Rashmi Gopinath was Nagraj Kashyap’s third hire in July as he built corporate venturing unit Microsoft Ventures from the ground up last year. Tasked with covering the wide area of enterprise software, which includes cloud and infrastructure, big data, analytics, databases, software-as-a-service and business applications, internet of things, security and mobile, she hit the ground running.
Gopinath said: “At Microsoft, my first investment was in a highly competitive and oversubscribed [$33.5m] deal at Paxata, an enterprise information management startup. My prior relationship with the founding team helped me secure a meaningful investment slot for Microsoft in a deal led by Intel with participation from Deutsche Telekom, Cisco, In-Q-Tel, and Accel, among other investors.
“I met Prakash [Nanduri, co-founder and CEO of Paxata] in 2012 when I was at Intel Capital. He was in the process of raising his series A. I have stayed in touch with him since then and continued to help the team along the way.”
Her other board roles while at Microsoft include its stealth deals for CloudLanes, a cloud-managed archival service, at its seed stage, and Tactile, a mobile sales productivity platform set up by a former Salesforce executive, during its B round, she added.
It was a natural hire for Kashyap to make Gopinath an investing partner at Microsoft Ventures, as she had been part of the investing team at Intel Capital from 2011 to 2013 and then run two startups’ global operations.
Gopinath said: “At Intel Capital, I worked on seven deals across cloud, infrastructure, security, mobile and analytics. I invested in Maginatics, a distributed software-defined storage startup founded by a highly successful serial entrepreneur, which was acquired by EMC within two years of investment [by Intel in its $6m B round].
“One of my other investments was in a wearables startup called Basis Science, which was acquired by Intel [reportedly for about $100m] within five months of investment. I was also able to source and invest in a number of highly-competitive deals, including an investment in MongoDB.”
The other four deals while at Intel Capital were BlueData, a big data private cloud provider, Apperian, an enterprise mobile application management tool, ForeScout, an automated network access control service, and Arrayent, an internet-of-things software platform.
Between Intel Capital and Microsoft Ventures, she was in global business development for Couchbase, a US-based NoSQL database provider, and BlueData.
Gopinath said: “At Couchbase, I built and led global alliances and channel partnerships for Couchbase’s partner ecosystem of over 200 partners, and contributed 30% of the sales pipeline through partner-led deals at Fortune 500 customers.
“At BlueData, I was the first business hire and member of the core executive team leading all outbound activities, such as customer acquisition, partner acquisition and development, company and product launch, marketing and fundraising.”
Having previously worked on products for large corporations GE Healthcare and Oracle before her MBA, Gopinath said what had attracted her to corporate venture capital and then back again after working for startups was the ability to provide strategic benefits.
She added: “I joined Intel Capital right after graduating from business school. During my MBA program at Kellogg [School of Management], I had the opportunity to intern with Galen Partners, a healthcare growth equity fund, and WMG Capital, a private equity fund.
“My experience at these funds coupled with my finance and investment classes at Kellogg helped shape my focus and interest in a VC career. While exploring options at multiple VC funds, I found the benefits of CVCs highly appealing. The biggest value-add for corporate investors is the ability to provide highly-meaningful long-term strategic benefits to portfolio companies through various assets available in the corporation.
“During my time at Intel Capital and Microsoft, I have seen first-hand and experienced how important and valuable it is for startups to get connected with the right product teams at large companies to build meaningful partnerships, get access to global markets through commercial teams and well laid-out go-to-market plans and, last but not least, having a great well-recognised corporate investor backing them that significantly adds to a startup’s credibility.
“These benefits cannot be matched by any financial VCs, even those that typically either employ a large team of supporting members – such as Andreessen Horowitz – or work through their partners’ personal network to connect startups with product leaders at large corporations.”
Despite these strategic benefits, Gopinath said she still found herself having to deal with a lack of understanding about CVC. She said: “One of the biggest challenges that I encounter as a CVC investor is dispelling the misconception that CVCs are not good investors to bring into a competitive deal.
“This mainly arises due to a generalisation of notions, such as ‘all CVCs will always require non-standard terms’, such as right of first refusal [to buy a company], and will use that to block attractive acquisition offers, or they may not participate at pro rata in future rounds due to changes in business unit strategies’, and are ‘not financially driven’. CVCs, such as Intel Capital and Google Ventures, have striven hard to change this perception, but this is an area in which I find myself constantly educating institutional investors and entrepreneurs that have not worked with CVCs in the past.”
But Gopinath said the best way to correct such impressions was through performance and working together as an industry. She said: “My professional ambition is to make Microsoft the number-one global CVC fund. I believe we can achieve this goal collectively as a team by continuing to make solid investments in highly-disruptive startups and simultaneously delivering on our promise to provide strategic value through Microsoft assets to help these portfolio companies scale and succeed.
“There is a significant shift in the industry towards a more positive perception of CVCs. This is also evident in the number of CVCs created in 2016 and the increasing number of deals CVCs are leading or participating in.
“In order for CVCs to become even stronger, I believe there are four things we can do better – share best practices with each other, work well together in a cooperative manner, set standards for general purpose corporate investing principles, and build a strong network with other CVCs and financial VCs.”
It is a collaborative approach that is reflected in her personal life, too. Gopinath said: “In my spare time, I like to spend time with my family and give back to the community.
“I have a very active five-year-old daughter and spend time travelling with her and exposing her to new cultures and places. Personally, I care deeply about science, technology, engineering and mathematics education for girls and children’s education, and volunteer with local organisations.”