Shardul Shah of Index Ventures on Why the Founder Is the Investment Thesis

Shardul Shah (0:00)

I think I'm too idiosyncratic to be understood over ZIM.

And the reflex of that is like, I can't read people particularly well over ZIM. As a consequence, I no longer take first meetings over ZIM.

Peter High (0:16)

Welcome to Technoventure. I'm Peter High, president of Metis Strategy. My guest today is Shardul Shah. Shardul is a partner at Index Ventures, one of the world's leading venture capital firms. Index invests across stages and geographies, backing entrepreneurs behind companies, including Figma, Revolut, Discord. Shardul joined the firm in 2008 and focuses on cyber security, artificial intelligence, enterprise software, and infrastructure. He's developed a remarkable track record of identifying category-defining companies early, leading investments in Datadog and Wiz, among many others. Recently, Datadog is now a public company, actually not so recently, but Google recently completed a $32 billion acquisition of Wiz, the largest acquisition in the company's history.

Shardul's investment philosophy centers on backing exceptional founders with conviction and partnering with them over the long term. That philosophy has earned him repeated recognition on the Forbes Mitis list, and a reputation as one of the leading investors in enterprise technology, including his current ranking on that list at number 10

In today's conversation, we'll discuss what Shardul looks for in extraordinary founders, lessons from across the companies and entrepreneurs he's invested in, how AI is reshaping enterprise technology and cybersecurity, and where he believes the next generation of category-defining companies will emerge. Shardul, welcome to Technoventure. It's always a pleasure to speak with you, and I appreciate you making time for me today.

Shardul Shah (1:35)

Peter, it only took me a decade to get on. Thank you.

Peter High (1:40)

Worth the wait, that's for sure.

Well, Shardul, I mentioned a little bit of the background in index and some of what makes it unusual. I wonder if you take it from there and talk a little bit about the firm that you help lead.

Shardul Shah (1:53)

Yeah, you know, I think the most amazing part of index is over 30 years, we've had so many different partners contribute to our outcomes. That diversity is really unusual in our industry. The process that supported those outcomes is a craft that focuses on people and relationships. We'll come back to that as we talk about you, as well as other stories.

And ultimately, the culture that supports that craft is something that I take really seriously in cultivating confidence within our group to take the courage to make investments across stages. And so 30 years in the making, and we've got a long way to go.

Peter High (2:45)

Fascinating. And I wanted to talk a little bit about Shardul, the areas that you focus on. I mentioned some of those at the outset. They include cyber security, artificial intelligence, enterprise software, infrastructure.

How did those lanes become areas of focus for you? I mean, logical when one contemplates the opportunities associated with each, but how did those become lanes in which you swim?

Shardul Shah (3:07)

Yeah, the truth is, I'm not really a market investor. I've met some really talented investors who can see the future of markets. Because of my inability to do so, I've been able to hone a craft on really becoming a student of entrepreneurs and people. So some of the early work in different verticals, whether it's cyber or infrastructure, was by luck. I just ran into a few people who I really connected with, and started building a community around myself that I became entrenched in. So early on, I created a engineering community at Index, and it turned out some engineers were oriented around businesses that were selling to enterprises, and as a consequence, I got to know enterprise buyers.

Eventually, I got to know you, and your voice has been in my ear ever since.

Peter High (4:12)

Very kind. I'm so glad our paths crossed, and it's been just wonderful getting to know you and partnering in a variety of ways as well. Shardul, you mentioned that.

I wanted to mention also, I want to cover a lot of things you already just mentioned here. Before we get past the overview of Index itself though, as I mentioned in the intro, you invest from seed through growth stages with a single investment team, rather than separate stage-specific parts of the organization. And I wonder how does that influence the way in which you evaluate companies? How do you think with a different hat on, different lens in front of your eyes as you contemplate an idea that doesn't yet have product market fit versus one that very much does, and you're simply putting gasoline or not so simply, but in fact putting gasoline on a fire that's already blazing?