Most venture firms are built for sugar highs.
Fast deals. Loud narratives. Big portfolios designed to statistically survive chaos. It works, until it doesn’t. And every cycle, when the music slows, you can see which strategies were conviction and which were vibes.
Sheena Jindal decided to build for the comedown.
She’s the founder and managing partner of Sugarfree Capital, a seed and Series A fund designed around a simple but uncomfortable belief: when intelligence becomes the core economic driver, technical founders outperform, and concentration beats diversification.
This post distills the core ideas from our conversation, for anyone who didn’t listen to the episode but wants the signal without the noise.
From Optimization to Intelligence
The last decade of startups was about optimization.
Shave minutes off delivery times. Match supply and demand more efficiently. Move faster, cheaper, smoother. Great businesses were built, but they mostly rearranged existing systems.
Sheena’s core thesis is that we’ve crossed a line.
We’re entering the age of intelligence, where the hard problems aren’t workflow tweaks, they’re systems problems. Interoperability. Data capture. Ground truth in messy, physical, non-AI-native environments.
That shift quietly changes who wins.
Optimization rewards polish. Intelligence rewards depth.
And depth tends to live with founders who can build, not just pitch.
Why Technical CEOs Win (Especially Now)
Sugarfree Capital has a clear rule: the CEO must be technical.
Not “technical-adjacent.” Not a charismatic seller paired with a strong CTO. The person running the company needs to understand the system end to end.
Why?
Because in an AI-native world:
Product cycles compress brutally
Feedback loops are immediate
Integration complexity explodes
Sales conversations are increasingly technical
Customers don’t want to be sold. They want to be understood.
Founder-led sales works longer than people think, especially when the founder can explain exactly how the product fits into a broken stack, not just why it’s exciting.
This is one of Sheena’s recent conviction shifts. In the past, early go-to-market hires felt essential. Today, much of that work can be automated. Deep product understanding cannot.
The Case for Concentration (and Sleeping at Night)
Most early-stage funds optimize for coverage. Twenty-five, thirty, sometimes more companies per fund. The logic is familiar: most will fail, a few will return the fund.
Sugarfree runs the opposite playbook.
Roughly 15 companies per fund. Heavy reserves. Ongoing involvement. Decisions made as if each investment were the only one that mattered.
This forces uncomfortable discipline.
You can’t hide behind portfolio math. You can’t wave away risk with “power laws.” You actually have to believe the founder can build something enduring.
Sheena put it simply: she’d rather underwrite carefully and sleep at night than glorify losses as proof of boldness.
It’s not anti-risk. It’s selective risk.
Sugar Highs in AI (and How to Say No)
Yes, the sugar is back.
AI companies are being priced aggressively. Momentum is driving decisions faster than fundamentals. It feels familiar because it is familiar.
Sugarfree’s response isn’t abstinence, it’s discipline.
Valuation still matters. Capital intensity still matters. Future fundraising still matters. A moonshot that requires endless capital can still be a bad bet at the wrong entry point.
The firm’s ethos isn’t anti-ambition. It’s anti-delusion.
High conviction doesn’t mean ignoring gravity. It means choosing carefully where to fight it.
Deep Tech, Defense, and Raising the Dopamine Bar
One of the more telling moments in the conversation came when Sheena said her dopamine bar has gone up.
Incremental software no longer excites her. She’s drawn to hard problems that attract founders with extreme urgency.
Think:
Data center optimization at the infrastructure level
Autonomous systems and defense applications
Physical AI where ground truth is scarce and valuable
One portfolio company builds AI-powered night vision. Once a month, the entire team drives hours outside the city on moonless nights to test their technology in the field.
That’s not a pitch deck story. That’s founder DNA.
The hardest problems tend to repel tourists and attract obsessives. Sugarfree is built to find the latter.
Venture Is Getting Leaner, Too
A quiet theme running through the discussion was leverage.
AI isn’t just making startups more capital efficient. It’s doing the same to investors.
Sheena runs a lean firm by design. Automation handles admin. Tools reduce cognitive load. That frees time for what actually compounds: thinking, pattern recognition, and founder relationships.
The implication is subtle but important. We may see more solo GPs, smaller teams, and tighter funds, not because capital shrinks, but because leverage increases.
The work doesn’t disappear. The waste does.
What Sugarfree Is Really Optimized For
Zooming out, Sugarfree Capital isn’t optimized for headlines or scale.
It’s optimized for:
Technical depth
Decision autonomy
Long-term founder partnerships
Staying power across cycles
Sheena doesn’t plan to turn it into a massive platform. Fund 10 should look a lot like Fund 1. Tight. Focused. Opinionated.
Her ambition isn’t to back the most companies. It’s to back the right ones, and still be standing when the sugar wears off.
The Bigger Pattern
Every cycle produces two kinds of firms.
Those built to ride momentum.
And those built to survive clarity.
When intelligence replaces optimization, when founders ship faster than narratives can keep up, and when leverage compresses everything except judgment, the firms with real conviction start to look boring.
Boring is underrated.
Especially when everyone else is crashing from the sugar high.
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Chapters:
00:01 – Welcome & Guest Introduction
00:43 – Sheena Jindal’s Origin Story at MIT
02:16 – From BCG to Bessemer to Comcast Ventures
04:13 – Are We Back in a Sugar High Market?
07:29 – Why Sheena Founded Sugarfree Capital
09:25 – The Case for Technical CEOs
11:11 – High-Conviction, Concentrated Venture Strategy
14:15 – Reserves, Pro Rata, and Long-Term Founder Support
16:34 – How Sheena Evaluates Founders Quickly
19:58 – Deep Tech, Moonshots, and Raising the Dopamine Bar
22:41 – Valuation Discipline in Frothy AI Markets
24:10 – Thesis-Driven vs Opportunistic Investing
26:24 – Physical AI, Defense, and the Data Layer
28:14 – How Venture Capital Is Evolving
30:10 – AI, Automation, and the Future of Work
34:28 – Long-Term Vision for Sugarfree Capital
36:06 – Under-the-Radar Startup Models
39:53 – Founder-Led Sales and Changed Convictions
41:03 – Advice for MIT Students and Early Founders
44:00 – Staying Sugar Free
Transcript
Brian Bell (00:01:08):
Hey everyone, welcome back to the Ignite podcast. Today we’re thrilled to have Sheena Jindal on the mic. She’s the founder and managing partner of Sugar Free Capital, a venture firm backing high conviction, technical founders, often from MIT, building an AI infrastructure and emerging systems. Before founding Sugar Free, Sheena was a partner at Comcast Ventures, where she led or co-led investments in companies like Ample Markets, Seven Rooms, and NERCs. She’s also spent time at BCG, Bessemer, and has been an operator. Thanks for coming on.
Sheena Jindal (00:01:36):
Thank you so much for having me. Looking forward to the discussion today.
Brian Bell (00:01:39):
Yeah, likewise. So I’d love to start with your background. What’s your origin story?
Sheena Jindal (00:01:42):
Yeah, absolutely. So I grew up in the Boston area, went to MIT for undergrad, and really spent my time in college building an e-commerce infrastructure startup. And I think one thing I really realized about MIT is nothing was impossible. It was never find something narrower, pick a simpler problem, let’s try to simplify this. The goal was always, let’s build the impossible. And I think that energy is incredibly infectious and always has been in the back of my mind over the next iteration of my career. After MIT, I worked at BCG for a few years, then joined a Series A startup out in the Bay Area in 2015, and was fortunate enough to start my venture career about eight years ago now. I started working with Kent Bennett over at Bessemer, really learned two things from Kent. One, find your edge and venture early and really lean into that. And then two, it’s a lot more fun to invest in sectors and categories that others aren’t hunting in just yet. Both of those really rung true for me. I joined the team over at Comcast Ventures in the summer of 2019. Honestly got incredibly lucky, but ended up leading about a dozen deals at the firm across a handful of category winners. And in the 2021 era, some of us may remember the markets were quite frothy and kept referring to investment opportunities we were seeing as being too sugary. So always joked if I launched a firm one day, it’d be named Sugar Free Capital, an anecdote to the agent. 2022, 2023, really started to think about what the next generation of a venture firm would look like. Sugarfree was founded on two core beliefs. One, that technical founders outperform as CEOs. And two, that high concentration strategies are what yielded out. So Sugarfree was born. 2024, we fundraised and then have been spending 2025 actively deploying out of our first fund.
Brian Bell (00:03:29):
Oh, congrats. That’s a huge lift. At least you raised your first fund having actually worked in venture. I raised mine without any experience. So people were very much taking a leap of faith. What was that second lesson from Bessemer? I kind of missed it.
Sheena Jindal (00:03:41):
It was really around investing in sectors and categories that aren’t mainstream yet. So, you know, you typically go into a big firm. Everyone obviously has swim lanes that they’re known for. So-and-so invests in cyber. So-and-so invests in healthcare. So-and-so invests in fintech. And it’s really hard when you join a big platform to kind of figure out what can you do without stepping on somebody else’s toes. And I think for me, I was fortunate enough to have Kent in the back of my mind thinking about that when I joined the team over at Comcast Ventures and was able to really be thoughtful around what are sectors that other partners, other principals in the firm aren’t spending time on. Maybe that’s where I should start hunting.
Brian Bell (00:04:20):
Yeah, I like that. Yeah, it kind of feels frothy. We’re kind of recording this right before the holidays in 2025 in December. You know, the episode probably won’t come out until January at this point. But I feel like the frothiness is a little bit back, you know, especially in AI, but I’m seeing it in also the late stage. Secondaries, you know, companies are getting bid up to 100x or 200x revenue. You know, we’re seeing seed rounds for hundreds of millions of dollars. Like, what are your thoughts on that? Having lived through now, it’s kind of the second boom cycle as a VC.
Sheena Jindal (00:04:48):
We are absolutely in sugar high land. Again, if you are an AI company, absolutely. So I think we’ve seen this story before. I think the principles continue to hold and the learnings and insights coming out of 21, I think should continue to hold, which is coming out of each of these cycles, there is a very small number of companies that actually get minted as category winners. And it’s really hard to figure that out right now. But if you’re high conviction and you’re incredibly focused and you have a firm believer that you have that company, you probably are investing at a good entry point and you are probably are thinking about it the right way. But I think it’s really challenging when there’s such deal driven momentum right now versus investing on any fundamentals that I’m sure more often than not, most folks are not going to be on the good side of that coin.
Brian Bell (00:05:35):
So what stages are you doing in your fund?
Sheena Jindal (00:05:37):
So we’re seed series A focused and very high concentration, high conviction. So no more than 15 companies per fund, which is pretty cool.
Brian Bell (00:05:44):
Yeah, that’s a little contrarian. I’d say the average right now is probably 25 or 30. And you’re completely opposite of what we do, which is, you know, we do 150 a fund right now. which is a little different, but we’re pre-seed. So it’s a little different from high conviction seed and definitely A. What was the difference between working at Comcast and Bessemer for you? Because Comcast was very much where they were investing off balance sheet for strategic reasons. And what did you kind of take away from that corporate VC versus like an actual VC?
Sheena Jindal (00:06:11):
You know, both firms in a strange way actually weren’t all that dissimilar. When I was at Comcast, the mandate was actually financial returns that has since shifted. But for about 10 years, the firm was very much oriented around financial returns when we were compensated on financial returns. So it was pretty unique in that sense. The fortunate, I really think of it as the best of both worlds. We had a sole LP. We didn’t have to worry about fundraising. 2024 was a lot of firsts for me, as you can imagine. But it really was focused on generate great financial returns, go out and find fantastic companies to invest in and not have to worry about typical fundraising cycles and some of the problems or adverse selection that can occur when you’re kind of bumping up against fund cycles.
Brian Bell (00:06:55):
So that’s interesting. So Comcast was looking for financial returns, not just alignment to their strategy or technology visibility, things like that.
Sheena Jindal (00:07:03):
No, up until about 2021, that was the case. I think afterwards it did move to a strategic strategy.
Brian Bell (00:07:09):
Yeah, and this was the same at Microsoft. They were doing at M12, they were doing just purely financial VC. And then I think that shifted back in about 21, 22, where they said, hey, maybe we should align it for what we actually care about at Microsoft instead of just trying to get financial returns. Let’s talk about kind of the origin story of Sugarfree. At what point did you kind of have the aha moment where like, I’m going to go do my own firm. I’m leaving. I’m going to go do this.
Sheena Jindal (00:07:35):
Yeah, it’s a great question. You know, it was it was funny timing, I think, coming coming down from the sugar high. And I think some of the realizations were that we were I really firmly believe that the last decade of venture investing was very much the age of optimization. It’s how do we bring 60 minute delivery to 10 minute delivery? It’s how do we match dog owners to dog walkers? It’s how do we think about optimizing? And I firmly started to believe that this next generation of venture investing was going to be around the age of intelligence. And that’s going to require a very different founder archetype and a very different persona at the helm of the business. And I started to look back at my Comcast portfolio and my angel portfolio. And I really started to recognize that the technical founders in my portfolio were consistently outperforming. They were moving fast. They were incorporating customer feedback at the speed of lightning. Products were shipping faster. They were just able to do more with less. And I really found that that sense of urgency was really important. And then two, in this new paradigm and in this new world, interoperability and a systems engineering mindset is really important for founders because we can’t all be living and selling to customers that are just perfect AI native businesses and everything is super slick and clean and we know how the integrations work. The best founders really understand and have a systems engineering mindset. So when we say technical, we don’t just mean somebody with a computer science degree. What we really see within the portfolio are founders typically with engineering degrees. Coding is table stakes at this point in time. Do you have a mechanical engineering degree? Have you maybe worked in a physical discipline? And so we really like thinking about the ability to take idea and actually help that manifest into something real.
Brian Bell (00:09:22):
Yeah, that’s an interesting thesis. Do you feel like maybe that was your edge because you’re kind of, you have a technical background? I’m not sure what you, you majored in MIT, but maybe you could spot talent better in the, in the technical areas, like a technical founder, you could spot talent better because that’s your kind of background. What do you think about that?
Sheena Jindal (00:09:40):
I think it’s a little bit of background. I think it’s a lot of just potentially exposure therapy for lack of a better word. You know, when you spend a lot of time around really smart, talented technical founders, you kind of understand how to navigate those early conversations, unpacking what they’re building. And I think it just becomes a much more fruitful 30-minute intro conversation if you know how to engage and have a meaningful conversation about what they’re building. And I found sometimes, you know, another moment you ask kind of what the aha moment was for sugar-free and thinking now is the time. To be honest, Brian, I started to look at my anti-portfolio. And I started to look at the number of founders I had seen over the years at my time at Comcast that, you know, we had ended up passing on or we’d ended up, you know, sharing with another partner because it was his or her expertise. And I thought to myself, gosh, if I had really just been able to be kind of the owner of that deal, for lack of a better word, throughout this process, I really would have made sure and pounded the table to make sure we invested in that. I’m so bummed I didn’t have the opportunity to do so. So I think Sugarfree was also partly born from this idea that moving, being nimble, having the ability to make autonomous decisions is ultimately going to help prevent that anti-portfolio from bubbling the way that it did at that point in time. Because there were so many fantastic MIT founders I met over the years that I wish I had invested in.
Brian Bell (00:11:03):
So the thesis is you’ll only invest in technical teams or do you kind of like to see complementary skill sets across the founding team?
Sheena Jindal (00:11:10):
We’d like the CEO to be technical.
Brian Bell (00:11:12):
Yeah, interesting. Okay, so it has to be a technical CEO, not just the CTO, not just 50-50 co-founders with the business CEO. It’s, no, I want a technical CEO. You know, we do a lot of YC. We have a YC-focused fund, 120 investments in YC at this point over the years. I’m pretty sure YC waits on that as well. I would say, I’d have to go back and look at my data, but I would say 80%. of YC teams have a technical CEO. That’s just a guess. I’d have to go back and look at the exact data, but they seem to figure that out as well a long time ago. Yeah. What else can you tell? So what’s your check size? You can make 15 investments. You reserve any capital. You’re taking board seats, all that stuff.
Sheena Jindal (00:11:51):
Yeah, absolutely. So in terms of the mechanic of the firm, 15 investments per fund, think one to five for first check. And then we do have a pretty hefty reserves policy. That takes two formats for us. One, through obviously out of the core fund. And then two, RLP base is a really unique complexion, which I’m happy to talk about, Brian. And they’re particularly excited about co-invest. So we’d love our supporting our portfolio companies throughout their life cycle. i think in my last role at comcast ventures every single investment that i made i did at least prorata if not super prorata in subsequent rounds so i have always been a big believer in concentration supporting your companies throughout their life cycle and so our goal is to not be you know one check and we’re out the goal is to really continue to support our portfolio companies even throughout that pre-ipo route
Brian Bell (00:12:42):
How’d you think about the reserve strategy versus just forming SPBs and letting all your LPs pile in on the pro rata?
Sheena Jindal (00:12:48):
Yeah, it’s a great question. I think for, given the fact that it’s such few companies per fund, we are able to kind of take matters into our own hands and it’s just easier to underwrite them given the asymmetric information that we have, quite frankly, versus a new, and each SPV really does feel like an LP is re-underwriting that deal from scratch. We do act, we’re actively involved with our portfolio companies. I mean, I have a standing weekly 30 minute call with each of our companies and you can imagine we’re probably texting and chatting in between. And so, I think as a result of that ongoing engagement, we are excited to lean in. In fact, with one of our portfolio companies, we made our first investment in the middle of March. And then we really started to see that we’re hitting an inflection point in May and actually offered to double our investment in Jim. as a result of that. And I don’t think that would have happened so quickly if we didn’t have that ongoing engagement with the CEO and hear about the fact that sales cycles were shortening to single 30-minute phone calls.
Brian Bell (00:13:45):
Love that. What did you learn about fundraising going through that first fundraise?
Sheena Jindal (00:13:49):
Because before, it was kind of done for you, right? Absolutely. Now you’re out there in market. What did you wish you knew when you started? And what would you do differently when you raised the next fund?
Sheena Jindal (00:13:58):
It’s a great question. You know, I think fundraising is such a it’s look to each their own. Everybody’s got their own pathway and their own story. We were honestly incredibly fortunate. You know, I think I went out to market late Q1 of 2024. We did our first close at the end of May and wrapped all dollars by Thanksgiving. So it was a tight six month process. And I think for us, there was two core learnings. One, we had a very clear product and market for our LPs. And LPs understood that Sugarfree was focused on technical founders, predominantly MIT. And it was going to be very focused on high concentration, high conviction strategies. That ruled out many people, as you can imagine. There were folks that said, I don’t like concentration. I want to wire... portfolio there were folks that said how could technical founders be ceos you know i worked with so and so and it wasn’t so great you know they really need to make sure they’ve got a super charismatic you know go-to-market guy at the helm and so i think as a result of that we were our icp was pretty clear and narrow as a result of that it was folks that understood our thesis and appreciated the concentration.
Sheena Jindal (00:15:06):
Two, I think a key learning is you’ll know in the first five or 10 minutes of a phone call if somebody is really interested and excited about what you’re building. And it’s the same, I think, between VCs and founders. And so, you know, instead of pushing a boulder uphill and convincing somebody, it’s probably just easier to move on and think about the next person. And I think for me, that was really helpful. I obviously built an incredible amount of scar tissue, but you do really start to realize that there’s more fish in the sea, to put it bluntly. And instead of wasting your time, you know, on someone who’s really not that excited or or needs to eight or nine meetings before pushing you up to their patriarch or, you know, decision maker within a family office. It makes sense just to. Plenty of fish.
Brian Bell (00:15:52):
That’s a good lesson. So, I mean, you’re already fishing from a pool of great candidates. If you’re mainly focused on MIT and technical CEOs, how do you evaluate founders beyond that?
Sheena Jindal (00:16:02):
You know, when we meet a founder, I think there’s two core things that I want to assess coming out. And it’s, do I want to work this person? And do I think this person has the capability to ring the bell of the New York Stock Exchange in the next 10 years? And that’s really what I’m trying to get out of my first 30-minute intro call meeting, what have you. In fact, we were just pulling the stats for our Q4 update, our LP update today. And we meet with our second meeting drop-off rate is pretty significant. You know, I think we met with 253 founders in Q4. This is, you know, mid-December where we’re having this conversation. And I think we had second meetings with about 10% of those. So it’s pretty dramatic drop off. So it’s really important to use that first moment, that first 30 minute intro call wisely. And the things that we look for, outsized technical depth, moving at the speed of light, like they should have a deep sense of urgency and a sense of true founder market fit. Like you really wanna feel that that person has been put on this earth to build this company.
Brian Bell (00:17:00):
I love that. Yeah. You’re almost echoing almost exactly what I tell people when I look for founders. Can they ring the NASDAQ bell someday? Founder market fits not as important. I kind of go back and forth. I just published some research on this that I did where 60% of unicorns are founded by founders outside of the industry, but I still think they should have a unique take. you know, some unique insight. What else do you look for? Like what are kind of your, maybe you could peer into your framework a little bit. Like, you know, like what percentage of your framework weights on founders versus other things like timing and traction and all the other things VCs care about?
Sheena Jindal (00:17:34):
Yeah, I mean, we’re very much people first. And then I think we’re product second. And product and market for me in this day and age really do go hand in hand. Ultimately, businesses are going to evolve. They’re going to pivot. We’re aware of that. Obviously, we don’t go in underwriting and pivot, but these things happen. But what really is important to us is unpacking the mental resiliency of a founder. Do they have the ability, you know, if a sales call doesn’t go well, to just be ready for that next fish in the sea and kind of move on? Are they able to hire quickly and retain and attract incredible talent? Something we’ve started doing in our diligence processes is no longer just saying, okay, so you need these types of engineers. You’re going to make these three or four hires with your seed or your series A. We’re actually specifically asking for the profiles, like the LinkedIn profiles that can be anonymized or not, of who are these five or six target hires that you’re planning on making? Where are you in the process of recruiting them? And then ultimately, this seems simple, but speed and pace. How responsive are they? How quick are they to make sure that they’re moving or keep moving the ball forward? And I think those are subtle cues, but those are strong signals of someone’s ability to sell. They’re strong signals of somebody’s ability to pivot. They’re strong signals of somebody to push product out and get it out there and ship. So we really do assess a few things that are neat though. It’s like response time to emails.
Brian Bell (00:18:53):
Yeah, I mean, the best founders are right there answering emails right away. They’re living at the top of their inbox. A lot of highly effective people are like that. I’ve heard Mark Andreessen, if you have his actual email address, he’ll reply like within a minute. He’s just sitting there on the top of his inbox just all the time. And this drives me crazy because I’m an Inbox Zero guy and I got really backed up over Thanksgiving. I still have like 200 or 300 emails to dig through and it’s really bothering me. I’ve gotten back to inbox zero post Thanksgiving, but I have a bunch of free Thanksgiving stuff now I have to get through. How do you underwrite deep tech? Will you go all the way down to the deepest, darkest parts of the stack? Or do you kind of keep it at the application layer? Where do you like to invest?
Sheena Jindal (00:19:32):
I joke that recently my dopamine bar has gotten so much higher. So we’re right now very much looking at the crazy, wacky stuff.
Brian Bell (00:19:40):
I actually agree with you on this. Over time, you’ve been in this longer than I have. I’ve been maybe about seven years in and five years investing other people’s money. I feel like over time, I’ve become much more moonshoty, if that’s the word. I’m much more looking for like, wow, this is zany. If it works, it’s a 10 or $100 billion company or trillion dollar company. High risk of failure, like data centers in space and stuff like that. Like really weird stuff.
Sheena Jindal (00:20:07):
Totally. I completely agree with you. And it’s probably a combination of realizing, you know, you took a lot of the, you had managed risk earlier on in your career. But I also think those are the businesses that really also attract some of the super like high urgency. Elon level founder types.
Brian Bell (00:20:24):
Exactly. They’re just trying to move the universe forward, right?
Sheena Jindal (00:20:27):
Exactly. Exactly. And it sets us an incredibly high bar. One of our most recent portfolio companies, I don’t know how wacky this is, but they’re building AI night vision. And it’s in a dual use context, as you can imagine. So as the nature of warfare is shifting away from boots on the ground, as you can imagine, we’re moving deeper into special operations, we’re moving deeper into drone warfare. It would be incredible if we could actually see at night with clarity and without latency. And so that’s exactly what we invested in, right? And this team once a month, on a moonless night that eight of them all go out two hours outside of San Francisco to the darkest part that they can find and actually test out their technology. I mean, there is just such visceral excitement within this team. It’s infectious when you’re around them. Like, you know that they have been put on this earth to build this.
Brian Bell (00:21:15):
That’s so awesome. So how do you maintain discipline when markets are getting sugary? Are you valuation sensitive? How do you think about valuations and traction and multiples? How do you kind of do that? Have you backed? Have you said, no, I’m just not going to invest on this $300 million seed?
Sheena Jindal (00:21:30):
Yes, we have absolutely said no. I mean, our goal is to maintain our sugar-free ethos. And I actually do think in this market, it can be done, Brian. You know, obviously for our seed in our Series A portfolio companies, they’re kind of operating in different echelons from a traction perspective. But I do think you’ll recognize that there is consistency across pricing discipline within the portfolio. And I think the way that I right-size it, I do still look at revenue multiples, even at seed, just to make sure I’m not totally crazy. And two, we also do think about future fundraising and capital needs pretty seriously. Given the concentration strategy that we have, pro rata, thinking about dilution, all of those factors are incredibly important to us. So as many times as I love the moonshots, if they’re gonna require a billion dollars in cash, to actually make happen, we’re also pretty mindful of entry price there and entry point there.
Brian Bell (00:22:21):
You know, I think, was it its benchmark actually that invests with very much a prepared mind. They do kind of market maps and they really think about like where the trends are going. And then the other side is somebody like me who just kind of takes it as it comes, deal flow. Where do you kind of fall on that spectrum?
Sheena Jindal (00:22:35):
I’m incredibly fortunate that between BCG and my time working with Kent at Bessemer, I’ve become pretty roadmap and thesis driven. So the way our firm works is I would say it’s about a 70-30 split. So 70% of our deal flow each quarter is oriented around two or three themes that we’ve gone deep on. And then I would say 30% is probably opportunistic. It’s inbound. It’s, hey, you found a referral. Hey, you should meet this MIT founder. But the core of our sourcing and deal flow really does come from spending dedicated time building a thesis around two or three core areas. And as you can imagine, nine times out of 10, that doesn’t yield an initial investment within that quarter. But we have a prepared mind for the next 6, 12, 18 months. And we continuously refresh and update our point of view so that when the dream team does come along, we can act fast and with conviction. And I think that’s the agility I love about being a solo GP is when that happens, we can actually do that.
Brian Bell (00:23:31):
Yeah, I love being a solo GP. I keep debating whether or not to bring on a partner. And I’m like, I just don’t want to have to explain my decision making to anybody, except my LPs, of course, or have a partner want to invest in stuff that I don’t think is a good use of LP money. And I just I love the solo GP. And I think solo GPs tend to outperform. I think I have that in one of my articles somewhere. But so what are those themes right now that you’re excited about over the next year?
Sheena Jindal (00:23:55):
Yeah, absolutely. So we’ve been spending a lot of time in Q4 looking at data center optimization. As you can imagine, instead of building that new, how can we think about the existing infrastructure. That’s one theme that we’re spending a lot of time on. We are spending more time in defense, as you can imagine, and just autonomous systems there. And then we’re also spending time right now on, as everybody is probably, on physical AI. But for us, really thinking about the data layer. And is that going to be the area in which value is going to accrue? And we don’t only mean robust, but we just mean autonomous systems in general. and thinking about what will the FACTO data stack be in this hybrid world that we’re going to be living in.
Brian Bell (00:24:38):
I think Shamash said this best on All In Podcast some number of months ago. He said every paradigm shift or platform shift kind of whipsaws up the stack. So you start with a foundational model like ChatGPT, and then there’s the networking layer, the platform layer, the application layer, and then it kind of re-bundles back down through the stack. Is that how you kind of think about it as well or any nuance to that kind of theory?
Sheena Jindal (00:24:59):
Yeah, there’s a question sort of between the foundational model layer and how do you actually create that foundational model, right? And I think with the era of the internet, ChatGPT was able to be formed because all that data was aggregated already in a digestible format. But in a physical world, that’s not really been captured in a digestible way. So it’s really thinking about how can we capture ground truth effectively and how can we build upon that is where we’re spending time at least.
Brian Bell (00:25:26):
Yeah, and so I guess the corollary and the physical AI space, which you might also label as like robotics, is you’re starting to get these platforms, like the figure platform and the Tesla platform. But then there’s also underneath that, there’s like the data layer and the model layer that feeds into that. And then above that, there’s kind of the vertical layer, you might call it, where you’re kind of taking some of these technologies and applying it to, like I’m looking at one next week that does it for restaurants, right? They take repetitive processes and quick service restaurants and use robotic arms to replace labor and optimize labor, basically.
Sheena Jindal (00:25:58):
Awesome.
Brian Bell (00:25:58):
How do you think, you know, you’ve been in VC for a long time. How has it shifted over the last 10 years since you’ve been in it? And then what do you see on the horizon the next five or 10 years for venture capital generally?
Sheena Jindal (00:26:09):
Yeah, it’s a great question. I mean, I feel like 10 years ago, the network, particularly in New York, was small. Like, you know, you’d run into the same people at the same few dinners, events, et cetera. I think we’ve realized now that the spectrum has significantly and the aperture has significantly widened. That being said, I do think folks in the last year or two have really started to figure out their respective swim lanes. And folks are realizing that specificity of their strategy is going to be important and earn them a seat at the table, a right to win with founders, et cetera. So I’m kind of enjoying that everybody’s found their tribe, for lack of a better word, and has really figured out what their edge and respective sweet spot is. I think this next iteration now is going to be figuring out how we can be more collaborative and complementary to each other, given the fact that everybody has been so articulate around where they spend time. So I think that’s something I’m looking forward to. I’m always curious to kind of think about when the sugar high is going to wear off for this AI era and what that really means as well. But I do think like we still have a lot of room to run in terms of how you and I are going to work, how we’re going to operate at home. I mean, there’s so many dimensions to how our day-to-days have probably been changed over the last 18 months. And I’m just like continued to be excited about what that’s going to look like over the next 12 to 18 months.
Brian Bell (00:27:27):
I mean, I think about my role as a, you know, associate, as a principal, five, seven, 10 years ago, the work that I have now been able to automate as a result of AI is incredible. I don’t think I would be able to be a solo GP and have such a lean team if the advancements in AI had not happened enough. occurred. So I think that’s going to be really interesting. I’m guessing we’ll see a lot more solar practitioners. I’m guessing we’ll see a lot more lean and mean teams out there. And so I’m just excited for like some of the bloat to go away and just like focus on like doing what we should be doing, which is like investing in fantastic founders.
Brian Bell (00:27:59):
You know, it’s interesting as I, I feel like on the startup side, I’ve talked a lot about this. I’ve written articles and talked a lot about this on the pod. You know, I think founders are getting ever more capital efficient because of AI and automation, right? But I think us VCs are also getting more efficient as well. I wonder if there’ll be a compression of management fees to come, right? Because you used to have to charge 2%. And let’s just say you had a $100 million fund. Maybe it doesn’t take 2% a year to deploy a $100 million fund anymore. You don’t need to. charge your LPs $2 million a year. Maybe it’s one and a half or one and a quarter. What do you think about that?
Sheena Jindal (00:28:30):
Do you feel like AI and automation will kind of come in the same way that it’s bringing a lot more capital efficiency on the startup side and they’re getting to a million of ARR bootstrapped and just the revenue per employees going up? Do you feel like VCs will be like a force down on the management fees perhaps for us?
Sheena Jindal (00:28:47):
I think it probably depends on your fund size. I do continue to think for smaller funds, there is still like a flat baseline fee that is required just to keep the lights running and to do what you want to do. You live in New York. I mean, you got to make decent money, at least 200,000 a year. And we’re also doing a lot for the MIT community. You know, our goal is to really be the center of gravity for MIT in New York. We don’t have a physical space. So like our goal is to be able to leverage the space that we do have to bring MIT founders together and all of that. To answer your question more directly, Brian, I think what you’re going to see is the automation is going to just enable us to just do our jobs better, faster, and honestly, with less errors and less mistakes. I think that’s actually what I’m most excited about. is i no longer wake up in the middle of the night thinking oh my gosh should i answer that email or was there a typo in that or should do i need to update that slide like all of those things have been done for me the cognitive load has come down so that i can actually use my brain now for more in-depth thinking more roadmap type work
Brian Bell (00:29:50):
yeah it’s like the price performance of your unit of time has gone up right so like i can review a deal twice as fast and make probably 50% better decisions.
Sheena Jindal (00:29:57):
Exactly.
Brian Bell (00:29:58):
I could do due diligence the same way, right? Twice as fast, you know, and probably 50 to 2x, you know, half x to 2x better, right? One and a half x to 2x better. Where do you kind of see startups in the industry when you look five or 10 years out? You know, we’re going to have probably some very strong AI that can agentically do lots of things for you. Job losses, all that stuff that people talk about online. Where do you see the startup ecosystem going? Do you feel like there’ll be an order of magnitude more startups created and there’s just more entrepreneurs than ever? Because anybody with an idea can spin up an agentic swarm, equivalent of building a website on AWS 10 or 15 years ago. And now you can spin up a whole corporation of agents to create value in the world just with your harebrained idea.
Sheena Jindal (00:30:50):
I think that’s exactly right. I mean, I think there’s a distinction between venture-backed startup and startup that’s going to happen. I think folks are going to realize, look, I think that the world is shifting in a direction where the number of solopreneurs has been growing steadily since COVID. Folks have realized they want to work for themselves. They want to be in control of their own destiny. And they want to have uncapped upside, which is, we know many roles no longer offer. And so I firmly believe that there will be a number, there’ll be an order of magnitude, more people building products and building businesses as solo practitioners and, Will those folks all need venture fundraising? Probably not. But there’ll be plenty, there’ll be a whole new class of tools, resources, capital market, probably for folks like that. And I think that’s what I’m really excited about.
Brian Bell (00:31:36):
Almost like kind of the, yeah, almost like the creator economy works now, right?
Sheena Jindal (00:31:41):
Yeah. A little bit of that, but in kind of the startup ecosystem.
Brian Bell (00:31:44):
Exactly. What’s your long term vision for sugar free? Do you feel like you’ll keep doing the 15 per fund and not try to scale out into this massive firm or, you know, as you kind of look at a funds two and three and beyond?
Sheena Jindal (00:31:55):
Yeah, I think sugar free fund 10 is going to look all not that different from sugar free fund one. to be very honest with you. I don’t think we’ll expand far beyond the scope of 15 companies per fund. I think our fund sizes will continue to remain nimble and tight. I think tight is what forces good decisioning. When we look at an investment, we very much view it as if it is the only investment we are going to make at the fund. When we do our underwriting, we don’t really take the typical portfolio approach of, you know, 70 percent are going to be right off. Some are going to have this one home run that’s going to make up for the rest like that. That’s not how we view the world. You know, there’s a gentleman I admire who runs a large firm in Silicon Valley. And I learned about his track record. I learned from the team that he actually doesn’t have a single loss within his portfolio. I mean, and you look at the names. And it’s incredible to see that. And I think most folks don’t talk about that. It’s so glorified to lose money. And yes, there’s the old adage of you’re potentially not taking enough risk, but I’d rather go to sleep at night, being able to sleep eight, nine hours a night if I can. And so- Our goal is to keep fund sizes tight. The firm, I think, will remain lean as a result of that. And we’ll be really just focused on investing in the best. And our thesis holds. There’s really not that many great companies out there. So we should be concentrating our resources and our capital into a select number.
Brian Bell (00:33:18):
I love that. Let’s wrap up with a rapid fire. And you can answer these as long worded as you want, but...
Brian Bell (00:33:26):
What’s one under the radar startup you wish more investors understood?
Sheena Jindal (00:33:29):
Am I allowed to share one within my portfolio?
Brian Bell (00:33:31):
Yeah, sure. Or anything you want.
Sheena Jindal (00:33:32):
Something we’ve been thinking a lot about at Sugarfree is the fact that software and human capital talent are going to be fungible at some point in time. And we think a lot about teams being lean, but it’s because software is enabling them to be lean. And so if you once had budget for headcount, it should be appropriate to reallocate that to software. And so we’ve been investing alongside this trend over the last year, I would say. And the company that I mentioned we doubled our investment into is building exactly on that thesis. And so their whole business model is essentially catering to you and me, Brian, which is essentially the rising crop of solopreneurs in the US and bringing them the best of human fractional experts and a compound solution of the 20 best AI tools you and I should be using. And instead of us having to stand those up ourselves and figuring out how to stitch them together and optimize, they do all of that for us.
Brian Bell (00:34:29):
That’s bundling. Everything gets unbundled. Innovation happens across the stack and verticals, and then somebody comes together and just bundles it all back up.
Sheena Jindal (00:34:36):
Exactly. So I think this is a theme where folks are thinking like, how big is the TAM? How many folks are really willing to spend? But we’re seeing them close $60,000 ACVs 30-minute phone calls. And it’s really quick. They make it as easy to make a human hire as possible. And so really interesting to see that that willingness to pay on a talent perspective is now occurring in a software format, which is pretty awesome.
Brian Bell (00:35:00):
Really cool. Which portfolio company has taught you most about founder psychology?
Sheena Jindal (00:35:04):
That’s a great question. I think the night vision one that I mentioned, deep night, has been a really fantastic learning for our team. This is one where we mentioned that the team goes out into the moonlit the moonless nights and tests out their technology. And I think there’s two core views around this founder that got us really excited to invest. One, the team had spent time at Google, you know, they’d worked in big tech, but despite that, they really spent all night staying in the office, reading research papers and tinkering around and testing out their products and building prototypes. And that really had founder DNA, despite being in big tech and having access to that. And two, the team just had incredible tenacity and hustle to build something best in class. And it was evident, like they were go big or go home. And so I think The resiliency of this team, they’re building a really hard, technically challenging product, and they’re building it for our national security. They’re building it in a way that matters. And they recently signed a contract to be monitoring U.S. military bases. And so it’s pretty nice to see your portfolio companies doing something that we can actually feel and feel in real life is actually helping all of us.
Brian Bell (00:36:14):
Yeah, the one fear I have is technological revolutions lead to war, right? You see this throughout history, right? It leads to economic disparities, and then it leads to people like Russia invading Ukraine. Like, oh, well, we have new technologies. Let’s go after resources, right? And most wars are over resources, and new technologies kind of spur people to Do more war. What is a recent conviction you changed your mind about?
Sheena Jindal (00:36:41):
I think we were talking about this last night in an event. I used to think that the first, in addition to engineering talent, the first key hire within an early team should be someone on the go to market side. And I think something I’ve really noticed over the last 18 months is folks don’t want to be sold by a charismatic sales leader. They really want to be sold by the person building the product who understands their needs entirely. and can potentially be technical in helping them really think through how this potential sale integration purchase would actually work. And so for us, it’s been really thinking about founders that have this crossover skillset to actually be successful in founder-led sales, but two, they can actually outsource quite a bit of the work that a typical sales hire would be doing to AI. And so for us, I think that’s been a really interesting learning is they should really save their dollars and their resources for fantastic engineering hires. Most of the grunt work and luck work for go-to-market can be outsourced to AI, and the founders should continue to do the selling as long as possible.
Brian Bell (00:37:41):
If you could teach a course at MIT today, what would it be called?
Sheena Jindal (00:37:44):
Get to know all of your classmates because they’re going to do incredible things 10 years from now, and you’ll wish you’d spent a little less time studying and a little more time getting to know them.
Brian Bell (00:37:54):
That’s really good advice. I really think, you know, MIT is this, and I don’t think I appreciated it at the time, but I was incredibly fortunate to have seen excellence in what really smart people look like from a very young age. And you realize the real world just doesn’t have that same density. And so soak it up while you can and enjoy it.
Brian Bell (00:38:13):
Yeah, that’s what you do in an MBA program. I got my MBA in my 30s because I was in product and I noticed that all the CPOs I admired had MBAs. I was like, okay, I’ll get an MBA. And that’s all you do in an MBA program. You just network. Just get to know people, hang out, drink beer, do events. It’s basically all you do. That’s why they call it B-School.
Brian Bell (00:38:32):
Which skill from your BCG days do you still use?
Sheena Jindal (00:38:35):
Slide making. Slides fast. I’m a big believer in, I love the visual format of slides. I send out quarterly LP updates within 48 hours of the quarter closing, which I pride myself on. And they’re still, you know, 15 page-ish slide decks because it’s just how my brain works. And BCG taught me to make them fast and under pressure, which I’m forever grateful for.
Brian Bell (00:38:59):
That’s a great idea. I should probably take my newsletters, which are really long. They’re like 10 to 20 pages and just kind of put them in an AI like gamma or something and just generate a slide deck. You know, hey, if you just want to get the visual of what’s going on in the phone, just here, like flip through this deck kind of thing. But what’s your slide tool that you use?
Sheena Jindal (00:39:16):
I am old school still, so I still have PowerPoint on my laptop. And yeah, we beautify some things in Canva. But I like to, you know, it’s a great way for me to crystallize my thoughts as well. And slides have just been the output that I was raised on, for lack of a better word. And so here we are.
Brian Bell (00:39:32):
Yeah, I dream in PowerPoint because all my time at Microsoft, we ran the whole company on PowerPoint.
Sheena Jindal (00:39:36):
Yeah, exactly.
Brian Bell (00:39:39):
Like we’d have like 100, 150 slide, 150 decks.
Sheena Jindal (00:39:43):
Totally.
Brian Bell (00:39:44):
Insane.
Sheena Jindal (00:39:45):
Walking deck is what we call them.
Brian Bell (00:39:48):
Yeah, exactly. But it’s effective, you know, it’s easy to kind of get lost. It helps you organize stuff into like to distill the knowledge, you know, because you can, anybody can, you know, unlike Amazon where I came from Amazon, right? Rewrite the six pager and you have to write it all out with the FAQ, the PR FAQ. But at Microsoft, it was like everything was a slide.
Brian Bell (00:40:06):
What’s a mistake first time GPs make that you avoided or wish you had avoided?
Sheena Jindal (00:40:11):
I think first time GPs spend a lot of time on the narrative and the thinking and a little bit less time doing. And this is in the getting started phase. Like there seems to be this long process of really thinking about what the firm strategy is going to look like and how you’re going to be different. And yes, you should think about all of those things, but you also have to get out there and do it and get feedback quickly of if it’s going to work. You know, I think folks can spend a lot of time, years even, right? building out a firm and then to only go to market and realize that it’s not what LPs want or they miss the window. So I think one thing I really would encourage folks to do is if you’re ready to do it, just do it. You’ll get a lot of feedback from the market quickly of if your strategy is working.
Brian Bell (00:40:57):
Yeah. How do you personally stay sugar-free?
Sheena Jindal (00:40:59):
You know, we’re pretty disciplined at the firm around how we think about spending time. And I think for us, that takes a few different formats. Like my north star is to make sure that I’m spending 80% of my time with founders, whether they’re current portfolio companies or prospective portfolio companies. And so for us, I think one of the most significant drop-offs that can occur or where you can really get caught is in this limbo phase of like, you like a founder, you’re not entirely sure if you want to kind of make the deal happen, but you kind of still continue to meet. And we really do try to avoid that. So that’s why I mentioned that our drop-off rate is pretty significant. We only meet with 10% of the founders that we’ve met with for a second time. And when we do that second meeting, it really is with the intentionality of we’ve envisioned this company within our portfolio. So I think that saves a lot of time and saves us a lot of cycles. And then two, I’m fortunate that we’ve been able to leverage our portfolio company Smarty to do a lot of the work that I otherwise was spending a lot of time on. And so I truly am able to spend all of my time thinking about investing and really outsource all of the back office, all of the admin, all of the operations to a really fantastic chief of staff that’s able to handle a lot of stuff.
Brian Bell (00:42:15):
If you could co-invest with anyone living or dead, who would it be and why?
Sheena Jindal (00:42:18):
Man, this is a bit of a cop-out answer, but some of my LPs are people that I have admired over the years of investing. And so I feel like I get to co-invest with them now as we look at opportunities together. But I have always been really fascinated with how portfolio managers and hedge fund folks in particular think about the risk-reward trade-off in private investing. I find, you know, to each their own, for many it’s intellectual, but for many it’s really just they think about the public market portfolio that they have and they think about their private market portfolio as supplemental to that. And I think it’s really fascinating to think about how they’re assessing even seed stage businesses with things like cash flow and EBITDA potential and how they’re going to trade in public markets. And so I love we have a lot of hedge fund portfolio managers as LPs in our fund. And it’s really lovely to be able to have them in our year as we think about early stage investing and how this business could potentially trade 10 years from now.
Brian Bell (00:43:15):
So when people look back at sugar-free capital decades from now, what do you want them to say?
Sheena Jindal (00:43:19):
I really hope that we can create our mark and continue to be the center of gravity for technical founders and specifically MIT technical founders. And two, I really do hope that founders continue to see us as folks that have supported them throughout their life cycles. My goal is to absolutely support every single one of my portfolio company with dollars until their pre-IPO round. And we’re excited about that.
Brian Bell (00:43:43):
So last question, besides the legacy of Sugarfree Capital, what do you want your legacy to be?
Sheena Jindal (00:43:48):
I really hope that folks can just say that Sheena is high energy and fun to work with and high integrity. And I hope that, you know, this is the life’s work of so many of our founders. Sugarfree is my life’s work. I truly could not imagine doing anything else. This would be my last job. And so I really hope that that energy is shared amongst folks. And I think that’s why Founders love working with solo GPs and emerging firms. We’re in the trenches together. They’re building a company. I’m building a firm. There’s a lot of resonance with that.
Brian Bell (00:44:21):
Awesome. Well, thanks so much for coming on. I learned a ton. I appreciate you taking the time.
Sheena Jindal (00:44:25):
Thank you so much for having me.
