A Bangladeshi Perspective on Working in Silicon Valley VC

Conversation with Tasnia Huque, Principal at Javelin Venture Partners, home to seven unicorns.

We caught up with Tasnia Huque, Principal at Javelin Venture Partners. Javelin is renowned for its strategic investments in early-stage startups across a diverse range of industries, including cloud computing, data analytics, enterprise software, education, automotive finance, retail, and digital media. 

Tasnia's work involves identifying and cultivating new investment prospects, as well as overseeing portfolios within the future of work and consumer internet realms. She also provides support to Javelin's partners in key sectors such as proptech, fintech, B2B SaaS and web3. With an impressive background encompassing over a decade of experience in technology and capital advisory, Tasnia's contributions have significantly shaped the success of Javelin and the ventures it supports.

We heard from her on:

• Her personal background

• Experience in her roles as an operator and investor

• Differences she found in working between Private Equity and Venture Capital

• Javelin’s investment strategy

• How she sources analyses and supports companies within Javelin

• Her thoughts on the Bangladeshi Market and areas of investment

• Advice for young people 

  

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💼 Actionable insights

If you only have a few minutes to spare, here's a summary of our key takeaways and highlights from the episode:

During my career journey, I had the opportunity to explore various industries, including consumer, industrials, and technology. While working in the mergers and acquisitions group at Barclays, I gained exposure to different business models and saw the unique characteristics of the software industry. I was fascinated by the scalability and high-profit margins that software companies can achieve. I also realized that the technology industry requires constant innovation to stay relevant, as seen in the example of BlackBerry. This realization led me to venture capital, where I could support founders and evaluate businesses for potential funding. While I considered becoming a founder myself, I developed immense respect for the challenges they face…I believe gaining operating experience has been invaluable in my role as an investor.

Venture capital and private equity are fundamentally different asset classes, each with their unique characteristics. In VC, minority ownership is sought (10%-20%), aiming for high-risk, high-reward outcomes. Investments are made in early-stage companies based on potential and founder vision, with limited data. VC diligence involves predicting future trends and growth potential. In contrast, PE involves majority ownership and deep diligence, targeting mature businesses with established cash flows. Stable and predictable growth is emphasized over rapid expansion. PE portfolios have fewer companies (8-10), allowing concentrated efforts. VC requires quick decisions with limited information, carrying higher risk but potential for substantial returns. Conviction in achieving 10x returns is crucial. VC seeks stable growth, aiming to turn a dollar into two or three, providing consistent returns with lower risk. The choice between VC and PE depends on personal preference and alignment with investment philosophy—VC offers diverse opportunities and creates new categories, while PE provides structured and predictable growth.

Javelin distinguishes itself as a traditional venture capital firm, leveraging funds from LPs such as pension funds, family offices and high-net-worth individuals. Unlike corporate venture capital entities, Javelin's investment strategy is not driven by a specific strategic agenda tied to a core business. Instead, the firm operates using LP capital rather than its own balance sheet, allowing for greater flexibility and independence in investment decisions. We follow the industry-standard ‘two and twenty’ model, where a portion of the raised capital covers operational expenses, and the partners receive 20% of the profits generated by successful investments as carried interest. We focus on identifying startups that exhibit promising signals even before they have significant traction. While quantifying these signals can be challenging at the early stage, the firm looks for indications such as user growth and retention rates, user engagement metrics like time spent on the platform, successful partnerships with key stakeholders, and key financial ratios like customer acquisition cost (CAC) to lifetime value (LTV) ratio.

Our venture capital firm relies on referrals from other VC firms, particularly for pre-seed and seed stage startups, as our primary source of deal flow. These referrals often come from their portfolio companies seeking the next round of financing. Our strong networks from top universities and our previous operational experience also contribute to generating deal opportunities. However, conferences have limited relevance at the early stage, and cold emails have proven less effective. We evaluate potential investments by assessing the founder's pitch and storytelling abilities, market size, product differentiation, potential behavioral changes, pricing sustainability, retention rates, and founder quality. Our decision-making involves team discussions, and ultimately, one or two team members must have high conviction in the business's revenue growth potential. We provide thoughtful feedback to founders, even in cases of rejection, with clear and constructive reasons. Our selectivity ensures we focus on areas where we can add value and have a positive impact.

Taking into account the largest industries in Dhaka, such as weddings, garments manufacturing and developing software solutions that enhance their efficiency is an interesting approach. By understanding the local context and incorporating cultural elements, you can create products or services that resonate with the target market in Bangladesh. Additionally, focusing on climate tech and circular economy solutions aligns with the global trend towards sustainability. Addressing the pressing need for recycling and incentivizing behavior change in Taka can have a significant impact. Developing software that simplifies and encourages recycling practices could be a valuable contribution to the community and potentially scalable to other markets facing similar challenges.

It's important to prioritize personal fulfilment and aligning your career with your strengths and interests. Following your passion and finding a job that brings you joy and satisfaction is crucial for long-term success and happiness. Remaining curious and open to learning is an excellent mindset to cultivate throughout your career. Embracing opportunities to expand your knowledge and skill set, even in seemingly mundane tasks, can lead to valuable experiences and growth. Engaging with communities, attending sessions, and connecting with mentors are great ways to network, gain knowledge, and find support on your career journey. Your willingness to be a resource and offer assistance to others is commendable, as mentorship and guidance can make a significant impact on someone's professional development.

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