I met Alireza Masrour a few Plug & Play events ago by a fortuitous fluke. He stood in for a marketing colleague who was out-of-pocket and in the process, introduced me to the jam-packed sessions across various industries from transportation, cyber-security, fintech, and more.
Masrour, general partner of the funding unicorn, Plug & Play Ventures, an innovative venture capitalist firm and platform that brings together the best startups and the world’s largest corporations.
By assisting over 20,000 startups with investment opportunities, Masrour has a deep knowledge of Silicon Valley’s influential investors and venture capitalists.
Some of Plug & Play’s investments led byhim were Kamcord, FiscalNote, Aarki, CreditSesame, and HealthPocket.
HealthPocket, was later acquired by Health Insurance Innovations; Matcha by Apple, PasswordBox by McAfee/Intel, TrustGo by Baidu, GNS3 by Solarwind. And others include Flyr, Shippo, Virool, Skytree, eyeIO and BookingPal to name a few.
But how did Plug & Play grow to this stature?
Plug & Play’s investments across these disciplines gave it the rich ecosystem needed to pull together this knowledge feast which doubled as a showcase for the fund’s startups to shine in front of co-investors and the broader community.
It’s a glimpse of how startup funding works, a topic that is more important than ever for entrepreneurs in fundraise mode today when seed has become the new A and IPO fizzles (Lyft, Uber) and unicorn implosions (WeWork, Practice Fusion) create a more cautious mood among VCs and raise the funding bar for founders, particularly those reaching for A and C funding.
To help entrepreneurs see funding from a veteran investor’s standpoint, Grit Daily spoke with Masrour for his north star when it comes to funding or passing on a startup seeking funding.
Grit Daily: What do you enjoy most about your job as a General Partner at Plug & Play Ventures?
Alireza Masrour: The more knowledge and insight you have in the VC world, the better your fund performs. At Plug and Play, we evaluate around 5,000 startups each year for investment. Evaluating this many startups adds to our collective insights and gives us the opportunity to meet many unique and intelligent people who dream up the future.
What makes me most excited about my work is getting to live in the future through the innovations portfolio entrepreneurs are building and delivering strong returns to my LPs.
GD: You have been remarkably prolific leading over 200 investments in the last 11 years. How many of those startups have exited? How have you been able to be so successful in identifying valuable startups?
AM: Plug & Play Ventures has invested in 9 unicorns with over $40 billion. Our success driven by is due diligence and care for the future of the startup, customers, and employees. Evaluating companies on these factors gives us a holistic view of the company. We partner for long-term growth and our successful exits allow us to earn the trust of other future unicorns inspired by our methods.
GD: What are your top takeaways from a decade in the VC industry?
AM: The more investment opportunities, the better the trend there is to find good companies for investments. If you want to invest in one or two of the industries – the more companies in those industries you see, the better you are positioned to make good investments. At the same time, the more investments you do, the more positive outcomes.
Traditional VCs are ownership sensitive, which sometimes limits them to be part of good companies. In general, they invest in 20 companies for the life of the fund. But since we do not take board seats and we don’t lead rounds, we have the opportunity to help more companies and be part of their success while going the founder friendly course of taking less ownership.
GD: How does your entrepreneur background help you to find the right startups to partner with and help them build for successful exits?
AM: Having been an entrepreneur gives you clarity and empathy to evaluate the reality of another entrepreneurs’ big dreams. Having walked their path helps you guide them through difficult decision-making around human issues like hiring, firing, and scaling.
GD: What’s your advice to entrepreneurs on pitching Play & Plug at the seed, A, B, and later stages?
AM: Share the concept and the business with as many investors and potential corporate partners as you can. They can give you the pros and cons of their approach. However, at the end, make sure you are the one that drives the future of your company.
GD: What do you look for when you evaluate a startup for investment? Are there specific areas of top interest for you?
AM: When evaluating the company, we consider the market size, the startups’ positioning in its industry, and lessons learned from previous failures., A major aspect of the final decision is the people – where they’ve been and where we think they can go. We are industry agnostic.