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Sunny Midha is a venture capital firm based in Los Angeles, USA, and is director of Principia Growth, a venture capital fund focused on B2B/business technologies such as cloud computing, machine learning, computer vision, mobility, robotics and consumer distribution platforms. Sunny has over 10 years of experience in M&A, capital markets, restructurings and venture capital on multiple platforms, at Deutsche Bank (London), Houlihan Lokey (NYC), Greycroft (LA) and Amplify.LA (LA). He holds a BA in Economics from the London School of Economics, an MBA from the University of Southern California and an MA in Analysis from Harrisburg University. He is a BAFTA scientist and a passionate filmmaker who has received many awards at short film festivals. Sunshine stocks are…
Many founders don’t integrate analysis into a company’s ethics from day one. They think it takes resources away from them to build a product, but I would say that analysis is part of product development in today’s world. Create KPI trackers and use them daily in all departments to develop and improve your product.
Work with the right people. If you work with people who don’t believe in your mission, you’ll end up in the wall – choose your team carefully.
Sunny answers some questions with:
Share your experience with us.
Sunny Mead: I have extensive experience in technology and media with regard to the convergence of consumer, business and industrial software. I have worked many years in the financial world, as investment banker
, entrepreneur and now investor.
Tell us more about your fund.
Sunny Mead: Principia Growth was founded by Josh Tanzer, with whom I previously worked at an investment bank. He has over 25 years of experience in Silicon Valley/technology finance on multiple platforms at Credit Suisse, Lazard and Jefferies, raising more than $6.5 billion for businesses.
He recognised that, as an individual investor or as a family firm, it is extremely difficult to access high quality transactions at an advanced stage of technological development. That is why Principia Growth was founded in the summer of 2020 to fill this much-needed gap; we have many family investment offices that support our vision.
In which companies/sectors have you invested so far?
Sunny Mead: As a late growth investor, we are interested in a wide range of emerging technologies and invest in entrepreneurs who create sustainable businesses.
In the first six months of the start-up, we invested in two companies, both in the field of stand-alone software. The first investment was made in Seegrid, a leader in the AGV (Automated Guided Vehicles) and AMR (Autonomous Mobile Robots) sector. The second agreement we have just concluded is a leader in autonomous freight transport, with a presence in the United States, China and Europe.
In which companies do you want to invest and in which mental model do you want to invest?
Sunny Mead: We take a thesis approach by investigating megatrends and emerging changes in consumer behavior. Our investment team and strong advisory board have extensive industry experience in SaaS business software, FinTech and consumer applications. We also like to think about companies in the mechanical engineering sector. Overall, we want to invest in innovation wherever we are.
Our goal is to achieve achievable returns, take the time to think about and structure downside risks, and give priority to maintaining capital for our investors.
What is your typical investment range and how many start-ups do you invest in total per year? Can seedlings from outside the US receive funding through your fund?
Sunny Mead: Our goal is to invest in 3 high quality companies per year. We focus on equity valuations from $5 million to $25 million per investment; because we are new, we focus on the US and the EU, but we will also look at global companies if there is a strong appeal to KPIs and a leading investor with a US and local presence.
What are the Key Performance Indicators (KPIs) that you usually test for the growth of start-ups?
Sunny Mead: Each segment has its own Key Performance Indicators (KPIs), but minimum revenue growth is important; we aim for at least 50% annual growth and the ability/realisation to become profitable within the next 24 months. Parallel to the rapid growth, we analyse the quality of sales to ensure that they can be sustainable in the long term. It is also important to improve the economic performance of the gross margin unit.
How did your foundation tackle the situation of the COVID 19 epidemic?
Sunny Mead: The growth of the Principality began in the summer of 2020, with the entire team working remotely from day one. In our previous lives we were all used to video calling/conferencing, so the only difference is that we can’t visit customers in our wallets, which hopefully will be a temporary phenomenon when the world returns to normal next year.
What challenges do you face as a starting investor?
Sunny Mead: The biggest challenge is when we want to invest in a company, but a high valuation raises an important question. We are disciplined investors and strive for excellent management and service. It is very important to hold on to your values and propositions in a disciplined way, and that is the core of the values of Principia Growth.
Do you have any advice for setting up a fund?
Sunny Mead: Build the best team and don’t worry if it takes time; play long and enjoy every moment.
What mistakes do you think the founders made in fundraising?
Sunny Mead: Many founders don’t integrate analysis into a company’s ethics from day one. They think it takes resources away from them to build a product, but I would say that analysis is part of product development in today’s world. Create KPI trackers and use them daily in all departments to develop and improve your product.
Know your audience and talk to them a lot. You can continue to grow, but do not ignore the users who put you on the map.
What advice would you give to entrepreneurs who have the opportunity to meet investors like you? What are the three most important questions you always ask the founders?
Sunny Mead: Make sure that your KPI’s/measures are clearly presented in your marketing materials and presentations.
Product usage – be clear about what you want to spend the money on and why.
Partnerships – If you have a partnership with a brand or logo and you show it, make sure you have meaningful measures in front of you. Many investors show us the logo on the page before the numbers begin to appear.
Scoring – what you use to compare your scoring results.
What is your general opinion of the term globally and what are the important factors/criteria that local seedlings should take into account in international development?
Sunny Mead: We like entrepreneurs to think globally, but they first have to show that they dominate their domestic market.
I think that if you can win global customer names at a steady pace, it gives you an idea of when you need to expand globally.
Which start-up or technology industry do you think will have an impact on the world in 2 or 3 years’ time?
Sunny Mead: Our first two investments were in stand-alone software, and this kind of innovation happens so fast that over the years we can see a big impact on the result. Cyber security and machine learning are other areas where innovation continues at a rapid pace.
What are your three favorite books or movies/television shows that changed your life and why?
Sunny Mead: This book intrigued me with Hollywood and the creative world: Mail : The history of Hollywood from the bottom up.
Silence! Silence! Silence! Silence! Silence! Silence! Silence! The Power of Introverts in a World That Can’t Stop Talking is a book by Susan Kane that is not fiction. This book investigates how the world sees the introverted people in society and how we can better understand them.
Work in progress : Risking Failure, Surviving Success is a book by Michael Eisner, the former Disney CEO who helped transform the company from the 1980s to the 2000s, explaining how he made important decisions.
How to stay motivated every day
Sunny Mead: I like the speed at which people come up with ideas every day and the way they execute them. I am highly motivated to help people bring their ideas to life and see their visions evolve.
What are three important life lessons you want to pass on to future generations?
Sunny Mead: Start earlier in life if you have an idea, now have enough money from them to help you.
Work with the right people. If you work with people who don’t believe in your mission, you’ll end up in the wall – choose your team carefully.
Don’t be afraid to say no. Concentration wins, and you have to be careful where you use it.
Why would you want to be remembered?
Sunny Mead: Be friendly and helpful to family, friends and anyone who needs my help.
If you are looking for a solid investment for your start-up or a lover, keep an eye on our interview section.
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