Lata Krishnan, Co-Founder of Smart Modular, shares how to make a husband-wife founding team work
Lata Krishnan, CFO at Shah Capital partners, Co-Chair at American India Foundation, previously Co-Founder & CFO of Smart Modular sat down with Shruti Gandhi of Array Ventures & Laura Mandaro of USA Today to talk about her journey and advice to couples co-founding and building businesses together.
Taking Risks
Lata, and her husband Ajay Shah, both grew in Africa before moving to US. Recently married, and with a baby, the decision to start a business definitely seemed risky. While billions of dollars in revenue, a 1995 IPO, and a successful partnership seems like a fairy tale, it started the way it starts with all entrepreneurs — with the courage to take a risk. In Lata’s words, “It all started with a conversation about a technology that Samsung electronics did not want to commercialize… and I said we could build this ourselves”.
While the financial pressures to build a manufacturing business were daunting, things quickly got moving as they raised $110k through friends, family, and personal savings. Very soon blue chip companies started paying for the product and the “Rocket ship” was off to a start.
Early Days
Lata’s background was in economics and finance. But as CFO she felt the key to success in the early days came down to the product getting traction with key customers, frugality with expenses, and working every hour of the day! The scrappy founders were spending all their time at the factory floor, cutting boards, packing the product into boxes, and even making runs to Costco! As every startup the company faced challenges but having a trusted co-founder made the journey better.
Spouse and Family
At a startup with limited liquidity, it may feel like all your eggs are in the same basket. Especially as a husband-wife startup there could also be the temptation for one of the partners to go ahead and find a paying job. What got Lata and Ajay through this phase was their motivation. There was a deep sense of desire to make this company successful. Working with someone you trust, someone equally motivated, and someone who also understands your responsibilities beyond work, was helpful throughout the journey. She did highlight that this may not be a recipe for everyone. “In our case Ajay, is a very supportive spouse, respects my own space, and my own responsibilities.”
The funny story was that because she went with her maiden name, “sometimes employees didn’t even know they were married…”.
The most challenging part was keeping work in the office and not bringing it home. This does require practice, and while they did early in the journey it certainly was healthier when they were able to avoid it later.
Their experience also set an example for her own children. Her daughter found that she wanted her to keep working. She mentioned that “I was at my best when I was doing my best work. Lot of wisdom for a young child”.
Investor’s reservations
While husband and wife leadership teams do exist (Flickr, Eventbrite, Lynda.com, PopSugar all have husband-wife founding teams), but there continues to be skepticism. Venture capitalist’s typically view couples who are founders as risky. In their case as well, this fact was mentioned as a risk factor in Smart Modular’s investment brochure. Their bankers had to evaluate the fact that they were running different parts of the company very carefully. Now on the other side, as a investor, Lata does come across this situation. She thinks it’s important for investors to meet with both partners/founders. It helps to get a better sense of the working relationship between them.
Entrepreneurship is hard and choosing a right partner can often make a difference for the company. Sometimes, that could be the same partner you trust at home!
Thanks to Akankshu Dhawan for helping with the post.
