Former Formation 8 GP Shirish Sathaye joins Cervin Ventures

Longtime venture capitalist Shirish Sathaye has quietly joined early-stage investor Cervin Ventures as a general partner.

Most recently, Sathaye was a general partner at Formation 8, the embattled venture firm co-founded by Palantir’s Joe Lonsdale, Brian Koo( a scion of the Koo family, owneds of the electronics giant LG) and former Khosla GP Jim Kim. Formation 8 announced in 2015 that it would not create a third money and would begin winding down operations .

Sathaye, who’s been in the VC business since 2001 as a GP at Matrix Partners, then at Khosla Ventures, remains a partner in Formation 8′ s sophomore fund. His previous investments include Nutanix, Samsung-acquired Grandis, McAfee-acquired Solidcore System, cybersecurity startup Vectra Networks and data storage provider Panzura.

He’d merely been at Formation 8 for one year when the firm began to crumble. As we have known, conflict between the firm’s founding partners led to its demise. Lonsdale speedily created $425 million for a spin-off money called 8VC ;~ ATAGEND Koo, in a similar fashion, brought in $357 million for Formation Groupand Kim followed up with a $200 million fund called Builders.

Sathaye, for his part, had grown tired of the” bigger is better” mentality and opted to leave the business of big VC for good.

The death of once high-flying VC funds

He began making angel investments and advising startups at Cervin Ventures, a pre-Series A VC fund focused on the enterprise. It closed a $56 million money in 2017, its largest vehicle to date.

” Smaller monies, in general, make better decisions ,” Sathaye told TechCrunch.” At a larger money, there are more people around the table to make decisions. I think returns are better when there are fewer people building those decisions .”

Watching funds swell past the billion-dollar mark and investors deploy the” spray and pray” strategy was a turn-off, Sathaye said. Startups have more access to capital than ever before, yet most companies can get off the ground with very little fund, thanks to recent innovations like Google Cloud and Amazon Web Services.

” With AWS, companies can bring products to marketplace quickly and they can reach their clients with much less fund ,” Sathaye said.” If you look at it only from a returns profile, the smaller funds will get better cash-on-cash returns simply because companies don’t need that much money to be successful .”

Palo Alto-based Cervin is led by two other GPs, Preetish Nijhawan and Neeraj Gupta. It expends$ 1 million to$ 2 million in early-stage startups. Sathaye says he’ll be focused specifically on the security, mobile, cloud and data verticals.

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