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Superhuman to Super-Angel: Rahul Vohra Discusses His New Rolling Fund

Superhuman to Super-Angel: Rahul Vohra Discusses His New Rolling Fund

Rolling Funds allows investing duo Vohra and Todd Goldberg to broaden their LP base, raise money differently
rahul vohra discusses his new rolling fund

Superhuman founder and CEO Rahul Vohra keeps busy running a fast-growing company and two angel funds on AngelList. (We spoke to his fund partner Todd Goldberg back in April to get the skinny on their recently launched fund.)

Vohra sat down with AngelList’s Seif Salama to discuss:

  • His experience launching a Rolling Fund
  • His advice for founders seeking funding, and 
  • The multiple paths to success he sees available to new investors.

Seif: How did you first get into tech?

Rahul: Software has fascinated me ever since I was a boy. I was fortunate that my dad bought a 286 computer when I was growing up, back when computers weren’t so common. He bought it to write his PhD thesis and, when he finished it, I was able to play with the machine. Through consistent poking, day in day out, I taught myself how to program — first BASIC, then C, then eventually C++. 

I programmed for ten thousand hours before I went to formally study computer science at the University of Cambridge. I came to realize that with software, you really could build anything.

Seif: What brought you to San Francisco?

Rahul: I moved to the Bay in 2010 to start my last company, Rapportive. We’d gotten into Y Combinator, so we came here to take part in that program. It then became obvious that if we were to scale, grow, and one day sell this company, we had to be here.

Seif: How did Superhuman come to be?

Rahul:  Superhuman came from my experience with Rapportive, which was the first Gmail plugin to scale to millions of users. I sold that company to LinkedIn in 2012 and oversaw all email integrations for LinkedIn. We witnessed Gmail becoming worse every single year — getting cluttered, using more memory, slowing down machines, still not working properly offline. And on top of that, each new plugin made each of these problems dramatically worse. 

We imagined an email experience that is blazingly fast — where every interaction takes place in 100 milliseconds or less; an email experience that allows you to fly through your inbox without ever touching your mouse; an email experience that works offline so you can be productive anywhere; an email experience with the best Gmail plugins built-in; and an email experience that  subtle, minimal, and visually gorgeous. With that vision, we built Superhuman. 

I’m happy to say that today Superhuman is the fastest email experience of all time. We just wrapped up some analysis: not only do our users save hours per week, 36% of all users now hit Inbox Zero within the onboarding itself, and more than 50% of all users hit Inbox Zero within 4 hours of using the product. It’s been quite the fun road!

Seif: How did you get into angel investing?

Rahul:  I started with the money I made from the sale of Rapportive. I saw it as a way to stay in touch with smart, hyper-ambitious people who were building cool products with interesting technology. I like to keep my ear to the ground.

Some of those initial companies ended up doing really well, and I began to realize that there was tremendous upside to investing. It’s not just the money you can make, but also the opportunity to learn from these other founders. I realized that the more I invest in great founders, the more it inspires me and teaches me to become the best version of myself. 

Nearly two years ago, Todd Goldberg — a successful founder and a good friend of mine — approached me about a fund he was starting. He invited me to be an LP, and then I pitched him back. I said, “Here’s something to consider: because we like co-investing, and because Superhuman is used by most founders in the valley, how about we do this fund together?” We were both blown away by what we’ve been able to achieve with AngelList, and we raised twice the amount that was originally planned.

Seif: What’s your investment thesis? What do you look for in an investment?

Rahul: We look for founders with a very specific magic combination. First, they know how to make something people want. Second, they know how to make people realize they want it. If a startup only has one of these, it will not be able to succeed. 

We also look for founders who demonstrate exceptionally high levels of grit. I think of grit as a combination of passion and perseverance. Passion for me means the founder will not easily get distracted with new interests or goals. Perseverance means the founder will follow through with hard things despite immense challenges. 

We also look for the possibility of a $1B dollar outcome. Many times we end up passing on great founders with good businesses because we were not able to get to the conviction that the business would be a massive outcome.

Seif: At what stage do you invest?

Rahul:  We manage two funds on AngelList. The first is a $7.3M early-stage fund. We’ve deployed about 70% of that fund into 42 companies and anticipate we’ll stop deploying around Q1 or Q2 of next year. 

We also have a Rolling Fund for later-stage investments.  We started this fund because we now see a significant number of follow-on opportunities, both from our early-stage fund and also from our previous angel investments.

Seif: How do you define early-stage? 

Rahul:  We define it as a company with less than a $100M valuation. Beyond that, it’s an opportunity for the later stage fund.

Seif: Why did you decide to manage both funds on AngelList?

Rahul: We evaluated a lot of options. We could either manage the funds on AngelList and have them take care of everything — including the back office — or do a lot of work directly with a law firm. We chose AngelList because of how easy and cost-effective it is.

Seif: Why did you decide to use a Rolling Fund for your later stage fund?

Rahul: It was partly curiosity — we wanted to experiment with a new platform. More importantly, it gave us the opportunity to do things differently. With a Rolling Fund, we can talk publicly about the fund while we’re raising money. We can open it up to a different LP base. And we can work with LPs that we otherwise did not have room for in our early-stage fund.

Seif: What differentiates your fund?

Rahul: First, Todd and I had been co-investing together for six years. Second, we’ve both made several very successful angel investments. Third, we have a compelling story for founders today. It’s fairly obvious why founders want to take our money — it’s the unique combination of a more than a full-time general partner in Todd, and the ongoing connections, audience, and operational experience that I can provide as an active founder and operator.

Put another way, we’ve got one GP who’s 200% on the fund and one GP who’s massively involved in running a fast growing company. We’re bringing the best of both worlds to founders. It has also proven to be a compelling pitch to LPs.

Seif: What advice for founders, especially in the midst of a recession?

Rahul: If a good investor is offering you money on decent terms, my general advice is to raise the money. Maybe you don’t want to raise more than $100M because the liquidation preference gets silly or it’s so far beyond your traction. But generally speaking, if a good investor is offering you a good deal, you should take it.

Obviously, the markets are doing really well, and that appears to be a combination of two factors. Election notwithstanding, in the last week or so we’ve seen lots of positive news about not just one but several vaccines. Also, December is generally a strong month for the public markets.

The upshot for founders is this is actually a really, really good time to raise money. At the very earliest stages, it’s that magic combination of angels feeling relatively wealthy overall yet also uncertain about the future of the public markets. That means they will be looking for ways to deploy capital either directly into a company or into funds like ours.

Deal velocity for early stage investments has really increased, and I would describe it as a frenzy. On the other hand, the bar for investments has also gone up. I’m often seeing investors dig into things that they might not have dug into this time last year — things like unit economics and capital efficiency.

Seif: You moved to the Bay because you felt you needed to be here for Rapportive to be successful. Is that still the case for founders?

Rahul: No, that’s no longer the case. Investment deals are becoming significantly more geographically diverse. In fact, I can't remember the last time I met a founder in person. We’ve invested in over 40 companies, and I’ve met only a handful in person. It’s no longer the case that you have to be within a short drive of Sand Hill Road to raise money.

Seif: What’s your advice for investors starting out? 

Rahul:  Number one, be pretty clear how you’re differentiating. There’s a plethora of fund managers. You have to have a clear and credible story for how you are going to not only find the best companies — but find them before it’s obvious they’re the best. How will you find them before the likes of Andreessen Horowitz and Sequoia?

The second thing is something that Todd and I learned over time: there are multiple paths to success. You can build a position over time. Companies are growing faster than ever before and are becoming bigger than ever before. As a result, they're constantly fundraising. 

If your standard check size is $200k but you can only get $50k or $75k into a company, it might still be worth doing. You can then build a relationship with the founder, astonish them with the value you can deliver, and get ahead of the next round.

Just like a startup, it is important to have a strategy and constantly improve it as you learn.


Disclamer:

Quotes included in these materials related to AngelList's services and should not be construed in any way as an endorsement of AngelList's advice, analysis or other service rendered to its clients. Investing in venture capital funds is inherently risky and illiquid. It involves a high degree of risk and is suitable only for sophisticated and qualified investors. Performance of past deals or a lead investors' track record is not a guarantee of future returns. Any investment in venture funds, including AngelList funds, involves a high degree of risk and is suitable only for sophisticated and qualified accredited investors. This interview and the information contained herein is provided for informational and discussion purposes only and is not intended to be a recommendation for any investment or other advice of any kind and shall not constitute or imply any offer to purchase, sell or hold any security or to enter into or engage in any type of transaction. Any such offers will only be made pursuant to formal offering materials containing full details regarding applicable risks, minimum investments, fees, and expenses.
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