By: Nate Bek
As Partner at Norwest Venture Partners, Priti Choksi is always on the lookout for “white spaces” — opportunities not obvious but hold immense potential.
“If I look at all the seminal moments in my life, it’s never been when someone handed me something and said, ‘go do this,’” she told Ascend in a recent AMA interview. “It's always been, ‘Oh, this seems interesting, I have no idea if it’s going anywhere, but let me spend some time on it and figure that out.’”
That curiosity and willingness to go above-and-beyond has been a driving force in Priti’s career, from her early days as a tech M&A analyst to her corporate development roles at giants like Google and Facebook.
Priti was a recent guest at Ascend’s AMA, a monthly session for portfolio founders where we bring in experts on relevant topics. She shared insights on scaling, exit strategies, Series A to Series B, and common pitfalls. Keep reading for our main takeaways from that conversation.
Scaling Culture: Google and Facebook’s Founding Strategies
Priti provided a comparison between the early hiring and decision-making cultures of Google and Facebook. Each strategy had trade-offs.
Emphasized academic pedigree and decisions came from the top down.
“The advantage is that you have centralized decision makers so you know exactly what’s happening within the organization, and I can pull resources in to actually be effective.”
However, this approach sometimes led to slower processes and decision-making.
Prioritized raw talent and innovation, under Mark Zuckerberg’s leadership.
“At Facebook, you manifested a culture that was driven by self-starters that weren’t used to being the best in the classic sense. But they were really talented at something and had something to contribute and something to prove.”
This agility fostered rapid growth but was accompanied by its own challenges: “We moved really fast,” Priti says. “But things broke a lot of the time in those early years.”
Priti highlighted the significant impact of these foundational choices for founders building companies — especially as the company scales and those initial cultural tenants compound.
“The first 100 people you’re going to hire are likely not going to look like the next 1,000 people,” she says. “But those first 100 people are the ones that are going to hire the next 1,000 people.”
Positioning for Acquisition: Building Relationships and Crafting a Narrative
For acquisitions, it comes down to the three T’s:
Tech — The startup has invested heavily in building its technology, and it’s way ahead of what the acquirer could build on their own leveraging their resources.
Talent — Sometimes it’s truly just about the startup’s talent.
Traction — The startup has substantial traction either by way of users, revenue or other key growth metrics.
Priti says savvy acquirers are thesis-driven, as a business might view an acquisition as a means to fulfill a long-term strategic goal: “In the next 3-to-5 years, sometimes 10, we are either going to build, buy or partner for those strategic capabilities.
“If we’re going to build it ourselves, we have a calculus of how much it’s going to cost. If we’re going to partner, we have a strategy on how to do that. But if we’re going to buy, it is likely because it is strategically important to us, but will take us too long to build, and it would be more efficient to acquire.”
The best acquirers make it an efficient process. “They have experience, which means you’re going to be treated well throughout the process. You’re going to have a very clear path to a yes or no, quickly.”
When positioning yourself, Priti says: “Founders should have vision boards — who’s my dream acquirer and what makes them that? Do they allow us to grow faster?”
Once top targets are identified, the next step is to start partnering, if possible, to get to know the acquirer. Priti says to build those relationships yourself, getting to know the product folks who will ultimately be the sponsor for any acquisition.
For founders, the acquisition process comes down to an alignment of values.
“You need to be able to articulate and understand their vision before you start sharing yours,” Priti says. “What do I need to know about their strategy before I can figure out how I fit into it?... Just slow down to have those conversations.”
Priti points out important questions for both the buying company and the startup to think about before they come together:
What will our joint plan for the product look like? How do we define success in the first three months and after one year?
What help will the buying company give us to reach these goals? (And what will we give in return?)
What can we offer to speed up this plan?
“Those conversations are actually more important than figuring out valuation,” she says.
‘Valley of death:’ Navigating the Series A to B Gap
According to Priti, Series B funding rounds have slowed considerably amid the broader venture market slowdown. This is an important milestone for startups, which Priti refers to as the “valley of death.”
To navigate this critical stage, Choksi advised founders to focus on three key areas:
Product — “Your product needs to be solid and your unit economics need to make sense. It needs to be at a point where, if we didn't do anything else but just put more gas on this, we can actually build a good company.”
Community — “Start building a community around you, with other like-minded founders who are ideally a bit ahead of you, either in your category or space. You can use them as an advisory board.”
Culture — “From an organizational perspective, at that point, start thinking about OKRs, goals, and measurement. Consider how you’re going to measure success against those things.”
Common Pitfalls: Ignoring Feedback and Lacking Grit
Asked about the most common reasons startups fail post-seed, Priti points to two key factors: not listening to customer feedback and poor execution.
“Most of the time, they're not listening to feedback from customers,” she says. “They’re operating in a world where they think they’re Steve Jobs — ‘Oh, I can design a better phone than you actually could ever imagine.’” Customer feedback will tell you how to evolve your product, so listen.
Execution, Priti says, is another common stumbling block. “I think most companies fail because of that… They say they want to do it, but they’re just not capable of whatever the execution requires them to do, or they’re not willing to grind.”
Ultimately, Priti says, it comes down to founder grit and perseverance.
“You guys are a special kind of crazy to go build companies. It takes a very special human to do what you’re doing. It is hard, it is never a straight line. There’s lots of squiggles.”
