I mean, just test the founders, seeing them build the product, make their first hire, get their first customers, all these little wins along the way that really get us excited. And in general, where we focus is enterprise software. So that could obviously run a fairly large gamut, but we don’t do anything in fintech consumer or anything like that. 

Shomik Ghosh
We focus on our little niche of the world and hope to bring our expertise and our specialization to help our founders scale thoughtfully and faster from that perspective. So in terms of how I got into the business, I have a background. Started off in finance, grew up on the East Coast in the US. Went into sales and trading and then from there actually got really excited about tech and so decided to move out to the Bay Area, get into Tech M A and then just had a varied career know venture debt, startups, growth stage investing to where I find myself at Boldstart Today, which is partnering with founders from the first line of code. Nice. 

Brett
That’s awesome. And can you share any details on the fund size and maybe a few of the notable investments or just any of the companies that you want to highlight that our listeners may have heard of? 

Shomik Ghosh
Yeah, so we are investing out of our 6th Fund. So Boldstart has been around now 13 years. The 6th Fund is 192,000,000. It’s actually $192,168,111. That specific dollar amount is a good example of who are the founders and the people that we typically interact with at Boltstart, and that is the default router, IP address 1921-6811. So that’s a good flavor of who we like to work with and who gets excited about what we do. And then we also have $175,000,000 Opportunities Fund, which is there to as our companies scale since we backed them so early, to continue to provide them capital as they raise future rounds and continue to grow. So were the first check into a number of different companies. One company is a company called Sneak, which helps developers use open source code securely and now has moved into a broad cloud security and vulnerability platform. 

Shomik Ghosh
So were the first check there to now, I think most recently we’re worth seven and a half billion big ID in the data privacy and security space, security scorecard in the security rating space, Superhuman, which is a lightning fast email front customer, and a number of other companies along the way. 

Brett
Wow, that’s super cool. 

Shomik Ghosh
We’ve been fortunate to work with some great founders and frankly, I think when they do very well, you become known for those names. But we have a number of founders and companies that are building right now at the earliest days that we’re equally excited about and think will be those companies of the future. So we’re pretty excited about that. 

Brett
That’s awesome. And going zooming into a company like Sneak or just in general, how you approach investing, given that you’re so early stage there, what was it about a company like Sneak that caught your attention and to say, okay, let’s back these guys. Do you remember, were you involved in that decision? 

Shomik Ghosh
Yeah, so I wasn’t around at this time, but basically what happened was Boldstart had actually backed Guy Pajarni, one of the co-founders of Sneak, his previous company called Blaze, which sold to Akamai. And so while Guy was at Akamai, he was the CTO there and working on a bunch of different problems, just starting to understand different pain points that were happening. And so he actually came to my colleagues, Ed and Elliott and said, hey, I have three different ideas that I’m thinking about. And so two of those ideas, well, for all three of them he was offered a check. But for the first two, it was a kind of slightly smaller one. And for the third one, which turned out to be the idea around Sneak, he was offered a larger check. And we’re very excited about that. So that’s kind of how it started, was basically this understanding of a pain point that was out there that needed to be solved, a different approach to security in terms of solving it for developers versus being a top down kind of CISO like sale. 

Shomik Ghosh
And that got us very excited from day one. 

Brett
Nice. Super interesting. And if we zoom out a little bit and just talk about the state of venture in general, how would you summarize the state of venture today? 

Shomik Ghosh
The state of venture, I think has evolved frankly a lot in the past, even say, six months. And basically I think what has happened is went from a time of very low interest rates, capital abundance, and companies trying to scale as quickly as possible to now what the public markets are affording, which guides also the milestones and the way that companies are approaching to building as well, is favoring efficiency, right? So that means showing profitability, or even if not profitability, but showing clear unit economics that would lead to a profitable company at a certain amount of scale in the future. And so that’s, I think, the biggest change to venture over just the past even six months, because the public markets corrected so dramatically as interest rates rose, that all of a sudden, especially from the growth state side, people started to look at the rounds that had been getting done, where it was like you had 5 million of Arr and you were getting a billion dollar valuation, to now saying, well, that 5 million of Arr might only be worth ten X revenue. 

Brett
Right. 

Shomik Ghosh
Or even 20 X or something. So that was a drastically different valuation than what it had previously been just a little while ago. And so that’s caused, frankly, some Founder whiplash, I think, in terms of all of a sudden going from grow as quickly as possible to now steward your capital carefully and try and build an efficient business. But I think what gets built out of these are companies that actually solve meaningful user pain points and solve them in a way that is long term sustainable, right. Not just burning a ton of money to grow as quickly as possible. 

Brett
And what would you say excites you most about venture today? And then on the other side of that, what frustrates you the most? 

Shomik Ghosh
What excites me the most about venture is always going to be the number of founders that are exploring the edges of what’s possible. And so every single time that you think it’s kind of saturated in the market, or you think a solution is saturated, you’ll come up with a Founder who will look at say, CRM software, right? There’s salesforce, there’s HubSpot, there’s freshworks, there’s literally thousands of or hundreds of CRM companies. And so founders will come in and see a new view of that product that’s existed for a very long time. And that’s really what’s exciting, right, when the Founder comes up with this idea and is telling you about the future of how this will look and what changes will occur to bring that about. So that’s what consistently excites me and frankly, gets me up out of bed every day to talk with these founders and to help our existing founders to realize their dreams. 

Shomik Ghosh
In terms of the parts that I may not like, is I think in certain times there’s a zeitgeist that captures everyone. And so that right now, for example, it’s very exciting what’s happening in generative AI. At the same time, it’s causing a lot of founders to look into generative AI, because in many cases they can raise funding pretty quickly by being able to say, hey, we found a way to implement an AI model against customer support data. And so that’s going to improve conversion rates, shopping purchases, things like that. And on the one hand, that’s certainly something valuable. On the other hand, the question is one of defensibility, right? How are you doing that in a way that somebody else couldn’t? Just take the OpenAI API and essentially build the same product, right? So that’s one thing that I think we’ve been seeing a lot of recently, that I hope that founders listening focus more on the deep pain points that an end user needs to be solved and start there. 

Shomik Ghosh
And then you can think about how to apply AI to the data that you collect from getting that product into the hands of users. But going like almost AI first, frankly, it’s hard to figure out how to build a really defensible business, which may be putting a cap on what the founders could potentially do if they were thinking about other ideas. 

Brett
Makes a lot of sense. And if we just look at the venture landscape, there’s a lot of VC firms out there. So one of the questions I like to ask is what are you doing to really stand out and attract the right types of founders? And you’re doing something right because I actually found you through an article that you wrote. It was an article on CrunchBase News, I believe, about I think it was investing in open source projects, if I remember correctly. So is that very intentional on your end? Are you putting out content like that? Are you publishing on substack regularly to try to build up the brand? Or what does your strategy look like there? 

Shomik Ghosh
Yeah, so we’re pretty careful with our messaging, where we back dev first and SaaS founders from the first line of code, right? And the reason we are thoughtful about that messaging is we’re trying to signal just like with our fundraise and the funding amount, the type of founders and the type of people that we want to attract to our ecosystem. And so in terms of that being the strategy that’s frankly expressed through everything from our website to our mascot, like we have Sparky the Boldicorn, which if you look at GitHub, they have the Octacat. If you look at DigitalOcean, they have Sammy the Shark, right? So these developer first companies have these mascots. We have a similar mascot, right. In Sparky, in terms of substack, we use I write software, Snack Bites. And so that is something where it’s less than five minute reads for founders to look at on a weekly basis and learn different things about company building, about the markets, about technology, about for example, recently there was an article that I wrote about WebAssembly, which is an exciting new technology in the space. 

Shomik Ghosh
And so it’s all about trying to find those founders in the dev first and SaaS space. But we need to find them early, right? Because since we’re backing them at the first line of code or even before the first line of code, that means we need to find them even in some cases before they even know they’re going to start a company. And so all of the messaging and everything we do is very intentional about trying to find those people who are thinking, hey, we might want to start a company in this space. Hopefully by reading our content, by talking to our founders, by looking at our fund announcement, by seeing our website, all of that will resonate very clearly on where we focus. 

Brett
Super cool. This show is brought to you by Front Lines Media, a podcast production studio that helps B2B founders launch, manage, and grow their own podcast. Now, if you’re a Founder, you may be thinking, I don’t have time to host a podcast, I’ve got a company to build. Well, that’s exactly what we built our service to do. You show up and host and we handle literally everything else. To set up a call to discuss launching your own podcast, visit frontlines.io slash podcast. Now back today’s episode. So it sounds similar to another company that I work with. I won’t say their name, but they’re in the cybersecurity space. They’ve gone on and raised a few hundred million at this point. But the Founder started out as he was working at Airbnb, had an open source project, and he was just running that open source project at Airbnb. 

Brett
And then an investor reached out to him and basically said, hey, you should build a company around this. And that’s what he proceeded to do and he’s done very well with that. So is that what you’re doing a lot of times is just kind of hunting for these people who are experts at this. They have built maybe open source tools, but they’re just not thinking yet about being founders and you’re pushing them into being a Founder. Or have they typically already expressed some interest in founding a company? 

Shomik Ghosh
Well, it’s frankly all of the above. So there are some founders where they have a clear open source following and a product that’s been out there that we are backing. There’s founders that are repeat founders that we backed before that are coming back to us. There’s founders that are completely new, first time founders that we’re meeting and we just get very excited about the idea that they’re working on. And frankly, even when you talk about open source, we’ve backed, I don’t know the exact number, but let’s just say anywhere from the range of like five to ten companies that we’ve actually backed them before they’ve even had any open source traction. So before there was even a product out on GitHub for people to look at, right? And so it really just depends. Again, what we’re looking for is people who deeply understand the end user pain point that they’re solving, and the workflows and the integrations and the developer experience and the end user experience that would be needed to scale that product thoughtfully. 

Shomik Ghosh
So that’s what we’re looking for. Whenever we find that, we get quite excited and we find them at the edge of our existing network, at the edge of our founders, at the edge of the angels that we work with. And frankly, sometimes even within companies that we backed previously, where it’s somebody who was an early employee doing quite well and just has an idea and thankfully has had a good experience working with us as the company has scaled. 

Brett
So it’s a lot of the for developers by developers, or for practitioners? By practitioners. That kind of messaging, I’m guessing. 

Shomik Ghosh
Yeah, exactly. I mean, because we say Dev First and SaaS, obviously we do a lot of developer content and a lot of security content and data infrastructure and things like that. But also we have companies like Superhuman, Front and Customer. And so we’re also talking about a lot of how do you scale, for example, a workflow layer, right, or a productivity solution? And we have people in our network that obviously are experts in the areas of that sort of company building that we bring to bear when we’re backing founders. But also those people usually will say, hey, listen, here’s the Founder that’s building this exciting new product. I think it’d be something you guys would be interested in based on where I know you guys have invested in the past, and when we’ve talked, what I know you get excited about. Right? And so by expanding those nodes, over time, we’re able to get more potential founders in the funnel and in the future, usually those people end up eventually starting a business or at least having a product idea that they want to chat about. 

Brett
And I’m sure the numbers won’t be exact here, but if you had to just guess, how many decks do you see per year, and then how many deals do you typically do? What’s the percentage of deals that you end up investing in from what you see? 

Shomik Ghosh
That’s a good question. In terms of how many we see in a year. I mean, just even as one partner, thousands. I don’t even know how to put that into context because it’s every day I’m getting five companies, right, if not more, that I’m seeing. So it’s a pretty large funnel, I would say. What happens is, of course, some of those companies, if you’re building a fintech company and we see it right, that’s not going to be a fit, right? So then we start to narrow that funnel down based on our focus of, okay, who’s even building in our area of expertise? And then further from there, one who’s building companies that don’t conflict with our current companies, who’s building products that we believe are solving a pain point that we’re very excited about. Right. And then we’ll start to take first calls, and then from those first calls start to then decide who we want to kind of move further into diligence with. 

Shomik Ghosh
Finally, once from there, you get to the actual investment. And so when you look at it from like a total funnel perspective, I mean, it’s a very small percentage that works its way through that massive top of funnel. Even the qualified funnel, the ones that would just only be in our universe, that end up becoming something that we invest in. 

Brett
Yeah, that makes a lot of sense. And I know you touched on it a bit there earlier in the interview, but I know you sit on a number of boards. Obviously, you’re in close contact with a lot of founders, and obviously there’s crazy stuff happening in the market at the moment. So what’s some other tactical advice that you’d have to share with early stage founders at this stage, given everything that’s going on? 

Shomik Ghosh
Yeah, I think there’s a couple different things. So the first thing I would say is not to give in to the hype, right? So when everyone’s building in Crypto or when everyone’s building in AI or whatever, is the next thing that will come along? They are very exciting technologies, right? So there’s a reason why people are trying to go. It’s not just because they’re just like, oh, this is a cool thing to do, right? It’s because they see what it could unlock in terms of products that they could build. However, I would just say maybe don’t get caught up in the hype. Instead, sit back and start to really think about, okay, how could I apply this new technology to a pain point I’ve experienced, or I’ve seen others experienced, or just something that has gnawed away at you for a very long time. And usually that’s something where it’ll start to take shape in your mind. 

Shomik Ghosh
It’ll kind of constantly be this thing that’s nagging away in your brain that it’s something you want to work on. And then that’s where you can start to say, hey, you know what? This is a really cool technology that might enable this thing that I’ve always wanted to build, or this thing I’ve always wanted to try and find a solution for. You can start to kind of think about how you would apply these sort of new technologies to build that. So that’s kind of where I would tell founders, is to kind of stay away from the hype, focus on your own pain, or a pain point that you know really well that you try and solve. And then separately, there’s a lot of capital out there, and so you’re going to get a lot of no’s. But frankly, there’s also just so many people that could potentially invest in your business that shouldn’t discourage you. 

Shomik Ghosh
If anything, you should just get used to the fact that you’re just going to get a lot of rejections, right? But you just got to keep on finding that one true believer in your business that will partner with you and help the trajectory of your company going forward. And so don’t give up, don’t get discouraged. I’ve seen numerous founders who have literally come back with hundreds of no’s, but all you need is that one yes that can help you on your journey. 

Brett
Love it. I love the tactical and useful advice there. What about go to market challenges? What would you say is the number one thing that you see your founders struggle with the most when it comes to go to market? 

Shomik Ghosh
I would say the number one challenge with go to market is actually probably something. It’s also a company challenge as well, which is premature scaling. And what that means is that the process, the way it works is you start out with usually a pretty small product, right. And that product is solving one pain point for one end user. And so you got to go and find out who was going to love that product. And if you can find ten others, if you can then find 50 others, 100 others, and so on and so forth, right, that actually use the product and love it. What happens though sometimes is people find the first ten users and then they say, you know what, this is product Market Fit, we’ve found it, we know everyone loves this. And so now they go out and they hire three sales reps and they hire a VP of sales. 

Shomik Ghosh
Well, what happens is one sales reps got to sell. That’s how they make their money. So they’re going to go out and do that and meanwhile, the VP of sales is responsible for scaling the team. So they’re going to go and scale the team. And all of a sudden what you have is you may have sales even happening, especially if you have a good salesperson, but what you may not be able to know is the product being sold ahead of where it actually is. So once users start using it, they may actually be like, you know what, I was sold a basket of coal or something, right? And they then start to churn, even though from an outside perspective or from a top level perspective, it looks like you’re growing really quickly. But there’s actually a churn problem under the hood, right. And so that’s not going to build a sustainable long term business. 

Shomik Ghosh
So do not prematurely scale. It is something where you need to focus on again, the first user, the first ten users, the first 50 users, build it out very slowly and thoughtfully and then start to say, okay, now can I layer on someone to help me with sales? Because I’ve learned a playbook to get this into the hands and in front of the eyes of potential customers. 

Brett
And do you think that’s hard to do right now? It just seems like in the market, there’s a lot of pressure, at least that’s what we’re seeing is there’s a lot of pressure for founders to generate revenue, to close deals. So is that hard for them to balance that with not going too aggressive into the market? Or how do they navigate both sides of that if they’re getting that type of advice too, of you need to get revenue now? 

Shomik Ghosh
Yeah, it’s a function of burn, right. So the larger your burn, the more you need to generate revenue to make sure that you can satisfy that burn right, and build a profitable business. And so, frankly, the larger your team is, the more you have to grow. And that’s one thing that I would say again, that goes to that premature scaling side. You should not scale before you are ready to. So my advice to founders would be fight that urge to kind of hire more people to do more different roles and to grow faster until you feel like you have clear pull from the market. And that could be a good example of that would be your early customers are all saying, hey, here’s a product that we love your product. Here’s three other product ideas. If you build these, we will pay you more money. 

Shomik Ghosh
And not only do you hear that from one customer, but you also hear that from another customer, and you hear it from a potential customer who says, hey, by the way, if you build this feature, I would buy it. Right. So now you’re starting to triangulate a product roadmap of, wow, okay, if I built that feature, I’d be able to sell it. That is probably a good example of where you should maybe start to scale the engineering team a little bit more. Right. Because now you need to build that new product while maintaining the existing product and improving the existing product. And so that’s the sort of lockstep growth that you want to do and not get ahead of it. Because if you get ahead of it, your burn gets too big, the expectations for how quickly you’re going to grow also get bigger because you need to satisfy that burn and then you get into this cycle. 

Brett
Super interesting. What about category creation? Do you have a strong opinion there? Do you see a lot of founders come in and say this is a totally new category? And if they do, how do you help them decide and navigate that decision? 

Shomik Ghosh
Yeah, I think generally we usually see founders in two buckets. One is reimagining existing category, and then the other is creating a whole new category. 

Brett
Right. 

Shomik Ghosh
Neither is necessarily better. I think we tend to know, oh, this is category creation. But salesforce is a I don’t actually know what the market cap is right now, but a very large company, a huge company that started off essentially reimagining an existing category created by PeopleSoft. Right. And so I think what we like to focus on is much more, again, like, what’s the smallest kernel of product that you can deliver to solve the pain point for a user? Once you get into an end user’s workflow, then that end user will tell you what they would like your product to do next. And so they’ll tell you the path of like, hey, if you solve this for me, this would be amazing. If you solve this next thing for me too, I would pay you even more, right? And so then that’s how you start to expand into adjacencies. 

Shomik Ghosh
So you start with this narrow wedge to get into the workflow, and then once you’re in the workflow, the usage, you’re getting, the feedback loops from your customers, everything is very tight and the learning pace is very rapid. And so you’ll start to learn, okay, wow, I didn’t realize that this happened with actually a company in the vertical market software space. But basically what happened was they were building for their end users and they were kind of building a digitized dashboard for real time reporting of where the goods were and stuff. And then customers were saying, hey, we have invoices that are flowing through your platform. Do you think you could actually handle the payments for us? And they were just like, well, let’s figure that out. Like, how much invoices are flowing through? And all of a sudden they start to look and be like, oh my God, we have a lot going on here, right? 

Shomik Ghosh
That’s a whole new product line that they never thought they would build, but came from their customers because first they went in with a narrow wedge solving that pain point, and then expanded from there. 

Brett
Super interesting and super useful. I’ve done about 100 of these interviews now with founders, and everyone seems obsessed with the idea of category creation. So I think having that advice is super helpful. Now, last question here for you. I know we’re already over time, so what do you anticipate is going to happen in Venture over the next twelve months? Any predictions or thoughts about what’s going to happen? 

Shomik Ghosh
I think we will start to see, especially at the growth stage side. Some companies start to take meaningful down rounds or even potentially start to fail just because the valuations that they raised at were very large and they’re not able to grow into them in time. But I think we’re also going to find founders who are just incredibly scrappy and figure out a way forward. And the most exciting part about all of this is that right now it’s like, frankly, one of the best times to be a Founder. And it may seem crazy to say that, given what potentially is a scarier macro climate, but what people are telling you to do is to stay at Lean for as long as possible. And so the most fun of a job, right, is when you’re in. The early days with your tight team working together and just discovering new things and working with your early customers hand in hand to figure out what to build. 

Shomik Ghosh
And that’s what you get to do as a Founder for actually longer because people are saying, hey, don’t scale up the team yet. Make sure you have clear product market fit before you do that or make sure this milestone is hit before you do that, so on and so forth. And so the exciting thing about that is you get to work with people that you’ve hired, that you enjoy working with, that you enjoy spending time with, and you get to do that in a smaller setting without the challenge of, hey, we need to hire 50 people to make our numbers this year. Right. So I think enjoy that. founders should really embrace that. It’s an exciting time to go out and build. I think we’re going to see some incredible companies coming out and starting new categories and creating new categories and reinventing existing ones in the coming year. 

Brett
Nice. Well, I think any Founder who’s listening in is going to feel excited to hear that. This has been so much fun. Thank you so much for taking the time to chat. Before we wrap up, if people want to follow along with everything that you’re doing, the companies that you’re investing in and maybe potentially coming you with some ideas back, where’s the best place for them to go? Yeah. 

Shomik Ghosh
So I’m on Twitter at show Mcgosh 21, also on LinkedIn. Send me a DM, follow me, send me a message. Software Snack Bites is the name of my substack. And then also Software Snack Bites. The podcast will be coming out sometime soon, perhaps even in the next week or so. So I think there’s various ways to get in touch with me, and I’m always open to cold outbound, so please don’t feel afraid to reach out. And I will respond as soon as I can. 

Brett
Amazing. Well, thank you so much for taking the time to chat and hope we can keep in touch. All right. 

Shomik Ghosh
Thanks, Brett. Really appreciate you having me on. 

Brett
All right, take care. This episode of Category Visionaries is brought to you by Front Lines Media, silicon Valley’s leading podcast production studio. If you’re a B2B Founder looking for help launching and growing your own podcast, visit frontlines.io podcast. And for the latest episode, search for Category Visionaries on your podcast platform of choice. Thanks for listening and we’ll catch you on the next episode. You our.