What does it truly mean to be a ‘product-first’ venture capital firm? In a world saturated with startups, identifying companies with genuine, sustainable product-market fit is both an art and a science. We had the pleasure of sitting down with SC Moatti, the founder of Mighty Capital, a VC firm built on this very principle. With a rich and diverse background spanning academia, entrepreneurship, and now investing, SC brings a unique perspective to the table. In this episode, she delves into her decision-making framework, what distinguishes a great product from a great product manager, and the essential skills needed to succeed in today’s tech landscape. She also shares insights from her experience teaching at Stanford and serving on boards, offering invaluable advice for founders and aspiring investors alike.
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Nataraj: You have a really interesting, diverse set of experiences. You have an overlap from academia, you did your own startup, and you’re also doing investing. Very few people have these interesting vantage points. I thought it would be great to have you talk about product development, venture capital, and your experiences. To get started, can you give a little background on what you have done in your career for our audience?
Nataraj: Are all the companies that you mentioned investments from Mighty Capital, the fund that you’re running, or are they angel investments?
Nataraj: Talk to me a little bit about how you are making decisions. Everyone has their own frame of decision-making, especially in the early stage. When you say “product-first” and identifying product-first companies, what does that mean in practice?
Nataraj: How many investments does a fund make? Is it like a traditional venture fund where each fund is making 30 or 35 investments per fund?
Nataraj: Does Mighty Capital operate like a traditional fund where you’re making 30 or 35 investments per fund, or are you operating in a different model?
Nataraj: You’re also teaching at Stanford about startups. Can you talk a little bit about what you teach and what that experience has been like?
Nataraj: What are some of the mistakes?
Nataraj: What does it take to be an effective board member when you’re investing at a Series A stage?
Nataraj: One of the things we keep hearing in terms of governance and startups is because of this dual-class shareholder system, there isn’t a lot of control on the board’s side. Is that how your experience has been? Is that a real trend or is that just people who don’t understand things talking about it?
Nataraj: A common commentary around startups and boards has been that the boards don’t have full control because of dual-class shareholders and they can’t really have a real implication on what the founder is doing. Do you believe in that, do you see that changing, or is that just not the right way on how things actually happen?
Nataraj: You also mentioned your students come with a lot of exposure to public investing. What is your take on how much focus there is on looking at data when you’re doing early-stage investments, given there isn’t much data available?
Nataraj: To follow up on that, are there any specific things that you as an investor focus on more? For example, in my case, when I do pre-seed investing in SaaS, one important factor I focus on is whether one of the founders can really write great code or execute faster. That is one point I definitely want to have. After years of figuring out what a great pre-seed startup looks like, I’ve found that the only thing that really matters for me is this. Do you have certain criteria or things that you, through intuition or experience, focus on?
Nataraj: It’s amazing. I’ve faced this when we are trying to get into a pre-seed round and some large investor comes and takes the round; that’s a very common scenario. I think 80% is pretty high, especially when you’re co-investing with such large brands. I want to get back to the notion of what makes a great product. I know you’ve written a book on it. I want to split this into two parts: what makes a great product, and what makes a great product manager?
Nataraj: I definitely agree that one of the best ways to start a startup is to come with a big idea rather than a small one. Take a big idea, but create a smaller approach to that big idea. A lot of entrepreneurs misunderstand that and they pick a niche category thinking that it will blow up into a big category, but eventually, they realize that fundraising will become hard because there’s no bigger story to tell. If someone is starting out to become a product manager, what are the meta-skills that they should focus on to become a better product manager or product builder?
Nataraj: We are almost at the end of our conversation. I wanted to ask a couple of questions that I ask all my guests. The first one is, who are the mentors that shaped your career or helped you progress?
Nataraj: You can give names or books or partners you worked with that helped in your career.
Nataraj: Do you have any favorite books that you go back to or are actively reading right now?
Nataraj: If someone recently graduated and wants to get into product management or investing, what would be your advice for them?
SC Moatti: There is going to be more to learn and more to do. But getting started on why you’re here on earth, what you are here to accomplish—you’re ready for that faster than you think.
Nataraj: What is the best way for the audience to reach out to you?
SC Moatti: I’m very easy to find on LinkedIn and on social. And if you want to drop me an email, it’s sc, just my initials, at mighty.capital, no dot com.
This conversation with SC Moatti provides a clear and actionable framework for understanding what it takes to build a successful product and company. Her insights into the mindset of a product-first investor are essential for any founder seeking to navigate the venture capital landscape.
→ If you enjoyed this conversation with SC Moatti, listen to the full episode here on Spotify or Apple.
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