Evolving DEI within Venture Capital with Gayatri Sarkar of Advaita Capital

Episode 50 Evolving DEI within Venture Capital with Gayatri Sarker of Advaita Capital
Transcript

Hessie Jones

So today we’re facing several headwinds in this fast-paced tech economy. This is global race to actually win in the advancement of artificial intelligence between the east and the West. However, what we’re finding is that there are these clear. Impediments that persist to drive change in our current technologies. That are hampering this speed to win. So there’s this realization of how brittle our systems are because of the homes that we’re seeing, whether or not it’s bias, whether or not it’s deep fakes or the pervasive scraping of data, this has actually permeated a lot of our platforms and communication systems, and it’s creating this increased risk. That we’re starting to see, that’s now resulting in a lot more regulatory attention, public awareness of the things that could potentially happen to ourselves individually. And this is in lock space with the pace at which technology is advancing. So welcome to tech uncensored, everyone. My name is Jesse Jones. Things like ethics, safety are now synonymous with diversity, equity and inclusion, and this has taken. A step front and center when it comes to AI because the technology is so pervasive across sectors, across culture, across society, it’s more important that we ensure that this technology works for everyone. And so this increasing awareness has bled into venture capital and companies that that continue to get funded are dominated by many of these large VC institutions that have historically not been diverse. So I’m just going to give you throw you a few stats on how DI has evolved. Within venture capital female representation, women represented 26% of the VC workforce in 2023. That’s actually increased from 50% from 2016. The good news is that the percentage of firms that actually reported they do not have female investment partners has actually decreased 257% and that’s down from 65% in in 2018. We’re also seeing an increase in in black employees within the VC space. But at the senior levels, black professionals. Only totaled 4%, which is slightly up from 2018 at 3%. What we’re also seeing is that nearly 50% of VC firms surveyed are actually incorporating DI Strategies in their organizations, and that is up significantly. From 50% in 2016. So these statistics start to highlight the ongoing efforts and challenges on improving DEI within the BC sector. I am pleased to have with me today Gayatri Sarkar. And she is the owner of at the at the ETA capital. I hope I’m pronouncing that right. One of the only growth VC funds in the US, and Gayatri is one of the few women LED POC, LED venture capital companies in an already. Tight industry. So we’re going to talk to Gayatri to talk about the state of the VC space, especially when it comes to disproportionate investment for underrepresented. Founders and and also the state of, I guess representation of women and women of color within within the VC space. We’ll talk about DI. Is it working? We’ll talk about our views on on AI, the AI industry where it’s headed, especially since her company is also investing in in. In AI, we’ll talk about her. Her company at the Etha capital, which is a series B fund. She has so many things going on. She has CVC, which is an organization that wants to level the playing field when it comes to curating women, diverse GP’s and LP’s to drive change within within the DEI. So, and we’re also going to talk about her most recent appointment to the Princess Grace Foundation of Monaco. So that’s going to be a lot welcome, Gayatri. 

Gayatri Sarkar 

Thank you so much. I know you for such a long time, but I’m in awe of the amazing work that you’re doing in AI and DI space and I’m so thankful that you have invited me to speak about it and I have not spoken to a podcast for a long time. I think the last one I spoken to. One of the aim podcasts for the Asian American LP GP community, and I’m excited to be here speaking with a friend and we have a lot to discuss. 

Hessie Jones 

We do. We have tons to discuss and I’m in all of the any woman, VC, especially at GP who has started a fund at a time when you know it seems like an uphill battle. So let let’s start with that. Let’s start about your journey to venture capital. How. How did you get here? What was your interest early on to move you towards where? You are today. 

Gayatri Sarkar 

Oh, wow, that’s quite a story. So I never wanted to be a venture capitalist as such or an entrepreneur, because I’m not only a VC, I’m also an entrepreneur. I I this is my fund, so I’m I’m an immigrant. I was doing my PhD in physics and got a job and then moved here. I worked in Hewlett-Packard, IBM, Goldman Sachs. Federal Reserve Bank guys to manage U.S. Treasuries assets for U.S. military Navy also a couple of large banks there, JP Morgan, PNC, GND visa after Federal Reserve Bank I was requested by a couple of large some of the largest hedge funds to join in US in London. And London was a separate, different conversation for my husband and and I decided at that point of time and I think. This was 2015 and I and I do believe there was some kind of a shift that happened cosmic shift because when you when you’re an immigrant and you. Moved to US. Your number one focus is that you want to make sure you maintain your status. Your status quo is your steady check and. So for me. After Federal Reserve, I realized that, you know, I don’t want to be. In the in the hedge fund world, I wanted to be more focused towards technology, but if there is an interest that I can do in technology advancement or finance and that’s when coming from the asset management background to help me a lot that I want to more focus towards venture capital. So I definitely think it’s a it’s a cost make shift. That told me. Like maybe I should think about venture capital. And because as I said, I was not growing up, so I want to be a VC or even while working in asset management, I never had that interest. So I worked in a few VC funds and then we had a small minority TMT fund which we sold it. Then I was working with a $40 billion. PE firm we were looking at a a $1 billion EI fund. Unfortunately, that didn’t go anywhere and that’s when I was thinking. You know, maybe I still have some mileage because I’m. I’m still pretty young for a GP to start their own farm and and one of the biggest catalyst of that decision maker was CVC. So when I was running my other funds, I started a podcast. And in those days, there were the concept of video podcast was not there, so podcast means it is very high profile like SiriusXM and all these things, people go to somebody’s office to do a podcast. And the concept of Zoom Video podcast did not. And this was before Black Lives Matter movement became such a big thing. My question was more like, you know, I come from a different background in tech, and I was a database architect. I was sometimes one of the few women in the room. And I was like, where are the woman ships and women? For peace. That was my first question and I was like why obviously there are many, but why don’t we hear from them and that’s when I started the CVC podcast and I used to invite all the GP’s. Uh women owned funds that have closed their funds and or woman LP’s that are running. Pension funds. So we had OMERS, we had a state Wisconsin board, we had you know some of the largest pension funds. We also had some great representations from as small as fun like Glasswing. It’s from Boston. To fund the funds like Cross Week from Utah to we have representations from General Catalyst and others. So I was very much focused on understanding. It’s like OK, representation matters and that’s how you start the conversation of capital. Deployment and capital liquids to power. As we all know and I wanted to hear from them, their journey and while going through that, I kind of realized that ohh wow, there are not many women. We’re working in the growth phase on the growth side of the venture and that’s when that stuck with me that maybe I want to do something in that space. I come from a tech background. So we talked internally and my husband was like this is what I was afraid of. I was kind of mini retired, had a young child. And I was thinking of much more focusing on raising a baby because I in my life at the time I kind of has done whatever I wanted to, and this is a something I should tell you while growing up, I never had a role model. Because my mom was a house maker and she’s amazing. But when I see my mother-in-law, she’s a Wall Street banker. She has worked in an area in a completely different time, but I wanted to grow up to be a receptionist or something like that or an astronaut. Astronaut did not work. I’m obsessed with space, but I was like, OK, being a reception. So I always see this Pretty Woman sitting at a corporate job, and I was like, that’s amazing. And this is where the problem in the society is that we don’t see much representations. So coming back. Yeah. And that’s how we started that Veda capital, the name Advaita means it’s I I come from an atheist family. But I found my own spirituality it it it came from. Of philosophy in the philosophy which means non duality. And if you think about quantum physics or Schrodinger’s cat, the Observer is deciding in which state we are, and that’s where it’s like. I cannot think about a better name that points towards the entire cosmic spiritual that exists, and the quantum physics of it all. Which is non duality. So I do believe you know space-time and other things work very differently some. Times and whether we live in a simulation or where we are, we just don’t know. But at the same time, I wanted to choose a name which was very unique and also most of the tiger. So quite other names are taken. So I named my farmer devera capital. So we invest from series C onwards. Our thesis is deep tech. We invest in technology that is advancing human race and decarbonization, focus and energy transition. So we invest in companies with 25,000,000 AR. We have invested in Canada also in one of the top generative I name. Our checks are 10 million. Onwards. But we can write 50 million plus checks as well. I’m based in Boston. We have some team members based in West Coast. We primarily invest in us little bit in Europe and Israel and we are hoping that down the road we can do a little bit of early growth of series. And be so that we can write further checks on the decarbonization focus that we have because there are not many companies to write checks who has 25,000,000 ARR in the decarbonization. 

Hessie Jones 

So. So you you had said something earlier about being one of the few funds that was actually in the growth stage of that venture capital? What were you? What were you seeing with the I I guess the other women GP’s were they more early stage and? What was? I would say, what was your foray into into the into the venture capital space? How was your firm received by those had been there for quite a long time? And you are now kind of stumbling into this community of this tightly knit group of I would assume a lot of them are Silicon Valley lead, you know, VC institutions. Tell me what that. Was like. 

Gayatri Sarkar 

  1. So that’s a that’s a lot. Of questions. So I think we. Are one of the few women. Person of color LED venture capital firm in the industry and in the growth side, not in the early stage side. There are some amazing women doing early stage venture capital. We decided as I said decided to focus on growth because of our background the team is. Very private equity. And we have a lot of Harvard, MIT PHD’s, Yale, under my CFO, she’s Yale undergrad Wharton. MBA’s 20 plus years of venture capital experience. So we come from a little bit of a large asset management background and we and also the deep tech background having that experience, we felt we are much more suited. To do what we can do. Plus there’s a black hole there and I think the main focus was like can we invest in more women and unfortunately there not. Woman out there in the growth stage and our main focus is investing in extreme outliers. The companies that are actually creating major growth and it’s going to be major outliers in the industry. So obviously, Jerry Vehi is one of the space ship designing again. Circular economy, but not in software SaaS space, but more in the heart deep tech. Please. And what was your other question? I forgot. Oh, fundraising. That so? I want to be mindful because I know my compliance don’t like to us to talk about fundraising. But we are a growth fund, so obviously fundraising is all institutional LP. It was very tough. It was very difficult. In order to have that conversation, but you know one thing I’ll tell you, I have a I’m a single child. I always say I have a single single child syndrome. If you want it, you go for it. And someone who studied physics and math, physics, math and economics, it’s like you need to understand the first principle thinking. Of how money moves, and one of the first decision we made is like we cannot take money from Ultra High net worth individuals. Or a smaller family offices because it’s a good fund. We need larger sum of capital. We need larger sum of capital for separately managed accounts for follow on for Co investment. So our thankfully all our LP’s are large institution. It took a long time to convince but one of the things I never compromised was our deals. We only invest in extreme. Outliers the best of the best and obviously some of the people we are competing on. The CAP tables are Sequoia, thrive and others. There are big existing firms, but you know, Once Upon a time, they also have started. So we think there is a new world order that is coming in venture capital space and we are happy to be a part of this right now because we believe that as you will see more changes will be coming in venture capital space. Some of the. Older farms are winding out. We are seeing it and newer farms are coming. Thing and they will establish themselves and that’s where we think we need to work really hard because the number one focus and you know in any asset management firm we we are a venture capital firm but we learn like an asset management firm is you know returning money for your limited partners and. And we don’t want to sway away from that because we are not doing any charity and we are investing. We are very much focused on what can we give back on our limited partner side and. We want to keep that goal, but also at the same time, we want to invest in the areas that we understand taking the risk. Mitigated approach is very important for us and we are extremely thankful. Sometimes I cannot believe that. We have support from so many institutional. From all around the world, but also the fact that they believed in us that we said that we are going to do it and we did it and they believed in us. One of the thing about success I’ve I’ve seen is just showing up. If you show up and you continuously. Deliver what you said you will. I think sometimes the limited part is like OK, you know, she said she’s gonna deliver and she’s delivering. It takes time. It takes a long effort because you’re talking about institution. One of the things that helps us that we all came from institutional background. But at the same time. You know, we said we’re going to deliver and we will deliver sometimes. Takes two to three years of conversion. Any part limited partners, but begin these are institution once. That’s. Yes, that’s a long term. Yes. And it’s a lot of capital that we can manage. But our focus is that we continue to stay in the lane where we think we will do the best also understanding the entire. Macro part that what works, what doesn’t work like we nowadays don’t invest in software and SaaS because we know there’s a big infrastructure shift is coming and that’s why we were at the right time. And and the right place to invest in infrastructure and the team coming from the deep tech background also helped.

Hessie Jones 

  1. I wanna touch on something about the fact that there are fewer women LED startup companies in the growth space in the growth. Side I’m I’m going to throw some some stats at you, would that that talks about this funding gap between males and females, white versus people of color. I want you to respond to it so. A few of. These few female founded companies represented 25% of the total VC deal count in the US. The proportion of the total deal like year over year remained flat at about 17%. These are women LED founders who are funded in Europe. Only 16% of general partners in the VC and VC firm. Well, women. So this is and. And here’s the other thing. Women LED startups still receive less than 3% of all VC investments. How do you respond to this? Like, it’s especially, I know DI is very I still I’d I’d say still nascent in the full scheme of things but do you think it’s working? Even incrementally.

Gayatri Sarkar 

So I’ll say the very first thing that we are talking about it it’s working that people see that there is a gap, but at the same time there’s a lot needs to be done. There’s so many women who had to IPO their companies after Series A and. B Racing because they could not raise. Series C series D Because there is no woman writing larger. Checks for them. This is a major issue. You look at. Stitch Fix. You look at others. Venture capital itself was a very nascent. Asset class. It was not even an asset class and I feel like it was more like, you know, the Silicon Valley, some of the funds that were writing checks and it was also very network based, it still it is, it is very hard to get into cap tables of certain companies somebody. Is advocating for you. Somebody is saying that no, this is a great company. Please take a check and we are still like we are a growth fund. So when we’re writing a check, it needs a lot of board approvals. You know, founder approvals and all these things. But I feel like. There are multiple issues associated with it, and it’s a systemic problem. One of the issue is that I’ll I’ll say is that there not many women running growth Fund is a big issue. When I started my firm and I will not name the consulting firm but we are on major consulting firms platform and one of them said that you know, why don’t you go and raise an early stage fund like raise a $20 million fund. Or like raise. A $50 million fund. And I was like. Our focus is to do growth. Why? Should I raise a $50 million fund? And and how many checks I can write and those checks will not even make any sense. Similarly, a lot of people said Ohh why don’t you raise a $10 million fund and then think about raising something bigger. But I was. Like, OK, We’re talking about completely different set of investments and one thing that you need to understand that the reason. I’m so glad we are having this conversation. Growth investment is completely different than early stage investments. We don’t as such invest in power under unless we have SoftBank kind of a money or tiger kind of money. But then we we’re seeing now what is happening when it’s have too much of money and you have this deployment push that you have to deploy in a certain period of time and you’re like, you know I don’t care. I will build an index fund that doesn’t work. That’s not how venture capital boards venture capital is all about ingenuity of the people. The founder. You cannot invest in a B team and and a product you have to invest in a team. If the product is a, that’s great. If the product is not a, it’s a B product. They can still make it as an A product. So it’s a continuous iterations. And we as an investor are big supporters of that iteration. Is that all I can say now? So many women that are in the early stage, they’re raising money and. I feel like. There’s a lot of support that is needed. For these women to come in the growth stage. But we are. I think seeing many women running early stage successful fund it means that we are doing something good and we will see a lot of these early stage funds, you know. Down the road. We’ll be raising series AB type funds as well. Done. There’s a lot of work that needs to be done, a lot of education that needs to be done, and also the idea is like if you’re a woman, that means you’re only doing fashion or some kind of a woman related stuff. I think that idea also needs to change, you know, whether it is our DNA. Sequence or various other things. Those are all done by woman. My favorite model is Mary Curie, the only person who has won Nobel Prize in physics and chemistry. So. I feel there’s a lot of work that has happened in the past. We need to keep continuously push this. To have seen more capital coming in the hands of women and also the institutionals to open up one thing I can say is that I received zero DI funding 0. And a lot of people expect ohh I I might be having a lot of dei money because I’m a woman person of color running a. Growth fund no. Most of my LP’s, or all of my LP’s, they don’t have as such. DI agenda, who invested in us, but did they back us because we’re a woman on fun? No, they back us because we have the best of the deals, but the reason I’m coming to the point is that I feel like there’s a lot of work that needs to be done at the systemic level. To see we. Give women more support. A lot of women, when they start their company like I had to startups of my own. I had a successful consulting startup. Then I was studying at Harvard. I did a tech startup that did not work out. And those were very, very early days. We are at Harvard Innovation Lab and some of the best pieces used to come and give us advice. We had some of those VC’s who are now, you know, very well known funds and they were like building their fund at that time, who came and gave us some great advices. But. It’s a it’s a long continuous journey. It’s not a Sprint and that’s why one of the thing what I can say is that even to see more women coming in the growth. Which we need to support that. The reason venture capital is where it is today, especially the Silicon Valley culture. The culture is all about even. If you fail, it’s OK. Because even if you fail, the idea is like you might be successful in your second startup. Third startup, 5th startup, 10th startup. The penalties vary less unless you’re doing some money laundering and other things, but. This is where the importance lies that the penalty of failure is less, but the reward for ingenuity is very, very high. And that’s where I think our mindset needs to be. I think for women, they also come up with. Like when our amazing, talented woman we see, we also like, OK. If you’re fundraising, so when are you planning to get married? Are you going to have your kids? Who’s going to look after your kids? This is the questions we get. And. If someone is asking you that question, remember they’re not gonna give you any money. Not a single help. He asked me who takes care of my child? You know, what does my husband do? Or if I am? Out there. Busy, who was managing my kit, who was managing my household. Those LP’s are not giving you a check because nobody’s asking that question to a man. I I think that there’s a lot needs to be done, but there’s a lot happening. There’s there’s check Warner. Car fund and there’s card line. Her fund. I think a lot of them GP’s that I’m naming their funds and now they’re supporting daycare. System to their founders. You know, I have a small child, my CFO. She has a nine month old and a two year old lot of women. Nowadays they have late children at late stage and because we were so busy with our career and I think just making that career changes. Or career flow to be sustainable, making sure that they have that support. We live in a very ludicrous time where I live in Massachusetts, Massachusetts. That’s have unpaid leave, maternity leave for unpaid for a month. I’m so glad I’m not poor and living in Massachusetts. I don’t know what I’ll do with the. One month on. Payment. So I think a woman body needs at least six months, you know, to get back to normal, giving birth to a child. And I think that’s what needs to be ingrained in lot of venture capital. Funds or corporates like how to support this talented, amazing woman who are coming back. Back into the field, I can go on and on on so much of about that. Yeah, but I need that support. Yeah. 

Hessie Jones 

I think so and this is me talking as a Canadian and we’ve we’ve evolved to the point where women now have one year of maternity leave and. 

Gayatri Sarkar 

Amazing. That’s a huge success than we Americans have. 

Hessie Jones 

My mom? Yeah. But there there, there’s a different mindset and Europe is even much more progressive than everyone else. When I was growing up, my mom had. Had six weeks. That’s almost equivalent to what the US has today. Is it not, or have? You got, you’ve. Gotten further than six weeks maternity leave. 

Gayatri Sarkar 

So Massachusetts has one month unpaid Med and Italy. So in my farm, if somebody’s working in my farm, we have unlimited sick leave and unlimited vacation. But again, venture capital is not work. It’s a lifestyle. So people are always working, but at the same time, we have given that unlimited option for somebody to take a break. I have such horror stories from Wall Street days. I was working with a limited partner and there’s a woman with whom I’m working and she was. She’s like gayatri. I need to tell you I’m pregnant. So I’m leaving the company. And I was like. What are you talking about? She’s like, yeah, I’m leaving the company. She’s one of the most talented woman I’ve seen. And she said because it is. I I spoke with my boss and he’s thought that this is much. This is obviously the firm has a very hedge fund style background. And there’s like, my boss said, this is. Much beneficial for me and for my career if I leave the fund instead of taking a long maternity leave, and I was. That is the most regressive, you know. Outlook I have heard and that’s where the things needs to change, you know. And I actually did not take money from that limited partner. I said I’m not gonna take your money because this is the kind of attitude you have. And she was the only woman in their work field. And she’s amazing. She was literally working travel. San Francisco to New York being six months pregnant. She was ready to. Do everything but her farm was not so. You know, so. Yeah, Harvard, MIT educated bosses, you know, right? 

Hessie Jones 

That really saddens. But I mean. That that to me is it’s it’s almost emblematic of like what women go through today. And I think I think that the mindset of a woman is always do things in the utmost. And and with men and. And I think from that perspective there’s there’s a bit of, I’d say confidence level that that that’s diminished compared to men because women have to always step up and be a certain level of perfection beyond what a man. Is proceed to be like the the one thing and I I just went came off a meeting and. We have a lot of founders that come to our accelerate. Better, but for the most part, we’re we’re still heavily weighted male and like it’s very difficult to get women to to say, hey, I need some help. Can I come and they, they are just as qualified, but they will wait until a certain point where they say I need help. But by that point. They’re so far along far beyond what some of these founders are at that they may not necessarily need as much help as as everyone else, but I think that’s the that’s what I find find with women in general. Is that they will have they have the higher threshold of pain and a lower confidence level to to be able to even ask for funding. What’s been your experience with that? I think. 

Gayatri Sarkar 

First of all, one thing I’ll say is that I think woman has imposter syndrome. That’s for sure. But one. There’s another thing I’ll say. I think this is an example given to a friend given to me by a friend that. A tree that bears most fruit. Is also bending a lot then a tree that has less fruit. So am women who are talented and has seen men who are also talented. They suffer from this whether. We are doing it right. I I have team of PHD’s from Harvard, MIT. They ask the maximum amount of questions and like am I doing right? Is this wrong? Is this right? And I think when you see talented women at Workspace asking those questions or having self doubts because they have, you know, more information data among themselves and making sure that they are at their best. But I feel. There is a obviously different way the society is judging us, and many of us, including me, are standing. Over the amazing work that is done by women, I mean I I I was telling you, like, my mother-in-law. She’s a Wall Street banker. She is one of the few person of color she she does not look much Indian but she’s one of the few person of color in the 70s and 80s working in the bank. People and she has a very. Normal name. Her name is Maya, and nobody used to even take her name properly. That was the easiest name and people used to confuse her. Whether she’s Mexican or, you know, or Middle Eastern. And then she the biggest issue with with her is that she was told multiple times. Bring a male coworker so that we can have a conversation with you. Whether it’s a closing of a deal or other, so or people will use profanity in front of her face. That was Wall Street, you know, and we have come a long way. She was all put into accent training. I. And and and. This is the funniest thing I want to say is that my mother-in-law, even if I say that. And she’s like. But you know they. Paid for it. 

Hessie Jones 

Oh my goodness. I I think it’s. 

Gayatri Sarkar 

It’s a different world, you know, and think about people like us now. Nowadays I don’t have to worry about, hey, where is your male coworker? And then I’m going to invest in your fund. So. So that’s why I said like, there are progress that is happening, but it is going to take some time. And and I feel and I’m very optimistic about it, it is not going to happen at a. Super fast pace. Because at the end of the day, we are dealing with not AI, but human beings. And I think there are more mind shift that needs to be changed and this change needs to come organically. I think the biggest change that we see and we were discussing like. As a millennial parent, my as I was saying, my husband is more involved in raising my child. He has done more diaper changes than me where our parents, my dad, was never involved. His father was never involved and my mother-in-law managing Wall Street and raising a kid. So it’s a different time that we are living right now there are. Being just happy and I’m very optimistic about it. That’s all I can say. 

Hessie jones 

  1. No, that’s good. I don’t want to beat that to death because. I know I understand, like even in today’s. Stats it’s very, very. Difficult to for a woman to to raise money, especially if they only have, let’s say, a female female investor that that invested with them in the first round to to get to a second round is almost less likely unless there’s a man. Sorry, a male involved in the first investment round. That’s a stat that I I’ll put out there and I know things will get better, but I wanted to. I want to shift a little bit and talk about technology because. You have this passion for for that these types of technologies that we’re investing in, in the future and I want you to talk about it. Generated AI, there’s there’s been the launch of Sora most recently with open AI and now the ability for to. Develop video from. And you know, you’ve seen the growth of Gemini. You’ve seen a lot of some of the innovations that that are taking place like crazy when it comes to natural language processing that did within general today, where do you think it’s all going and what are? You excited about?

Gayatri Sarkar 

  1. So I come back to our thesis, which is our infrastructure thesis that we believe that we are living in the time of 60s and 70s. The changes that happen and led to the huge growth of Internet, we’re living right now. So this is the next 2530 years. We are going to see the growth of not only just computing power through. The AI but also this will lead to changes in you know opportunistic growth in quantum physics. I mean quantum computing, because we know the laws of physics is kind of a hindrance when it comes to quantum. Putting lot of growth in chip designing, we might see finally, you know, interplanetary travel or something like that or flying cars. And I hope that happens because I feel we are living in a time of a huge infrastructure growth and a lot of infrastructure tech investment is going to happen. The real Silicon Valley. And we were like, OK, where is the Silicon Valley because everybody is investing in app and I think that change is coming right now that we will see, you know, the rise of silicon valleys again. That is right now with open AI X AI or other companies that we are seeing. So I’m definitely positive and that we are living in a time and I’m so glad I’m living in a time where I’m an investor in this space that we get to see so many things. Somebody who studied physics and we have a team of engineers. For us, this is like a huge playground to learn, go through things like yesterday I had more than an hour long session with my team and you know, these are the people we have also former Google, Deep brain scientist in our team. And we were all brainstorming on certain ideas, like OK, for our next investments. Where do you think see the movements coming because for us it’s like when we look at an investment, we just don’t look at a product. Oh, this is a great product. Let’s invest. We want to understand from a macro scale how the changes are happening in the infrastructure AI space. And we want to understand where this fits and there are different thesis they’re different analogy. So I think generative AI. Is at a very, very early phase. We are we are at a phase where it is more crawling and that’s why we are like just like kids, we are like, oh, wow, we can transfer. We can literally translate text into video, text into picture. So. So definitely at a very early stage. And then as when I wear an investor hat, I want to understand where we can actually make money and how. Which are the companies that are sustainable and which are the companies that have some kind of corporate governance to make things sustainable. And obviously there is this. A focus towards open source, closed source and we want to make sure that as an investor where we can make sure have the good return.

Hessie Jones 

So how much of your LP’s, by the way, how much of them care about a portfolio that has? Some kind of, let’s say DEI measurement. Around it like did it is there. Is that going to be injected as one one of the things that your your LP’s will be looking for in terms of how you invest your money? 

Gayatri Sarkar 

Great question. So one of the thing I want to say is that you don’t want to. Be the GP. Where your mission, your ethos, and your thesis is driven by LP’s, my LP’s don’t care, but. One of the reason they chose us also, they know that we care. I’m not going to invest in a company where there’s they could not find a single woman in their team. One of the biggest example is that we were looking at a company and they were serial entrepreneurs. They were kind of billionaires. They had a huge successful. And not they named the company they came out of that company and started. Not a generative AI company, but an AI company that has some defense tech alongside it. And and I asked them I it’s like I love your team, but you could not find a single talented woman in your team. And and he said that. Yeah. Actually we are in part of a country. The which happens to be Connecticut, not very far from where I’m living right now. There are not many talented women, you know we couldn’t find and that’s why we couldn’t hire. But we do have a. Receptionist or I think executive assistant and and I feel like that was not the right answer. It’s OK that you can say that you know. We did not do a good job. In searching for great talent who also happens to be a woman, I run a farm where my entire team is diverse and we all come from great schools and great experiences, and you don’t have to go and say, oh, it’s time to go and look out for. A woman or a person of color, and this is where I think the diversity is failing you. Just like, OK, let me have talented people in my team, but they also happen to. Be a woman so and and and I feel like his answer should have been like, you know, we didn’t do a good job. But I think we will try to find more great talents but not. But the answer is like Oh no, there’s no talent. You know where we’re living and where we’re finding that’s not the right answer. Decided not to invest in that company also. That company was also because it was not an extreme liar outlier. We don’t invest in a company because the company needs to have a diverse diversity mandate. But when we talk to the founders, we try to understand how they look. The world because 50% of the. Population is female, so how you’re looking at your consumers and we are enterprise focused venture capital firm. So we try to understand if we have the similar ethos, the mentality. I know nowadays the IT gets a lot of bashing but I think there should not be dearth of meritocracy and there are some amazing woman. That are coming out of every field. It should not be like you remove two women from your board and the company is working perfect. So we are seeing a lot of such examples and but I hope that. There are changes coming and there will be further changes, but yes, the mandate is not coming from our LP’s. This is our own personal ethos. When we ask questions, we also ask questions like what’s your data privacy. You know, we have invested in one of the top generative AI company because they have a strong focus to generate data privacy. We also ask questions like, what’s your carbon footprint? You know, what are you doing in terms of carbon footprint tracking? And these are the questions that I think every VC should ask, but this is part of our ethos, our operational excellence and I think we cannot keep injecting money in companies who will keep on training models. God knows how long so. We are trying to understand the space from a scientist standpoint of view and also from an investor standpoint of view and also from macro analysis, how the market is going to evolve. So we are in a disruption phase, so anything can happen. There might be a lot of change. Just, but I just don’t want the law of large numbers to prevail, so that money is only accumulated to Microsoft, Amazon, Google and Facebook. And then there’s a trouble because they have, you know, not only lot of capital, they also have the consumer base, clients, customer base to gather. So much of data, so it will be interesting to see how the generative AI prevails, because it’s also. Training data. Having access to this raw data is very important and I think which founder has access to those raw data, so it will be interesting to see and one thing that I want to highlight is that this is we were discussing last year. I mean yes, last night is that. The disruption that’s gonna happen, we don’t know whether it’s an AGI or some other way, but whatever it is and we I can go extremely technical about it. But. We need to give time to this space. I know there’s too much focus. Hey, let’s go to the market. And also there is this focus or let’s inflate our valuation because we also need to keep on raising money to train our Elms. So we will see like who has the first mover advantage, who is making this smart move because if you’re not the best. Then you cannot play in this space and also as an investor you need a lot of capital to in order. To invest in this space as well. So yeah, we are trying to take various game theory approach and various standpoint view to understand that who will be the winners. I’m glad I’m in this space as an investor as an audience. Just trying to make sure we take very risk mitigated. Approach so that you know there’s not much of a loss for us and there’s more betting on good founders and we can be a good supporter to those founders and be rightly their, you know, partners in making. Assure that when it comes to building great products, right mindset is set. Not what we’re seeing with few other things that we were discussing before. 

Hessie Jones 

Yeah, I’m glad that you’re. You’re actually kind of stepping out of the, I guess the the common fold and asking questions. That maybe some VC’s may not be asking right because it it is a balance between. I mean, how how fast can you grow? How fast can you actually deliver this? What is your revenue stream? But now can we do this in a way that’s not going to harm this type of population or etcetera, right? There is a responsibility from that perspective. OK. So I know we’re kind of running out of time. I do want to get to 1. Questions about your most recent appointment as a Crown crown patron for the Princess Grace Foundation of Monaco. So can you tell me about about? That that sounds so. 

Gayatri Sarkar 

Fascinating. Yeah. Thank you. So we have been working with Prince Williams Foundation because we are an official nominator of a short prize and then Prince Albert of Monaco has a similar ethos when it comes to climate change. He’s a big he has a big focus towards ocean tech. And we as a growth investor, we are keenly looking at the blue text space to understand there’s a lot of R&D. That goes into it, and as we understand the space, it was a great opportunity for us for me to be a Crown patron of Princess Grace Foundation, which is Prince Albert’s mother. But the main focus of the foundation is that how can we enable, you know? Underserved communities in the artist space. Who can be the next Oscar winners, Grammy winners and some of the other Crown patrons are John Paulson, Leslie Odom Junior, Chuck Royce, Lady Tina Green, John Chu who is the. Director of Crazy Rich Asians. He’s also one of the actually previous winners of the scholarship from the foundation. So one of the thing that interested me into this, as you know, general. Right. It’s going to disrupt many spaces, but the very first. Space is the. The Hollywood industry, the films and others, so we want to see that what we can do to make sure we can be much more, you know, mindful of the disruption that is happening in the world, but also at the same time. Understand how the AI space is moving me as an investor looking at this opportunistic world. But you know we are looking at this more of philanthropic approach for us and also working with Prince Albert’s Foundation on many of his climate change space. 

Hessie Jones 

Yeah, I’m looking forward to seeing like, how how that’s going to be deployed and the and the types of I guess, artists and projects that that are going to come out of it and how they’re going to thrive in. The coming years. So thank you. Thank you so much. 

Gayatri Sarkar 

Can I just add one more thing that the few things that I wanna touch base on? That when we talk about diversity, equity, inclusion and that has been the theme of our discussion, I want to say that it’s a long, it’s going to take a long time and a long process, but we also need to be making sure when we are deploying capital in the diversity, equity inclusion. Space, where is the accountability? If somebody is giving you the dei money? Is there an accountability towards it? The reason I’m talking this about because we just saw Goldman Sachs JP Morgan coming away from the climate action 100 and again they raised a lot of climate fund and currently them coming out of it. There is no accountability. Similarly, Goldman Sachs also had a launch. Platform, which was also a DI focus. So one of the thing I want to highlight is. That to a lot of institutions where the pensions are others, if you are focusing on investing money in a diverse GP, go and do that, invest in a fund that is owned by a diverse GP rather than allocating the capital to thousand other middle layers, then that gets dedicated to you have no accountability for. And then the output looks bad. It’s the same situation where Black Rock and others said that you know I’m going to invest in ESG, but actually it ended up investing in oil and gas, but in a better scenario. So I what I want to highlight most in this today’s world, it’s like we need to be mindful. Everything starts with good intention. Investing in climate, investing in diverse founders, investing in diverse funds. But in the process we get lost like we have seen. There’s so much of backlash coming out of, you know, whether it’s charging PT or Gemini. I’m sure they started with a good intention that. I want to have a very diverse, inclusive thing, but diversity also means that you are including everybody you know, so you’re not also giving non accurate pictures of historical representations, because I think that is where I. Like we need a lot of work and that’s why there’s so much of backlash. It’s not a binary state. This is I want to highlight, is that like, I know the government is suing SpaceX and others for them not having, you know, immigrant workers. But again, that’s a very high end space. Where you need to, everything needs to be tight lipped so somebody who has worked at Federal Reserve Bank, I can totally understand that. So that’s why I want to highlight is that we live in a space where it is our continuous journey. So we should not feel like we have reached that journey or we have deployed the capital I am. Going to deploy 1 billion capital to DI Space, 1 billion capital to climate takes. But that’s where my accountability stops. No, you should go and check it out. What is the output? The output should not be what is happening with Jamie 91.5. Where there’s a complete misrepresentation of history. So I think we need to make sure we there’s a proper. Accountability of what you are doing. There is a meritocracy attached to it, and it’s a long process. It’s a long journey and it will take us a long time to reach there. 

 

Hessie Jones 

It will. It will. I mean, let let’s let’s just say that you live in the United States of America, which is a capitalistic. Country and there there is still very much the value to appeal to the shareholders, right and shareholders. You know what they care about. So it’s that balance that you talked about. And so for for me as someone who also invests in company but also. In in companies that early stage startups it it’s about the value that you bring. And when people say that whose values are attached to to that output, there needs to be a there needs to be one that actually represents humanity. That means they need to have a vote and then whether or not that that’s part of that vote is with the VC company or with the technology or the company who’s actually building the technology. It has to be there. So thank you so much for for providing your insights, because I think what you said today. Shows that there’s at least one company that’s thinking about all of this from a collective perspective. And and there needs to be. I think you need to influence a lot more of the VC community to think to think this way because yes, there is, there is the ROI behind it. But there is definitely a human aspect that, that, that is going to impact all of us. So thank you. Thank you. 

Gayatri Sarkar 

Once, say, before I go is that don’t take a binary approach to this. It’s not. So this is what I hear from this. The polarized binary approach. It will take a long time and it will take a lot of learn. And feedback. 

Hessie Jones 

Absolutely on that note. Thank you Gayatri for your time. I think there there is going to be a lot of hope. I Ihave a lot of hope in the technology that that is advancing today, but it’s going to be in lockstep with the critical oversight with the responsibility that comes with investment. And so that means this in that this sector actually has to evolve with the times. And I know that will happen. So thank you. So for our audience, if you have any topics that you want us to cover in the future like this one, please, please e-mail us at communications@altitudeaccelerator.ca. That’s all we have time for today. And I think again, my guest guy Teresa, our car in the meantime. Everyone have fun, have fun and stay safe. 

Host Information

Hessie Jones is an Author, Strategist, Investor and Data Privacy Practitioner, advocating for human-centred AI, education and the ethical distribution of AI in this era of transformation. 

She currently serves as the Innovations Manager at Altitude Accelerator. She provides the necessary support for Altitude Accelerator’s programs including Incubator and Investor Readiness. She will be the liaison among key stakeholders to provide operational support and ultimately drive founder success. 

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