Meet the Mind: Sumant Mandal, March Capital Partners
IN BASEBALL, THEY say if a batter fails 70 percent of the time, he’s a future Hall of Famer. In venture capital, maybe we should be viewing the numbers similarly. Actually, VC success is probably harder: as recently as 2017, 75 percent of venture-backed startups were failing, according to one Harvard Business School study. So in that light, the career of Sumant Mandal, managing director and co-founder of March Capital Partners, is downright Hall-worthy.
Throughout two decades of investing, Mandal has incubated more than 25 companies, including CrowdStrike (cybersecurity pros who’ve notably been hired to research breaches for clients like Sony Pictures and the Democratic National Committee). He’s also been part of acquisitions involving heavy hitters like Cisco and Google. Mandal and March show no signs of slowing down, either. Early last year, the LA-based investment firm announced it raised $300 million for its latest fund.
To maintain that kind of long-term success in such a volatile industry, it helps to develop specialities. And for Mandal, those specialties have largely been in tech— specifically enterprise-focused areas like Internet of Things or artificial intelligence and Machine Learning platforms. Yet ask Mandal, and he says finding success in the startup world isn’t really about knowing any particular technology inside and out. Instead, over the years he’s found the most consistent characteristic of successful companies seems to be how the people involved apply that tech. How will some useful tech like AI be packaged for customers, distributed to customers, and ultimately consumed by customers?
“Now I’m not a food industry investor, so if you ask me to go out and make a judgment on that I’ll probably make a mistake,” he says. “But tech by itself is not an investment for us, either. What is an interesting investment is someone who can apply technology—a subject matter expert on the application of that tech. So you have to look for examples and companies with fundamental skill sets in how tech can be applied. They also need people with a keen understanding of the pain point trying to be solved, because as far as I’m concerned or customers are concerned, they don’t care how you solve the problems—they just want to make sure you have access to the most efficient way to solve it.”
As a recent example, Mandal and March headlined the Series C fundraising round announcement at SparkCognition last fall. What attracted Mandal to this AI start-up wasn’t merely the use of bleeding-edge technology; rather SparkCognition saw the security use case for AI, among its other applications, and developed an easy-to-use platform for customers needing cybersecurity help. And by routinely focusing on similarly nuanced opportunities for investing, Mandal has been able to identify companies just on the cusp of success that are ripe for partnership—even as the in vogue tech of the day constantly evolves.
“Every five to ten years, there seems to be a shift in underlying tech,” he says, reflecting on his investing tenure. “In the early 2000s, it was about the internet. The mid-2000s were about mobility and the advent of smartphones, while the end of the 2000s saw a rise in cloud computing. I think the last five years has probably been about AI. [Whatever the next shift is], it’ll present opportunities to reinvent how people use tech, create applications that deliver tech, and change how people consume tech.”
That constantly shifting tech landscape has taught Mandal another valuable lesson when it comes to succeeding in venture capitalism. “The secret to what we do as investors is to always have a point of view on what the future looks like,” he admits. “And to have that, you have to be well versed in what’s happening today and where things are headed. The good news is you’re constantly surrounded by people with a passion to go solve some problem. Almost by themselves, the people we work with inspire you to help them and find others like them. So it’s very intellectually stimulating, things are constantly changing and you’re always evaluating where things are headed.”
That does ultimately mean leveraging expertise—just not always Mandal’s own. Venture capitalism has instead proven to be a relationship business in this industry veteran’s eyes. Initially, that means meeting and maintaining relationships with execs at leading companies or academics at research institutions to learn where those in-the-know foresee a particular industry going. “One of the early lessons I learned was rather than be the expert, you should know the expert,” Mandal says. “You can’t be an expert on everything, but we have access to a broad base of people with deep knowledge in the areas we’re interested in.
“So rather than getting caught up in the tech itself, what matters to us is how is it being applied and how is it solving a customer pain point?” Mandal continues. “That insight comes from talking to customers, learning how tech is working for them and solving their pain. That’s the more important part.”
After that initial investment is made, things shift toward Mandal finding the type of relationship that can best help a new partner. “If you naturally have an entrepreneurial ability or desire, it’s two sides of the same coin,” he says. “You end up either being an entrepreneur or you end up helping entrepreneurs.” Sometimes an entrepreneur has such a defined vision and belief system that not much interaction is needed. But Mandal has discovered being a founder or CEO can often be a lonelier role that does need some external support. So the job of a venture capitalist doesn’t end once a check is promised; instead Mandal gauges whether a new partner needs an occasional sounding board to talk through decisions and insecurities or perhaps (as in the case of SparkCognition) a board member who can advise on what a particular investment requires for success.
“The money is just a means to help people get to the next level,” Mandal says. “It’s our time getting involved—through relationships, pattern matching, introducing potential employees. That’s where we add the value.”