Author & Big Red Ventures Fund Manager: Ahilya Mehta
Hi Jenny, thank you so much for agreeing to do this interview. Before getting into the questions, I want readers to know a bit about you. You started your career as a financial professional at Goldman Sachs in the Investment Management Division before entering Venture Capital. It’s been about 10 years since you entered VC, first at Eniac Ventures where you focused primarily on seed stage investments before moving on to Supernode. You were the Managing Partner of Supernode Ventures after which you moved on to co-found your own fund, Four Acres Capital. Finally, before moving onto the questions, you were selected as “Venture Capital’s 40 Under 40 Rising Stars” in Venture Capital Journal and awarded “40 Under 40” by YJP.
I would love for you to share a bit about Four Acres and how you decided and went about setting up your own fund.
Thanks for the warm introduction. As you mentioned, I started my career in investment management where I was putting together portfolios of different asset classes. In 2015 tech startups were so nascent in NY and VC funds were so few and far between. I found myself spending all my time reading about early stage tech companies and once I realized there was a job out there where you could actually build a portfolio of these wildly fascinating companies I knew that’s what I wanted to do. I made it my mission to find an entryway into VC between the moment I was accepted into Columbia Business School and when I actually started school. I immediately quit my job at GS and interned at a startup called Minibar Delivery and then shortly thereafter when school started, I was introduced to Nihal Mehta, Founding GP at Eniac Ventures, who decided to take a bet on me back then.
I worked in VC for 8 years before founding Four Acres Capital. I met my partner Laurel at my former fund Supernode who had been angel investing in mostly B2B software companies after she had exited her own startup. After learning day in and day out from Nihal at Eniac, Laurel asked me if I wanted to partner with her and that title really gave me a platform to further network and engrain myself within the NYC tech/VC ecosystem. We invested together for several years before I went on to start Four Acres on my own.
How has your investment philosophy evolved over time at Four Acres, and what key lessons have you learned about identifying disruptive opportunities in today’s rapidly changing market?
When I first started at Eniac I was innately drawn to these consumer companies that I could really resonate with as a user. I remember how much fun it was to have an early peak into the a company’s development and test out the product with my friends and family. It still is super fun to learn about and play with new consumer software / apps but as an investor, I find it really hard to put money into something that doesn’t have a real technical moat apart from branding. My partner at Supernode had a background in media and she and I always used to discuss how fickle consumers are; I can’t get myself to put money behind a go-to-market strategy that revolves around ad-spend.
Since then, I have spent most of my time investing in less sexy B2B software companies. And as a rule of thumb, I will only invest in a company if I know my network can add significant value. I really need to be able to move the needle as an investor and I think founders are definitely privy to those that actually fully understand what he/she is building and can be thoughtful around ways in which to contribute. Founders really know the difference between ‘smart’ and ‘dumb’ money. I have realized the power of references that come from my portfolio company founders. Whether you’re a seed or growth stage investor, it is so competitive to get into deals and at the end of the day, the founder has the final say. My port co founders will vouch that while I may not be writing the biggest check, a lot of the time I’m one of the most, (if not the most) helpful investor and it makes all the difference.
In an era where innovation can sometimes outpace regulation or public understanding, how do you balance the need for breakthrough investments with the responsibility of risk management at Four Acres?
I mean that’s the thing with seed and preseed investing: this is the business of very high risk and very high reward (or high risk and no reward). You can try to check all of the boxes – strong technical moat, product market fit, market size, go-to-market strategy, competition, traction (if there is any), etc. But at the end of the day, as an early stage investor you really are investing in the management team and our job is to do as much work trying to get to know the founders, the synergies between them, do personal and professional references on them, etc. The company can pivot and the product can change. And that’s totally fine and something early stage investors have become comfortable with – but the bottom line is you need to believe that the founding team will be able to effectively and reliably ride out those changes and continue to overcome hurdles.
With Four Acres’ involvement in healthcare investments, what are the most transformative trends you’re observing in health tech, and where do you see the greatest opportunities for long-term impact?
We are seeing the impact of large language models (LLMs) in almost every vertical we invest in. Health tech is no exception. LLMs are transforming diagnostic processes and therapeutic decision-making. Their capacity to analyze vast medical records, interpret intricate clinical data, and provide valuable insights to clinicians is especially valuable – hence why we’re seeing so much adoption and interest right now. We invested in a company called Anterior that has built a platform with an AI-powered clinical co-pilot so that clinicians can spend less time on admin workflows and more time on their patients. They’ve started with prior authorization as their wedge and while it’s still so early, I’m incredibly excited to be on this journey with them.