Last edition of 2024

Earlier this year I shared that my word of 2024 was “listen.” My goal was to learn from others who are unequivocally smarter than me, with the end goal of becoming a better writer, investor, parent, friend, and human (not in that order).

As we close out 2024, “listen” has been even more top-of-mind. And before the year is through, I’d love to hear from you.

See, I’ve been writing Small Bets for 3 years now. And the way I see it, I have two options.

I can keep on writing this newsletter in the same way I’ve been writing it since the beginning. Or I can change things up. And I’d love your take on which way to go.

Mind answering the poll below?

Thanks! And now, on to this week’s edition of Small Bets.

Today's topic: how Shankar Sahu got really, really good at investing

Every investor has their own secret sauce. Their unique approach to sniffing out the next big thing. And one of the best ways to level up your own investing game is to learn from those who are crushing it.

Enter Shankar Sahu.

Shankar is a member of the Hustle Fund VC Fellowship program, part of Angel Squad, and has a portfolio of 58 startups (and counting).

But what really sets Shankar apart? His ability to source high-quality deals.

Let's peek behind the curtain and see how Shankar works his magic, shall we?

From Billion-Dollar Builder to Angel Investor

Fresh out of college, Shankar knew he wanted to dive headfirst into the startup world. But instead of launching his own venture, he made the bet to join eClerx as an early employee.

Talk about a jackpot. Shankar helped build eClerx from the ground up, turning it into a billion-dollar business. Not too shabby for a first gig.

When Shankar moved to the US, he set his sights on the world of angel investing. But he needed two things: 1) great dealflow, and 2) an opportunity to learn. He dove into both challenges headfirst.

Conferences? Check. Online communities like Stonks? You bet. AngelList syndicates? He was all over it.

He joined Angel Squad to level up his knowledge. And then he took it even further by joining the Hustle Fund Fellow program.

This wasn't just about networking (though that's certainly a perk). This was about immersing himself in every aspect of the VC world, from sourcing deals to due diligence and everything in between.

The Shankar Sahu Playbook

Every investor places emphasis on some element of a startup's makeup, like their problem space or their GTM strategy. For Shankar, it's the team.

He looks for founders with that special something – a personal why, a hunger to succeed, and the tenacity to keep moving forward.

This focus on the human element, on the stories and drives behind the founders, has paid off big time. Over the last year, Shankar has sourced six deals that Hustle Fund invested in. That's about 10% of our yearly investments.

One of those deals, Alloy, is a startup digitizing the pawn shop experience. Alloy caught Shankar's eye not just because of its innovative approach, but because of the founder's personal connection to the problem they were solving.

That personal connection made Shankar believe that the founder would go the distance in building a disruptive billion-dollar company.

This is the Shankar Sahu difference. It's not just about the numbers or the market potential – it's about the people behind the ideas, and their capacity to turn those ideas into world-changing realities.

The Secret Sauce: Shankar's Deal Evaluation Process

So, we've seen how Shankar finds these promising startups. But how does he separate the good companies from the great ones?

First up, he leans heavily on the Hustle Fund Deal Assessment Framework. This is our comprehensive evaluation rubric:

1. Team

2. Market

3. Solution

4. Problem

5. Traction

Then Shankar adds his own ingredients to the mix:

• Market timing (Is the world ready for this solution?)

• Founder-market fit (Does this team have the unique insights and experience to tackle this problem?)

• Product signals (Is there evidence that this solution actually solves the problem?)

He's also laser-focused on the potential for creating velocity without burning through cash. To that end, he leans toward B2B plays over B2C, where the path to profitability is often clearer.

But perhaps the most crucial element of Shankar's evaluation process is his emphasis on understanding what needs to go right for a company to become a big business.

Lessons from the Shankar Sahu School of Investing

So, what can we learn from Shankar's approach? Quite a lot, actually.

1. Never stop learning: The startup world moves fast, and the only way to keep up is to stay curious and hungry for knowledge.

2. Look beyond the surface: While a strong team and a good idea are important, Shankar teaches us to dig deeper. Look for the personal stories, the burning passion, the "why" behind the venture. These are often the factors that separate the good startups from the great ones.

3. Add value early and often: Shankar doesn't just write checks – he gets involved. That could be brainstorming GTM strategies or making introductions to potential customers.

4. Develop a systematic approach: Having a structured evaluation process is a game-changer. It reduces the risk of getting swept up in the excitement of a flashy pitch.

5. Focus on your strengths: There is real value in developing deep expertise in specific sectors, like Shankar’s done with fintech. By deeply understanding the nuances of a particular industry, you can spot opportunities that others miss.

I'll leave you with some words from Shankar himself: "Every overnight success is years of blood and sweat."

Gross, but true.

And that's a wrap on 2024! Hope you've enjoyed our content this year. We'll see you all in 2025.

-Kera from Hustle Fund