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If I put you in a room with 10 entrepreneurs, one of them in the next decade will become a billionaire. The other nine won't. What are the other nine people doing wrong versus the one who did right? A lot of people are
Top VC Sasha Mi Chundani shares traits of billionaire founders, pitching tips, and insights on building successful startups.
Key Takeaways
- Founders driven by personal pain points outperform opportunistic entrepreneurs 9 to 1.
- A strong founding team requires complementary skills: a builder and a seller.
- Simplicity and clarity in pitch decks increase chances of investment success.
- Conscientiousness and persistence are critical personality traits for founders.
- VCs value founders who are genuine, adaptable, and focused on solving real problems.
What the video covers
- Only one in ten entrepreneurs typically becomes a billionaire due to having a clear personal pain point driving their startup.
- Successful founders possess traits like conscientiousness, relentless problem-solving, and a strong work ethic.
- A founding team needs at least a builder and a seller to succeed; entrepreneurship is fundamentally about selling.
- Pitch decks should be simple, clear, and limited to 10 slides focusing on team, problem, solution, product, traction, competition, and funding ask.
- Sasha shares personal stories about his upbringing and lessons from his father emphasizing humility and hard work.
- VCs look for founders who are committed, adaptable, and able to navigate tough market realities.
- The importance of genuine passion and solving real problems is emphasized over opportunistic entrepreneurship.
- Sasha discusses sectors hot in the VC world and how investors allocate capital based on market potential.
- The episode includes practical advice on startup logistics and managing growth costs effectively.
- The conversation highlights the value of patience, founder support, and resilience in the entrepreneurial journey.
Chapters
- 00:00Introduction: Why Only One in Ten Entrepreneurs Succeed
- 07:08Personal Stories and Lessons from Sasha's Upbringing
- 14:47Traits of Successful Founders and Building the Ideal Team
- 22:09Pitch Deck Essentials: Simplicity and Clarity
- 29:03Competitive Founders and VC Investment Strategies
- 42:22Supporting Founders Through Tough Times and Growth Challenges
- 49:10Sector Focus and Future Trends in Venture Capital
- 60:04Final Thoughts on Persistence, Passion, and Genuine Entrepreneurship
Full Transcript — Download SRT & Markdown
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starting companies because it's sexy, opportunistic, but not really for the right reasons. So the main reason a really good company is created is there is a pain point to solve that the founder personally had or someone close to them. So those founders are the best
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of the best because you have a clear purpose. These founders and founding teams, we believe, outperform the, let's say, opportunistic founders 9 to 1.
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Sasha Mi Chundani, founder and managing partner at K Capital and co-founder of Mumbai Angels. If you want to understand what a top investor really bets on and how great companies are actually built, this episode is for you. Tell me, who are
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the top three or four people you need in a founding team and what kind of skills they should have so that people can build their ideal founding team? You need someone who can sell.
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Entrepreneurship is selling. There is no business without someone who can actually build the product. Can someone be a great salesperson who or she's not only selling the company but raising capital, getting in front of people like me?
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So you need a seller and a builder. Yeah. You said founder is everything. How do you identify the right founder?
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One, Raj, is personality traits. This founder or founding team, are they entrepreneurs that are hell or high water, but look, no matter what, they will figure it out. No excuse. And what are the other traits? Traits of success, Raj,
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is are you a conscientious person? You say what you do, you'll do it, which is very important. Talk is cheap, but are you really doing it? Give me a step-by-step formula to make the best pitch deck and the easiest
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pitch deck will give you high conversion. If I had to see 100 pitches, 90 will be cluttered. Entrepreneur, more data, so the more excitement comes. Actually, I want clarity of thought, simplicity. That is what works. How many slides? Maximum 10 slides. What
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should be the first slide? I like the team in the front. Okay. Problem about solution and then why now? About one slide on product. If you can show us how it works on a video, about traction, competition slide, one
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slide on how much money you want to raise. That's it. Who is the most competitive founder you've met? What has he done? People forget that when to only a couple of thousand crani last year. Remarkable.
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If I give you 100 crores today and I show you five sectors, how much money will you put where? We'll give you chips and you put the poker chips on five sectors which are hot and booming in the
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VC world right now. Okay. So, these are the only options I have. These are the only options you have.
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So, 50%. What is a personal problem that you're going through today for which you'll pay someone if they solve that problem for you?
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I have a small favor to ask you. I need you to subscribe to our channel. The more subscribers we have, the better and bigger guests we can bring and provide you more value through these conversations. And the full audio
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experience of this show is also available on Spotify, where you can follow us and listen to the new episodes as well. As a startup grows, the logistics needed to run it grow too. And those small costs start adding up faster
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than you can handle. That's the exact problem Porter Enterprise solves. Instead of getting a separate bill for every single trip, you get one consolidated invoice for everything, which keeps your accounting organized and fully GST compliant. You also get
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Why do you think you're loved? Because I had firsthand experience. I don't have to talk about myself, loved or not loved. I think we want to be genuine people, like genuinely have the entrepreneur tough time,
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but at the end of the day have the best interest of the founder also in place, not just our best interest, and be patient and see we've been entrepreneurs ourselves, so we've seen tough times, straight line life. How can we help the
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entrepreneur through the tough times to come to where they are? True. Is it true like your own story starts with you were not able to raise funds and that's why you started K Capital? My story is very different.
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So I had actually joined my father's business. So my father is founder and of a company called Onidita.
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So when I joined, the company was at its absolute peak. It was doing phenomenally well. And I thought within 6 months director and then MD, and guess what? I became a director of Onidita last year. Maths 1995.
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I joined 2025 career. Yeah, you see the public records, 20 years you became director. Yeah, my father in your own father's company.
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Yes. So my father, that was the biggest reason for wherever I reach today because my father said no entitlement, boss, you must do it yourself. So day one, first thing he said was I said in your car, he said no, no, you
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must take the train out of India for so many years. So I've been out of India and living in a parallel universe and station till today I can remember that thing. I was like what, like there's thousands of people, and so
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because I was just like paranoid, not paranoid, but I was like in shock, 2 hours to reach Malabar Hill madness.
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Next day again I went, my brother. So my brother said, "Dude, you have to do this. You can't waste my time. I'm not coming to taxi with you again." In fact, sorry.
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So I said, "You know, life, what is my ethos? You have to jump into it. You cannot be sitting on the sidelines." Somehow I managed to get in the train.
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So entitlement. But no one told me that the huge crowd will come running in and my back smashed. I think back smashed my back. I was like damn, what is this? Welcome to Mumbai moment, you know, and then of course the very
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next day I went and then I became an expert of trains, no problem. And my dad said only second class, no first class train, second class up and down circles. They south Bombay kids, they would tell me, Sasha, so how many bathrooms does the
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train have? I said boss, you can't stand, which world are you living in? But that really toughened me up and then my father said area sales manager. I remember first day come, of course I said amazing job, same thing one week later I went back to
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the same shop. So that was the reality that, okay, and I realized how hard it is to sell even one television, you know, without the support of having been Gurumani's son, where the average employee in my company, young executive
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join and we were at our peak number one brand in India, but TV because so competitive, you got to find a reason to sell that television. And so then my father said you must get more experience. So then Mangalore, Mangalore
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branch. So Mangalore, I've never been to a small city in India, hotel five times a day.
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True. But all these experiences really taught me only one thing: appreciate what people have to go through at the bottom to go to the top.
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But why would you were born in privilege, right? You were born in a very rich family in Malabar Hill. You went to states, boarding school, all of that. So why does your father want all of a sudden for you to leave that privilege
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and start from scratch? Because I think he wanted to, I never asked him this question actually, but I think my guess is that he wanted to not have entitled children, and he came through the struggle. See, when he
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graduated from BITS Pilani, there was a very tough time. It was the 60s. Everybody from his class, 90% of them, maybe more than 90, US guy, someone got a job in Tata, someone got Billas, and he was, he was the only
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entrepreneur from that class from what I remember, right? And then obviously subsequently more entrepreneurs came out a
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um late 99 2000 may I was attending a talk um I think it was a YPO talk so I won't talk about who the person is private talk very u very famous industrialist was speaking and he spoke about how we
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move from textiles to pharmaceuticals and the reason was simple okay move to a better industry so I just thought about I said you know what we are in electronics as a family but it's a very hard industry low margin
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tough to build real value only very few companies at that time Sony and now of course subsequently Apple have built multi- trillion multi-billion dollar businesses at least Apple now of course is multi- trillion so I said what else
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can I do so I just kept it parked in my head this thought and then thought and then one day another thought came to my head my father gradu from Bits Bilani when he when he started his first
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company it was so hard to raise capital second company so hard to raise capital finally chall damn hard to raise capital but that was in the late '7s early 80s. Now fast forward to 20 25 years later situation
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same awesome access to capital but endorse why not him maybe Raj is much smarter than me so why can't he get the capital so now I'm not some Gandhi but I just felt that that's not fair was thought
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okay what about you know getting into a new industry so time 99 2000 VC industry barely existed in India so there was no VC concept concept never mind But concepts are can we help entrepreneurs and at the same time get into a new
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industry? So I went to my dad I said dad how about we do this and being an entrepreneur he thought very good idea I said kiran kiran chandra he was I am kolka become my very good friend till today
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you're very smart I want you to do one favor for me any awesome entrepreneur you find I please tell me I would love to meet them and this is what I want to do he was also confused I said
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so he started making me meet entrepreneurs so finally When I met this one team, I immediately liked them. I said, "Wow, what a great team." And they had not come for funding. They were also confused.
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And they were a comparison website comparing products. So they motive to come was Sasha can you give us some TVs.
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We like to compare them and put it on our website saying this TV is better than that and this this this and Raj can buy it or not buy it. And so anyway, maybe then a few months later they came
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back and they said you know what remember we talked about raising capital if you're interested we can do it so I thought why not you know uh let's talk so to cut a long story short a um and uh I really like them showed it to
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my father he was a little bit confused at that point and he said you know not sure but um we had people uh on our board uh who my father respected a And I spoke to one of those gentlemen
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and he said okay I would consider doing it and that time my dad said okay I think it's a good idea let's just do it.
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So this became my first investment we invested from the onita balance sheet deal. Now within 3 months my father put a new board of directors in the company and many very prominent people like Mr. Harsh Mari of Americ
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said they this is a software company. Uh we had pivoted and I'll explain that story also why is a listed TV company investing in software and I had no rational reason. So that's when I went and bought the shares out of the company
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and that's my first investment. That company uh 25 years later became Fractal Analytics. I know.
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So it was a great journey. It still is. I'm still on the board and Shikant and Bunny have done an incredible job. Uh it started as voodoo.com and became fractal analytics.
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So so why did you invest in voodoo.com? Just the founders. I did a lot of diligence on them. Uh a lot of diligence investment but at the end root cause of any investment is founders and then over the years
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but initial check and like this is this is a theme in across all your most of your companies right.
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as an as an investor, you've invested in a lot of companies. There have been great outcomes as well. But look at fractal analytics, right? Porter death. So multiple times this is the theme. Why? Because uh clear uh insight that you know company's all
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about the entrepreneurs and the best founders will figure it out. You start obviously in a dream world market but most often things change when you hit the ground running right and realize oh god your market actually was not what
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I thought. So can we move fast enough? Can we think quick enough to move and do things that are different in some cases in Fractal's case?
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So when we decided that that was not going anywhere but by then I already started to like the founders a lot.
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So we had two choices and they were very mature people. So I say yeah look our rockstars we are with you just let's fold up the operations here and then you all come up with any ideas you may have within IT which is my
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original plan I want to get into IT industry but that's if it makes sense to you all and 3 months later they came with a plan which became at that time data mining which then morphed into AI which is now
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AI company and that's where we are in I remember we may need a board leading this coach company.
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You're a rockstar. You quickly figure something out. And he was probably the most um probably the most fastthinking entrepreneur I've ever funded. The most flexible and quickest to really figure this out.
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Finally, we had a meeting in opera house. I remember fourth plan. And I was like, but now I got this new plan and just two two and a half cr funding and the rest is history. Today it's you know
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the largest you know mobile advertising company out of India in moi India's first unicorn and now they're building this whole glance.
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Yeah phenomenally well company and it was in India's first unicorn right? Yeah 2011 those million from soft bank that's a story by itself. You said founder is everything right regardless of sector company right how do you identify right founder
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you know this is an evolution um but maybe I'll come to the main point and I can talk about other things as well one Raj is uh personality traits what we're looking for are are hell or high water this founder or founding team
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maybe to be fair to the founding team are they entrepreneurs that are hell or high water no matter what they will figure it out no excuse I remember you know I mean lucky enough to have deep kala as a LP investor in our funds so
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whenever I meet him I call him so he's a complete legend please understand make my trips journey and how many times they almost died and how they rewald their companies it's incredible like I think 2001 I don't remember so suddenly your
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company with 4 500 people is down to maybe 20 30 people and restart but will not die I refuse to die come hello high water you see book my show Ashani will be invested in our funds same thing multiple crashes
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at one point he went from 300 people to six this week news. What an incredible story.
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Yeah. Right. Shiprocket, right? Amazing story. He told us a story about once when he was down to 1 cr. But he told his team 1 cr we will not die and be IPO 40% up. What an incredible guy and not only him but
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all his co-founding team. What a story, right? So I refuse to die. I will figure it out. But identify entrepreneur quality that entrepreneur refuses to die. So what diligence entrepreneur? We do a lot of questions. So for example,
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we ask all the personality trait questions that I asked. How conscientious is the person? The number one trait of success Raj is are you a conscientious person? You say what you do, you'll do it. Which is very important. Talk is cheap.
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But are you really doing it? Is this the person that if he or she says it, they will figure it out. Hello high water and do it. So conscientious is very important. Determination never give up. And some of the one of the key
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questions we ask is among many others is yeah individual tell us an example where from all reasons said that he or she should give up doing this. It's like it's too hard cho but he or she didn't give it up and
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figured out a way to solve it and now here they are in that particular business they were working or that job they were working that gives us clear traits of how determined that individual is that everyone else.
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So that's something that we because we're coming to you know when we do your company it's just a conception is nothing there's no balance sheet there's no P&L statement it's just three four young founders not young but depends on what age we fund
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them but new founders and then but you'll try to find out in their journey specific points where they have not quit yeah that's one trait is one trait and what are the other traits the Other traits are at the end of the day are they
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complimenting each other teams you know because if you get two Rajes what's the point are you complimenting each other does each of them bring something to the table that is complimentary to each other which is very very important so a
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good founding team is smart they say okay let's get so and so for this skill so and so for this skill maybe even a third and that's makes a lot of difference tell me who are the top three or four
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people you need in a founding team and what kind of skills they should have so that people can build their ideal founding team.
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You know at the end of the day all this evolves fair. So what you need in day zero is very different from day 1 to day three to day four or day five right but like one of another skill set we need is
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clarity of thought you know like how clear is him or her in explaining their pitch to us. When you see a muddle pitch, you know that this entrepreneur is going nowhere.
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I should be fully engaged into the pitch by then. And to your question, you need a builder. You need someone who can sell. See, entrepreneurship is selling.
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What are you selling? Nothing. There is no business. Fair, right? Then someone who can actually build the product because if you have a crappy product initially, but after some time it kind of peters out. So can someone build a world-class product? Can
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someone be a great saleserson who or she's not only selling the company but raising capital getting in front of people like me? And then of course the third could be other parts of the business as his skill. But that's what
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we need initially. So you need a seller and a builder. Yeah. Have you seen any founder who has both these qualities together?
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Yeah. Who's a seller and a builder together? Yeah. I mean we see so many um so many founders like that and sometimes right everybody's doing everything as they scale then they realize okay I'm still good at selling I'll continue but
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the building part I'll leave it because I can get someone much better than me or he or she comes and then the company just moves who is an exceptional founder you've met who seller and builder both someone like Sri Khan welcome me or
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fractal he can he loves to build so if I if you go with me to the office today you never know he may sitting and developing something. He's genius. I mean time limit though. He's too busy right now. But and he can sell to
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anybody. He's too good. See? And why is this quality so rare? Because so many people all around the world talk about it and they say that a builder is very rarely a seller. A seller is very rarely a builder.
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But that's why it's rare because it's so hard. I mean if you want world class, right?
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Like a lot of people use terms like dreamer and developer. That's right. So you need a dreamer, you need a developer.
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You know, you have to dream big like okay like you know it's not like see when they come in front of me what are we looking at? We're looking at 50x 100x outcomes. We're not in the business of bunts. We're in the home run
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business. M so that entrepreneur entrepreneur team has to come just not to me but to my partners and my colleagues and show us that they're building something insane interesting let's say if I put you in a room with 10 entrepreneurs okay one of
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them in next decade will become a billionaire the other nine won't all of them look like they have great ideas they've all raised funds they're exceptionally good founders look like it at least in the seed fund what are the
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other nine people are doing wrong versus one who did right? You know the one who doing right is doing it for the right reasons.
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What do you mean by that? I mean, you know, when we ask entrepreneurs, you know, at some point we start asking them, this is a very important point because a lot of people are starting companies because it's sexy, opportunistic,
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but not really for the right reasons. So the main reason a a really good founder gets company gets created is is there a painoint to solve that the founder personally had or someone close to them.
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So if those founders are the best of best because you have a clear purpose and you say okay this painoint was suffered by let's say my father or mother or myself I need to solve this and I'm going to have a mission around
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it. I got a world-class team around it or even if not a founding team. So we spend a lot of times to understand the reason the founders started the company.
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These founders and founding teams we believe outperform the let's say opportunistic founders 9 is to1. The one always works opportunistic.
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You cannot be so bookish all like this will not work and all like this will work. But we rather focus on the founders who are having a clear pain point and they have to explain why.
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But this used to be an old playbook, right? Today's playbook is more like entrepreneurship today is a choice.
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It's not out of some compulsion or pain point. A lot of people because it's so sexy and it's so lucrative as in as a profession. A lot of people choose because they want to do it.
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Yeah. But they choose it for the wrong reasons. Raj huh. They choose it for glamour. They choose it for wealth opportunities.
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But glamour pick career the entrepreneur the possibility of success is almost negligible anyway any startup even with the best founders best of best the probability of success is almost zero. Like you know the pro if they're starting for just glamour.
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Yeah sure. No entrepreneur entrepreneurship and making it successful anyways the probability of success is remote the first signs of trouble the glamour true but is it wrong to want to build a company just for money?
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No, of course not. Why? It's not wrong. But you know when we when we evaluating an entrepreneur, we only have limited data points. So we are playing with those data points. Like I said, out of 10, there could be one or two people who
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saying I just want to make do it for money. They'll do fine. But we anyway the probability of us succeeding and picking the right founder is so hard.
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Different factors better. Now have we done that also and funded people? Yeah, we have. So you say but there's something exceptional about that founder that comes up in that meeting when you realize okay painoint but they really thought through the business now
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what are we looking for you know you said is the simple thing how much do you truly understand your customer entrepreneur are they truly understand the customer have they really spent time with the customers and seen the customer's
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painoint that they want to solve so maybe it wasn't a painoint for them fair enough but I'm going to truly understand the customer and those entrepreneurs are outstanding because then they can come with a clear plan as to what to do. So yes, you can make
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it for money and they say my goal is money. They've done fine you know we were evaluating entrepreneur amazing timing amazing in the category then why is this company not done well and we were scratching and then when
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some very basic thing came up and we realized it's called this happened quite a few years back founder market fit amazing founding realize this founder Raj is the wrong founder for this business and so then we oh my god so now we spend a
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lot of time why is this founding team the right founding team for this business and we have to qualify that this is the right reason for this reasons and if not And that has saved us a lot of money.
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Tell me how do how do you identify founder market fit is right or wrong because it's pretty simple because you know what the background of the founder is and why they're doing this business and why they will be able to play a part
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in this business. Like I remember let's say you want to do a um alcohol brand. We don't fund alcohol.
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On the other hand um you know building an alcohol brand is hard work. You have to go into the trenches. You have to go and go distribution, do a lot of other things. There's not sitting in your office in point and doing spreadsheets,
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right? So, but the reality is on paper the entrepreneur looks amazing sub tick mark. But the minute that hard work starts where he or she has to go to the market and obviously that's just the start and many other things you have to
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manage customs officers, you have to manage all kinds of things. boss on the other hand some boss no matter what job or my DNA is like that I'll do it I'm simplifying it there's far more detailed work we do to pick what is
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found market fit or not but do you think sometimes an outsider can build a big company in a in a in a category where they have no clue about in fact that's a very good question 100% because there's this saying you're naive
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that young because they don't realize how tough it is. So when they jump hard, super hard, but I'll figure it out.
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He's done an incredible job, right? I mean, who would have said that you can build a a gigafactory and make a large public company making electric scooters, right? If he had known how hard it is, maybe he wouldn't have started, but he
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said, "Let me figure it out." And no matter what people say about him today, I have the highest regard. He'll do phenomenally well because he's jumped in.
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And what excited you about Bhavish? Just tiger. He was like, I will get it done. Hello high water entrepreneur.
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See last week I met 8 10 entrepreneurs. If you force me to tell you who they all were, I'll struggle to remember 50% of them. M but how do I remember's pitch in 2011 I think 2011 in four seasons
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something exceptional entry it's not like some hero entry and it's not a movie but there's something about it on the best founders that whether they're calm and collected but it will explain very well or they have that aura but just that energy you know
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amazing and what's going wrong with him today nothing going wrong with him the internet hates Well, you know, I I look at it a differently. I say, "Look, boss, self-made man, right? And two of them are worth billions of dollars." Mhm.
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Of course, ups and downs, but like I said, entrepreneurs who never give up, who are hell high water founders, and Bes is very much a hello high water founder. He'll figure it out. He'll have the last laugh. I'm not an investor in
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him, but I'm a well-wisher. But why do you think that he will win regardless of everything which is going wrong for him?
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There has to be something that you must see him. You must see him. He's very incredibly determined and he has a crazy desire to win.
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So he knows what's going wrong and what he's doing wrong and what he's doing right. Uh I hope and I'm I'm confident if I'm a betting man, which I'm not a betting man, that he'll figure it out.
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And for me, he's already done in remarkably well. So chapter discussion no one can tell me that Babaga has not done well well is understatement boss has done incredibly well where he's reached remarkable do you think competitiveness is the most important trait in an
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entrepreneur it's not the most um but it's it's very important you need to go you need to win you know this is not a business where you know entrepreneurship is not just to be second place you have to be wanting to win. That's
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our job. We love it. We want to be winning. We want to be number one. We want to be bor.
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You meet Praan Utam. They're so quiet, so calm. Calm, but they're quietly determined. Remember I said pitch pay. You don't have to come in and have aura. Calm, collected clear.
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You know the key is what insight you have. You know, you're talking about other things. What is that insight the entrepreneur has? So Utam and Pra and of course other founders as well just so mature determined from inside resonating
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you know success no one will recognize them we'll walk past on the street no one will recognize them amazing founders I'm just blessed to be partnering with them so many years true they have did incredibly well incredibly well
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incred and in a space which is so goddamn hard to crack I used to I remember I used to deal with lot of uh tempo four trucks for local, you know, from one one small village to another village, from one city to the
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city center and all of that. It was a mess. It's a mess. There are five people from exactly same place, five exact same trucks and they'll have five different rates and five different and you have and space. They have
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standardized things like it's incredibly hard incredible actually know Raj you picked up a good point the what we love is entrepreneurs who go after hard problems because though the probability of success is very low as you can imagine
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if I told you it doesn't come on short right but if you can crack it then you have left all your competitors behind you get it so as a VC when Someone comes to me with a hard problem and if I find
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the team to be exceptional, I am super excited. Make sense? Fair. But chances for probability but no problem will be returned at least four times the entire fund just by just because of the entire fund.
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We're getting so much money from good investors thanks to Porter's hard work forex. And do you think hard problems daily because I'm already tired with this sometimes there's a combination of naivity and determination that combination is very deadly and very
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powerful. We love it. not but I'm saying in general then when they get in oh but they had that determination right they had clarity they had the hello high water we'll figure it out life is figuring it out boss
Speaker A
now do you think utam or other founders from porter all the other founders right if if they would have been from the industry do you think they would have been able to crack Yeah, I think I Yes, of course. I'll
Speaker A
tell you why. It it depends. In fact, a lot of times you get founders who have domain expertise and we sometimes quite like that too because you coming with a domain expertise saying in my current job my company is not allowing me to do this
Speaker A
but I know I have a better plan I'll do it. So those work very well too.
Speaker A
Okay. Those are paindriven founders. That's right. in different boundaries and they also have deep domain expertise already been in this industry and for some reason their companies are not doing it or they're doing it okay and they think
Speaker A
they can do it better and they do it themselves founder market be strong because they are the domain experts exactly exactly right the fully strong is understatement you can't have a closer it's a marriage because they've been working in the industry for long they
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identified a problem they're like the large company's not taking care of it let us that's right to found market fit easy versus picking on Prana and Utam to do it and other founders of Porter is much harder task for us
Speaker A
as VCs. Would you fund a founder market fit strong founder or someone who's just driven out of random problems and be like hey maybe I don't have an expertise in this but I like the problem I'll solve it.
Speaker A
Yeah, like I said we which founder you'll fund more. I'd found the first one more of course because that's the way we do it. But some this founder has some edge some let's say we call it spiky internally
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spike something where they've really made an effort they didn't have the pain point but they made an extra effort to go deep into the problem and they were answering my questions of that unique insight raja whether it be this founder
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or the other founder the idea should be that I should have no clue about it the founder should be educating me or any other VC and saying you know what this is the reason I'm starting in this company and I'm like I didn't get it
Speaker A
like what do you mean simple then they have to go deeper into and explain it to us and say okay now it's making sense now I'll do more diligence about then you take it to your colleagues and partners and then
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the whole story starts but the insight has to be very unique true that and clarity of thought on that insight this is the insight I have and this is what I'm going to do about it and this is my team and then multiple
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blocks you know a block gay block a True. Is it a is it a big point? Because I think you're the second one who's saying this. So I met someone a while last year in UAE and just out of on a
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random dinner with bunch of other people and I ended up talking to him and he turned out to be uh someone who built a $200 billion fund globally, right? And he said and I asked him like what's one
Speaker A
thing that you you look for when a founder comes to you because you invest in very early preede kind of things and then you're investing in public listed companies as well right because it's a big fund so he said every time when I meet a
Speaker A
founder forget the public listed like only private market if in the first 10 15 minutes founder is not able to tell me something new about the industry he's building which I have no clue about and my these bunch of
Speaker A
expert analysts have no clue about and if he's not able to tell me something new then I don't like it.
Speaker A
Yeah. So right something similar you know you like this you love it and you know the insight reason this is the insight so every time if I come up and tell you something new as a founder you you value that don't you see
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that as wrong oh this is what he's talking is absolute nonsense this this can't be done because I have done my research and I'll be so if if you're a good VC then if you need to give the entrepreneur some time
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to articulate that to you now the entrepreneur has to be good that window is lost, right? So, first you have to write a pitch that makes sense for us to meet. So, I always tell people come referred from a crazy schedule also on the other
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hand it's all over the place what do you think we'll do and then unfortunately it is not clear enough and we couldn't meet him or her and when you meet him then you look for a new insight among other things
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pitch text now the ones that are all over the place chaos simple what is the problem one line what is the solution one line sometimes problems solution problem.
Speaker A
You're just starting today and so many pitch come thick with these things, right? Then you can have 500 page pitch tech to Mr. You know, Blackstone or whoever you want to give it to numbers. Show us what's happening. If
Speaker A
you have a few months of traction, show us traction. Show us that you're having retention. Show us basic stuff. Make it simple and I'm excited to meet you.
Speaker A
Mhm. Okay. Give me give me a step-by-step formula to make the best pitch deck and the easiest pitch deck will give you high conversion.
Speaker A
I can give you five or six slides. Yeah. What should what should I have in a pitch deck? How to make a perfect pitch deck. How many slides?
Speaker A
Say maximum 10 slides. Maximum 10 slides. Yeah. Okay. 10 may let's say you can decide first slide. What should be the first slide? You can let's go all 10 ones.
Speaker A
This is a bit of a debate on the first slide. I like the team in the front. I like to see who I'm, you know, meeting and talking to.
Speaker A
Okay. Problem simple. Second page is problem. Solution. Yeah. One slide on product if you can show how it works on a video.
Speaker A
Okay. Product how it works. Demo. Demo. Simple demo. Click about traction. If the company has a few months of traction competition slide.
Speaker A
Okay. Where do you stand? That's right. One slide on how much money you want to raise. We raising 1 million.
Speaker A
Okay. That's it. Okay. Do you think TAM and all of that is important? Tailwind, headwind, what are the why is it right time?
Speaker A
Like why this, why now? Why us? Yeah, sorry I forgot that. Um why now?
Speaker A
Slide. Why slide? Why now is very important. That's so after problem solution uh and then why now.
Speaker A
Okay. The fourth will be why now. That's right. Okay. And see TAM uh Raj traditionally what people are looking for is large TAMs.
Speaker A
But I disagree because we our point is we can even go to a small T but growing very fast a small new because if you're already going to cluttered markets interest but how do you know that new market will
Speaker A
become big? There a couple of reasons. One is we hopefully have our own diligence done where we have a thesis that we think this is the way the world is moving.
Speaker A
Obviously we're not gods so many times you get that wrong but you have some thinking this is where we feel the future of this business will go. So wealth management is going like this this is how it's been taken care of.
Speaker A
Sometimes the entrepreneur as I said has that insight where they have to convince us that what I'm like and oh he's right here boss let's do it you get it nice so time is like you want to tell
Speaker A
what is the small time that you're operating in and how fast is it growing or what are the signs that it will grow either way then only science can tell us our logic of the market at least like it's already exploding exciting
Speaker A
nobody else doing that right so suddenly the market is right there fair and then there's no excuse in a new TAM business then the company has to grow very rapidly to excite the next round of investors so team problem solution why now
Speaker A
TAM problem how it works then traction then competition simple competition you And don't show me that 1% of the market slides. Those are the worst.
Speaker A
What do you mean? I mean like most fun this is it's a 50 billion market so we'll do 1%.
Speaker A
That is the laziest slide ever delete the presentation. What's a good way to show time then? No it's if not 1% then what should a founder show like teach us what young founders are watching this they should know. Actually for me it's better when I
Speaker A
meet the founders because then they can explain with the fair fair but if if somebody's sliding in a deck and you have to decide whether you'll meet or not because in after looking at deck in 30 seconds you're
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deciding whether you should give your 30 minutes or not where on the deck when I'm meeting people is not on the time especially when I find the time to be small but it's more about the clarity of thought
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on the problem solution etc is much more important for me because I'm thinking okay this is very good but I'm not sure but this sounds interesting enough for me Why would that work? Okay. Oh, fine.
Speaker A
Let's let's meet Raj. Let's do that. Give me an example of what is a good problem like what is something that you've seen where founder has been able to explain you something very nicely like in just one or two lines the
Speaker A
problem and you're like I'm excited I want to meet this is clear. There's so many examples uh we can give.
Speaker A
Um and what happens is when you do meet the founder many times you realize not really most of the time not really fair but at the end of the day clarity of thought on the founder I won't give
Speaker A
examples of companies but if I had to see 100 pitches 90 will be cluttered entrepreneur the more excitement comes actually the data will come when We start doing the religions on the company not by reading that document by working with the
Speaker A
entrepreneur say how you thought through this let's do this let's do that that's a better way to do it versus creating a cluttered deck where the poor founder spend so much of his or her time and then getting
Speaker A
a rejection from us the simplicity and clarity of thought I'm repeating again and again I want clarity of thought simplicity that is what works is there an example in your head like someone who came to you for some fund
Speaker A
and you're like this is Great. Yeah, I think so many of the companies you done in the last year itself would fit into this whole scheme of things, right?
Speaker A
And Jesse, give me an example of one company you invested in. So let's take I'm thinking Kaka recently. So let's say we did supernova, you know. So it's a AI native language learning app.
Speaker A
Okay. young guys Marishi and his co-founders from uh uh ID of Chennai the the clarity of thought that they had on the pinpoint on language was phenomenal it was just simple that this is what we're going to do and young guys
Speaker A
now of course as any business they've also pivoted like but the nuance of the product remains the same but just the use case has changed okay but that's okay right but initially like this is a need this is what we're going
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to do this is why AI is going to make a big in the life of the companies and for us it was pretty simple we and and just the way they articulated it another thing we liked about them and a lot of founders
Speaker A
is when your previous companies have not worked what are the learnings you've had you know like okay this is what I learned this is what I didn't learn this is how I'm going to be different and so we feel that you know we feel
Speaker A
entrepreneurship is an overnight success and suddenly everything becomes unicorns and everyone's talking but the data tells us that on average five or six companies you have to fail before the sixth one becomes the really large one. So it's a lot of grind.
Speaker A
So do you invest in failed founders? We love to. Why? Because the failed founders coming with we want to see how much they've learned from the last couple of companies. So learn by asking a set of questions or at
Speaker A
least we don't feel the feel that then obviously we won't do it. But we see fail founders to be a big big market. What is a good answer when somebody has has failed as an entrepreneur and come back to you that
Speaker A
why they failed in a very precise way they can explain to us what went wrong and why this time will be different and what have they done differently this time to cover it could be anything could be that it was a
Speaker A
single founder and they didn't have the right co-founding team maybe they went they were founder marketa they went because they were let's say very articulate they raised capital but they were the wrong founders of that category but now we've realized that this is
Speaker A
important so all the bricks are coming together the pieces we say this time we're ready could be a timing issue so we feel this time the market is ready and they have to explain to us why they feel the timing is right this time but
Speaker A
don't you feel if somebody someone has failed before their competitiveness their hunger their speed to take more risk just reduces no I feel if if you're built to be in that first category I said hello high water and kimiko I want
Speaker A
to build something in my life I'll figure it then it's just a matter of time before you come back with something even better. And the grit and determination is what we're looking for the truth.
Speaker A
But don't they get slow and more fearful because they're like, "Oh, because we've failed at this point, then maybe I want to." Yeah, they do. But we're not going to find those people, right? Our job is to find the ones who are not slow and more
Speaker A
fearful, but in fact more excited. See, the best founders are like, "Okay, now I get it. Okay, this is the right way.
Speaker A
Let's start, buddy." So in fact it's like more you like it more and see when I used to work in my old days when I was at Nokia venture/blun if I was sitting in California office all those young founders used to come to us
Speaker A
they would put on the first page Raj why we failed and what we failed nice first page no nothing what I just said I started XY Z company these are the reasons and India because of stereotype and this
Speaker A
un unfortunate fear of failure social stigma the poor founder would try to hide the point and I'm very keen to understand I want to understand what they've done I have no problem my father failed in three four companies before took off now
Speaker A
he never gave up but does it scare you because the social stigma situation has improved Raj to 2020 AB if you look at at least founders or founders could and their family and their close ones look at someone who's
Speaker A
failed in a business in a very terrible light a lot of people I know who have been exceptionally good they're like hey you know what maybe I should go back to job because this is if I fail again then
Speaker A
it's it's shameful it's it's embarrassing you know glass half full half empty so I believe that what it used to be Mhm.
Speaker A
Is there a long way to go? Hell yeah. Hell yeah. Because in India the job is the most important. People have struggled.
Speaker A
So that's still going to be there. But has it improved a lot? I think so. I can see the confidence level of entrepreneurs who come to me who failed and are okay to talk about it.
Speaker A
Is it happening with everyone? No. Because social to calm down. What should we do so that more people are okay with failures? Just keep talking about it. See, successful people have to talk about it because people want to listen to successful people like
Speaker A
someone like you. Suppose you think about some failure you had in your life and you talked about it and how you overcame it and today where you are.
Speaker A
It's it motivates people. I I I have a secret like a diary. So where I write almost every week or the things are failed.
Speaker A
This is there you go cuz some like you you're so high profile and so successful where what do you learn from failures and you know where you come back it'll be great success.
Speaker A
Tell me where have you failed. I feel every day I'm failing every day because our business investments remember the businesses works like this 40% no matter what we do and we find everything we find hello high water timing
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decent exits okay on the returns on the fund So suppose I'm making 10 investments out of 30 and my other part is making 10 making 10 that's a failure because you feel effort the and you kind of connect to the
Speaker A
founder you you get to like the founding team and you it's almost like a marriage and then unfortunately for whatever reasons maybe failure but we always trying to figure out okay what did we do differently here next our business is unforgiving It's a it's
Speaker A
a it's a business continuously full of mistakes. True. Or it could be a failure to move fast enough.
Speaker A
So many other startups we missed whether it be grow misho all come to us.
Speaker A
We didn't move fast enough. That's failure. Correct. See you missed out on zeppto. Zeppto fast.
Speaker A
No we you know they came to us Kiranakarta. Mhm. And remember I just said earlier in the show in the interview that best founders you can't forget the pitch. I still remember Adit was talking to me and my
Speaker A
partner Gorov and he was just 19 years old. It was phenomenal but we didn't like the Kiranakart idea after the call and we said he had approached Gorov I remember and he said he said we really like the founder but
Speaker A
Kiranakart we don't think it makes sense and but I just said so that's failure when I'm lecturing you know on this podcast and what's happening with them now they again what happened in the public market recently that is you know public markets are a
Speaker A
different beast and private markets are a different animal but Adit I haven't been in touch with Adit but he is A+ I like him yeah he is A+ he will figure it out and Raj you will see one day Zep will be a bare
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minimum 10 billion listed company and it'll be far more than that eventually it'll be 20 30 billion now people are laughing because times are tough for him because public markets are not accepting his price and therefore he has to do
Speaker A
what he has to do he will figure it out he'll probably raise a private round that's my guess and move towards a little bit more profitability so that the Indian market can you know reward them digest it but he's not going anywhere
Speaker A
soon he's he's going to be there for the long haul he's the best of best this will be a once in a generation company so you miss Zeppto you miss Ola that grow and Misho list see if you're not missing iconic
Speaker A
companies or amazing companies we're in the wrong business. We're not in the mix. Okay. Like you're not even considering even considered. So Shark Tank, I won't mention the names of sharks, but 80% of sharks pitched to me also. And we didn't
Speaker A
do any of them. They all done very well. So in your fund one when I was reading you had 32 companies. 30 of them didn't do really good. Two of them just gave you exceptionally great results.
Speaker A
So actually um a few more did. we uh they've already been exited. For example, Dr. Deepu 7 daily uh rounds was a great exit for us. We sold that. Um find harsh, we sold that for a very large amount of money. That was a big
Speaker A
exit for us. And we have three companies that are now we actually have four companies. One is in the US. So we don't talk about it's a SAS company. It's doing really well called Certa.
Speaker A
Okay. And company B. One is Healthcart. It's doing phenomenally well. And um I'm sure sooner rather than later we will want to go and do an IPO that by the time when when it does an IPO this company will be
Speaker A
worth billions. Okay. We have a company called Tataw 1MG which is one of from Healthcart. That company also is doing phenomenally well and we're very excited about it. Healthcart will eventually return our fund at least twice and the third company is Porter which
Speaker A
has done exceptionally well and by the time we exit this business whenever that may be and there's no rush for the IPO as you can read an interview that Rutam gave last week uh but the company is doing phenomenally well touchwood and uh
Speaker A
that should return our fund multiple times over so we call it the home run so our business if you get even one great company you're done we've been lucky to get three of which all three will be unicorns eventually actually
Speaker A
H so that fund is great success for we've been very lucky and why didn't the other work the other companies like I said a variety of reasons we we picked maybe sometimes founders that maybe should not have invested in
Speaker A
founder market fit too early founder was maybe not as um determined see we also got better as VCs okay as last before that 10 years privately right how to pick so last year investment and you ever invite me back 2 years from now, I
Speaker A
may come I will come with different insights on what other mistakes we made between today and the next two years.
Speaker A
Tell me one thing that you used to believe before and now you don't. You know I I believe that um you know you need u a situation where uh you have to have founding teams. It doesn't matter if there's single founder
Speaker A
if he or she has a clear plan and can figure it out. You look at PTM right Vijay Shaka Sharma has done incredibly well.
Speaker A
So for some reason I had this thing that single founder we should not do it here and there but we broke that paradigm. So we've changed that. We did Foxtail in fund three. It's done phenomenally well and she's single founder tigris and
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we're super happy to partner with her. We have other single founders now too. But I'm talking I'm talking talking about a belief I had in the past. So we got over it thankfully and which you know I always say never stereotype and
Speaker A
we were stereotyping without realizing it sometimes but rewind. We done it and we're very very happy.
Speaker A
Is there a company you've missed because of single founder you pass one founder? Yeah.
Speaker A
In fact now I'm good friends but 19year-old hotels you know too hard I just said hard problems but one founder then probably one founder but one it was too hard a problem and he was just too young inexperienced
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the nity which I said madness and then I told when I last met him I just finished my executive MBA at Harvard Business School one of the cases of So I in my subgroup I led that case. So
Speaker A
I was very proud to lead it and I was telling my friends boss this company's been such an iconic business and whatever the price may not even he was incubated by a small incubator. My friend Shan okay fame adlaps he had started
Speaker A
incubator. Okay. And that main company from the incubator, I forgot the name of the incubator just some 5 minutes from here.
Speaker A
Okay. Was Oo and then you you didn't even meet because like you're my younger colleague or older doesn't matter.
Speaker A
It'll take days and months. let's say every six months and then we just say which are the companies we missed and then we go back into the future and say okay from last five years miss because it was always good to introspect miss
Speaker A
how can you next time an oo comes or ola comes not miss it see after all we still did porter right or we still did health card wouldn't be in business today we did a network porter story ki I heard it was because
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of some strategic clause that's why you ended up funding porter what was that it was a it was one It was you know fund we can only we had modeled 25 companies okay and I remember fundra and I went and met
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one investor once and he just talking to me randomly about stuff people were close people have the money so you cannot change terms when you buy the money and he said sasha um so how you thinking about your recycle clause I
Speaker A
said what do you mean recycle dude this is what recycle means is say you make a exit in the first five years.
Speaker A
Uh mostly these exits are small exits because so you keep the principle and give the profit back.
Speaker A
Therefore using that capital you can then make put that money back into the system. How much capital allocation is there so that you can make a few more investments as Americans say more shorts in gold. Mhm.
Speaker A
So I went back to my investor and said guys I'm so sorry I never changed the gold post after this but reason to the credit of those investors LPs we caught them they said yes we agree because the
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data that investor who showed me he say the data is overwhelming funds without recycle they underperform and if I know that already I'm going to underperform or at least have a you know have my hand tied behind my back.
Speaker A
So the credit of them they are great and we kept going and as you rightly said uh good research you've done company number 29 became Porter in fact because we were already putting X amount of capital per company now in K2 K3 K4
Speaker A
we far more scientific about the capital but equable so by the time Porter came along money was dwindling but my my partner Naven was the one who had met them and then he came and talked to me about it. We said let's meet and the
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very first meeting we loved it and the rest is history we did it in fact the company took off then continue to do really well and I remember there was a board meeting in 2015 market is very hot
Speaker A
the Porter was going to raise another round of capital and uh trip never happened because normally when a market crashes there's some event black Sunday or something happens lean particular event but overall the market just went south.
Speaker A
Okay, this is if you remember 2015 and everyone ran back. So there was a lot of excitement but when the market slowed down in the end of 2015 suddenly travel I remember they said okay no need to come because I'm not sure. So
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suddenly now you have a cost base and we were doing intercity and intracity. So we said you know we feel that it makes sense to you know take some tough decisions. Now this is very important.
Speaker A
Most founders push back and uh and rightfully so is their company. Our job is to say this is what we recommend but the cash is limited.
Speaker A
So so did prana utam. They all said nay but we think we should do this and do that because both business doing really well.
Speaker A
Yeah. Now this is a very powerful story because it teaches you focus and you're like but if you're forced to pick what you going to do right and this is a greatness of these entrepreneurs that they did it on Monday they called us and
Speaker A
you know what we've taken the hard decision to knock off one we remain in the porter business but we lock off the other business and today they could have created a let's say a black buck out of that but they were doing so well
Speaker A
but then whatever limited capital we have we will focus on this cut all costs, cut whatever they needed to cut. So within a week they were back in the game because a lot of companies that period died raj
Speaker A
and what happened is the reason was entrepreneurs was so pursuing but that's life this is business nothing personal they did it and the rest is history then the company continued to raise capital I still remember story of I'm
Speaker A
annual day used to happen in small a small hall in opera house when we were so much smaller firm So come to pitch again but he made the pitch and presentation suddenly I see prana is still standing outside
Speaker A
no I've been talking to all the founder all the rich people have come for your annual general meeting I can maybe consider 10 lakhs for you someone saying five lakhs no ego no nothing he said I need to be in bomb and
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go and get this capital and nice. So just amazing humility. I cannot water and then and then finally again capital tufta then they convince Mahindra to come in unconventional investor to come in right normally we normally go to traditional
Speaker A
VCs or private equity funds but they convince Mahindra Mahindra's love them Mahindra A and then that after that no turning back after the Mahindra round True, true. And there was another story of Myntra as well, right? You were one
Speaker A
of the first investors in Myntra. Yeah, I was the first investor. Uh I remember um so MKkesh Bansel amazing entrepreneur you know. So I'mra I remember the board meeting used to happen in his house and I still remember once
Speaker A
come and speak to us. I said okay. So I mean office don't worry I will wait downstairs for you then you come finally I see standing there and I said MKkesh this is Asha I look up there's a whole building and
Speaker A
Myntra is being created but the real story there was um not what I did but what was done by Leaf Pixel where he said look uh you know MKkesh you're an amazing entrepreneur we really love you but the space you're in
Speaker A
looks tough he is doing uh like a cafe press for India a cafe press for India like selling cups and mugs and that kind of market so you need we need to think big so a ticket was bought you'll have to check
Speaker A
with MKkesh if this story is fully accurate but I'm 99% sure my memory is correcting on Wednesday and next week one trip to Brazil and you could see how businesses there been created in the category that we had
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in and presented and that that's what became Mntra right online apparel the rest is history nice and you invested in that yeah but again the best founder story actually very interesting yeah that's a singles founder story I said single founder as I said a few
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minutes back she said okay I said but I really like you your ref checks have been amazing. So if you ever build a team around you, please call me. So one day I'm ready. And he came and I was blown
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away by the team and the rest is history. Now very simple thing. So a lot of times single founders come or founders come get better people.
Speaker A
We are a startup after all. But what are we looking for? We're looking for that individual or individuals who have the the gravitas clarity of thought and the excitement that they can create for other people to leave amazing opportunities and come and
Speaker A
say hello high water I'm I need to be with this person that's salesmanship right right it's the number one trait if you can't get great people uh why would I fund you to test and he got three amazing
Speaker A
co-founders who all done very well postitra so that was it worked out really Well single founder story single found was the dominant founder obviously and then two other younger founders joined him and people don't realize that the flip card big 17 billion the
Speaker A
enterprise value was broken up in in two two parts 11 billion was flipkart but 6 billion was myntra 6 billion it's incredible story it's not 6 billion you can go online and check 17 billion enterprise value 6 billion was paid by
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Walmart for just justra but it's nowhere there like people don't talk about it much was mhel competitive super competitive see his fitness level physically compared to where he is today yeah today though he's full into health yeah he's very competitive and he's done
Speaker A
so well and all of them are successful but one after the other he's still going at it he's very competitive he's very clear thinking He's the best of best entrepreneur is who is the most competitive founder you've met?
Speaker A
Uh I have been lucky to meet only once. You won't remember this because it was years and years back mitt but Sunil Mitt is you can't find a more competitive entrepreneur right the way he came back it's most inspirational story
Speaker A
and look at his age and still to have done this it's quite remarkable to have come back and where he has come to have that energy. Hello high water forget dying but he's thriving today that's inner competition he doesn't talk
Speaker A
too much he of course speaks very articulate person but amazing maji I mean come on we all have to respect him what he has done like you know of course the big man Mr. Dubai money is a legend.
Speaker A
We all respect what Dubai did from nothing. But then to take that group, people forget that when MKkesh took over, it was only a couple of thousand crores 2,000 numbers in the zeros. It's become so big and and for Reliance, the game has not
Speaker A
even started for Mukesh. If you were ever lucky enough to meet him and ask him, he is already thinking of multiple other things that are game on. I mean lucky to meet Mr. Adani last year in Aabad. Remarkable
Speaker A
entrepreneurship. He's also competitive ultra look perach look where they reached. No. Are they do they love money?
Speaker A
Money has zero interest then by um not not them. I'm talking about founders because see Raj I'll tell you the founders who do the best are the ones who do it for the right reasons.
Speaker A
But what would be the right reason? they the right the right reason comes so much later in life starting clear purpose it it will work and then these kind of people make so much money they don't know what to do with the money I get
Speaker A
calls from such founders you see let's say I'll just pick companies that are not VC funded but private equity fund I'm just coming like a risan kita and jagish murjani citys tech simplest people boss they sold their company for two billion
Speaker A
I can see jagish randomly walking past me on the live in small apartments. They they hate me for saying this, but they give crazy amount of money in charity, right? Amazing 10 on 10 entrepreneurs.
Speaker A
They can be going in private jets. They have done remarkably well. And the purpose was man, I got this hard problem. I'm going to solve it. I'm going to go do it. And they did it. And for them, that's their life's purpose.
Speaker A
We love such founders. I I agree. Like people who are on some purpose mission oriented I want to do this.
Speaker A
Yes. I want to reach here is so compelling that people forget about everything else.
Speaker A
This painoint is so compelling to me. I need to solve it and I am the right person. I will do it. Everything else is irrelevant. Money is just a byproduct.
Speaker A
Don't disturb me. give it hopefully someone who's come with like a phenomenal startup pitch and then why do you want to do this and you're like as you rightly said founders come and uh they say whatever they want to we see
Speaker A
I think seven and a thousand deals a year per year. Let me repeat 7 and a half thousand deals through emails or connections, people calling 7 and a half thousand.
Speaker A
Yeah. So if you knock that down and say okay 2 3,000 to whatever reason but then so in such a large amount of companies obviously because there only so many hours in the day.
Speaker A
How many do you meet in a year? See I end up meeting the least because my younger colleagues and partners in the meeting and then it comes to me later not you personally how many do you meet in a
Speaker A
year it still be quite a bit because every week quite a few yeah if I do the math I haven't never done the math but quite because actually real energy is entrepreneur but would you be meeting 100 in a year
Speaker A
60 70 ear almost one a week boss it should be way above 100 earlier like in my early parts of my career I'm not early doesn't mean 20 years back even till recently way more Saturday, Sunday, Monday, Tuesday, way more
Speaker A
recently come because I my partners are so good that they're picking such great entrepreneurs that my job is just to support them.
Speaker A
So I'm lucky but I'm unlucky not to meet more. You get it? I'm lucky to have an amazing partnership and great colleagues.
Speaker A
Yeah, but I wish I had more time to meet the entrepreneurs. That's my favorite part which I miss the most in my job.
Speaker A
True career because meet the future. So I mean it I didn't do it to s do a work in a finance meeting but life but it's a business also.
Speaker A
Fair. So you mean almost one a week but yeah mathematically mathematically like 50 60 mano 52 weeks almost right. So then okay let me like let's say your founders came in they show grit they showed everything they're amazing. How do you
Speaker A
decide that it's a good value or like whatever they're asking is good valuation because in the beginning they're just founders and there's nothing.
Speaker A
Yeah, very good question. It's more art than science. What do you mean? See, science you can do a you know discounted cash flow. There's some balance sheet. There's logic.
Speaker A
Logic. There's numbers to be discussed. Yeah. Like x is equals to y. You can do something because it's like art. How do you figure art out? So it's more about how the ent couple of things how the entrepreneur
Speaker A
can convince us that this is the value he or she has in mind and how smart he is in negotiating. It's also sometimes some comparisons you have by and large met in the market saying that these companies by and large in
Speaker A
this category valued around that stage. So they're more softer things like that pure negotiation and frankly comes down to how much we really want to do the deal right if we really want to do it have we overpaid many times the answer
Speaker A
is yes because eventually see our goal is simple we looking at this business becoming a billion 2 billion 10 billion the only thing that reason we don't sometimes do the deal is because we do some math internally ownership
Speaker A
then what happens is sometimes when the partner comes back and say host But equity then you have to have a second discussion saying yeah then should we still do for 6% of the equity versus let's say 10 or let's say 12 instead of 15 and if the
Speaker A
founder really is uh is exceptional then the partner say I think it's okay let's make an exception let's do it so we can't make the exception all the time because ownership fun is very important we don't do it so as the company keeps
Speaker A
progressing So suddenly I cannot be in a amazing company and have only a company. Now yeah if it becomes 20 billion then it doesn't matter but let's say the half a billion outcome which would be pretty good for a small
Speaker A
fund like us but if you have only let's say 1% what's the point but 10% not bad 20 million but do you look for this that when you invest in company do you keep this check in your mind that this
Speaker A
company needs to become a billion dollar? Yeah. Yeah. Any company we do every single in so we do 30 companies on average per fund.
Speaker A
Every time we do the investment it has to be the next fractal the next portal the next network.
Speaker A
Okay. Next. So you have this like billion dollar2 billion$5 billion. Every company we say this founder founding team can they build a multi-billion dollar business? If we don't do that for every single company we're screwed because the odds are so
Speaker A
low to find one. Right? We can't say 5x 3x and these 10 will make it. No, no, no. Every entrepreneur who comes has to wow us and excite us.
Speaker A
You won't fund like a very small D2C company which you know the max it will reach is like 50 crores.
Speaker A
That's right. See that will be great for if you're an angel investor because I'm happy it's better than let's say I make 3x it's better than the stock market. So what's wrong? And there's my money. I'm only looking at the X. But we
Speaker A
have to look at it in the as a fund and do the math and say okay how will the fund return XY Z. See winners have to return the entire fund bare minimum 50% of the fund. So from
Speaker A
your fund 100 million million bare minimum ideally the entire 100 should come from the company. If you see our first fund Porter and healthcart like I said have returned the fund not once but multiple turns.
Speaker A
Yeah. Fund two we entered the company at 4 million valuation and IP I can't talk much about it but you know the valuation is in billions of dollars so you can do the math how many times the fund will be returned just by
Speaker A
network itself games neighbor amazing story we have square yards which is another unicorn we have a company called noa online sanity pads phenomenal business company has snapmint buy now pay doing phenomenally well.
Speaker A
So does that mean that your filter to invest in founders is always from an optimistic lens not from saving your backside.
Speaker A
Yes, well said 100%. See our business is the max. You can't have a industry which is more optimistic. We have to be. So you don't think that you always think you know in your mind you have written off because worst case then we won't do
Speaker A
a single deal only because we have to do that and see what can go wrong right and then we feel that okay this is not going to work out the way the entrepreneur envisioned it then obviously we won't do it fair but if we
Speaker A
our goal is what can if this works how big can this become that's very important If this works, how big can this really become? And you're like, okay, forget about all the things that go wrong. But if all the things go right
Speaker A
that this worked out, I'm like, oh my god, this is ginormous. This is network.
Speaker A
Initially, it was like a head scratcher, right? Kr, I want to put all this together and factories put together. But because I came from a manufacturing background, it made a little bit easier, but still it was hard. And then me and
Speaker A
my colleague were talking about it and we said oh my god this insight that Amit and Shinat had was quite compelling even for me coming from in fact in first ICB rejected it then my partner came back and said let's relook at it like why are
Speaker A
you saying no we relooked it and said okay you know what got it this is now he got it and it is a completely new category think about it what I said earlier it is a small tab yeah
Speaker A
head scratchers you know we like head scratching What's wrong with you factory and your seed fund?
Speaker A
So that is where the real money is made is when you go to the head scratchers head scratcher like why are you doing this opportunity?
Speaker A
True. H interesting. We call them the edge cases, you know, like what do you call them?
Speaker A
The edge cases like what are the the head scratchers, you know? Yeah. You know, people have always seasons and our job is only to find are these Hello High Water founders are they complimenting each other? They've known each other from before. Are they going
Speaker A
after a massive new TAM which is all tick tick tick tick here's the money finally to what it eventually is but now it's an unbelievable company but do you think this this is a good insight for a lot of founders when they come to pitch
Speaker A
VCs that they should by the end of their pitch they should give subtly the answer to how big it can become if it works. Yes, of course.
Speaker A
Because then it helps you also envision and dream along with us and then you start thinking different see exactly right well said if you can't take me on your dream in that one hour I have to suddenly get enthralled wow
Speaker A
amazing like without realizing it like oh my god this is looking so interesting and initially like I said insight should be so like to you that it's like okay okay tell me again Maybe medium be required like we need for Z work. But
Speaker A
then we get it and then the entrepreneurs you know what now please look at this new TAM that is there. All these factories are completely messed up. They have no one to help them. This is what we can do. This is the software.
Speaker A
This is what we can add. Okay let's do it. But then how do you know a founder is a great charmer storyteller versus a founder who's only a storyteller and bullshitter because there I know so many people who
Speaker A
come to a meeting and they will charm you. They just know how to they'll make you dream big and you're like damn man like this is so good. I'm stupid to not fund this.
Speaker A
So sometimes and then he's only a storyteller or she's only a story. If you don't do proper diligence or lazy diligence then you can get sucked in in the Yeah.
Speaker A
And some you you you drink your own medicine now mistake sometimes is the founder is so good and so compelling. Uh which is a good example of that. Should I give you?
Speaker A
Yeah. Let's say we work good example one after the other after the other all the way till our friend even today the way he speaks it feels like but he was a great storyteller like just phenomenal compelling couldn't execute at that level
Speaker A
that's right so maybe in the new company is like I said always give a person a second chance or third chance so let's be fair to Adam maybe he's doing well I haven't seen the numbers and you were talking about diligence
Speaker A
right you said Kim diligence where to identify who's a bullshitter versus who's a great executor, right?
Speaker A
How do you do diligence? Yeah, because you know now what is a step work like what is a framework to do a diligence?
Speaker A
We will talk to at least 10 20 people per founder to go deep into each individual and who would you talk to? So we talk to previous jobs Kamia we talk to if it's only from let's say a university we talk
Speaker A
to the professor if required anyone close to that individual who's had some sort of capacity to work with him or her so we need to do that and we've over the years gotten better and better at asking the right questions for example this
Speaker A
question I asked earlier right can you tell me examples of when times cames to fail then we would say okay would you fund this person and how much would you rate this person out of 10 and why would
Speaker A
you give this score etc etc and then why are you not putting money into this guy? Give me examples of work when they worked with you where you felt apart from the not giving up point but where were they collaborative are
Speaker A
they very political not political uh can they attract people would you like to let me ask would you ever work under him or her and you know like no no I can't work with him or her because this is how
Speaker A
it is okay interesting would you be willing to leave your job now it doesn't mean they leave up required I said you know what if I had a choice I would love to work with him or her and that's just
Speaker A
some basic ones I'm saying right now there Many many many more questions we have.
Speaker A
But what are you trying to find out in ref checks and these questions? We're trying to find out the personality of the person. Is he really that hello high water entrepreneur? If you dumb it down, do you look for integrity as well?
Speaker A
Without integrity there, no matter how good he or she may be, if there's even a doubt or integrity, we will drop the deal right there. How do you how do you find out in about the integrity of diligence and directly?
Speaker A
What question do you ask to find out in whether the founders ask directly on the face of the the ref checks? Are there any integrity issues? Please tell us and you know they know that God forbid they know they aware of it and they don't
Speaker A
tell us. That's a big problem because you know we'll be we won't take that person seriously again and so they people don't want to spoil credibility but they can give they may not say directly what signal they think.
Speaker A
And so integrity issues you'll ask you'll ask would you work with him or no what else? No, we'd work with him. Give me examples of what where they have succeeded, where they didn't give up. Uh how are they team players or not? Can
Speaker A
they attract great people or not? Why are these guys the right founders for this market? I said founder market fit.
Speaker A
You tell us nar you had worked with them. We are thinking that they're making sense that there's a founder market fit for this individual or individuals for this business. What do you think? I said not really boss. He
Speaker A
just talking a big game with a this kind of business. He's not suited. And there's example in our company where he was supposed to do this kind of work in his own startup you know. So you say okay he's saying something it's on paper
Speaker A
it sounds good or but maybe he or she may not do it when the pedal hits the metal so better back off right now.
Speaker A
Interesting. And is there some answer or something that turns you off completely? is like no this is an off button reference you know uh if if he or she is very political if they've had like I said you
Speaker A
just brought it up so you know even the smallest iota of ethics uh whether it be maybe giving up too quickly jumping from project to project jumping from job to job these are some of the things that we
Speaker A
realized we were talking about diligence and tell me when will you overpay for a startup and well you underpay for a startup.
Speaker A
The market has changed. Raj today the joke in the US is uh billion dollar startup means entry check enterprise value billion sounds laughable but that's the madness after AI market but that's what the trend is right now you know the entrepreneurs are
Speaker A
so good they're leaving an open AI or they're leaving anthropic and they're getting one2 billion enterprise value to start the seed round is billion because both there'll be a two trillion company in less than four five years like anthropic
Speaker A
Open 890 billion 900 billion and people 900 come on 900 billion Microsoft Meta Google have taken 25 30 years Amazon you know it's unthinkable so do you think now in states or Silicon Valley if you're not building a trillion
Speaker A
dollar then VCs are not excited like the large ones you know the good thing about America is there thousands of VC funds and private equity funds VC to sub there's different strokes for different folks there some people boss I
Speaker A
only want to go after those 50 billion but on the other hand enough and more saying okay the billion to 5 billion 10 billion is still meaningful as long as the fund size is small there's a big difference as the funds get bigger then
Speaker A
you have to go after bigger outcomes that's the reason that we've kept our fund size small it's a key part of our our insight that most VC funds don't perform o over a certain size so we came to the conclusion that in India venture
Speaker A
capital fund early stage maximum 100 million is enough after that certain number the performance starts coming down so if you see our history none of our funds like last one was 760 crores a new funds launch maximum 850 we've
Speaker A
always kept it sub 100 million and that's why performance has been top of the market why simple math here that small VC funds outperform large VC funds simply because and if you're a let's say $400 million venture capital fund 1.2 I'm just giving
Speaker A
very macro numbers 1.2 2 billion rightf let's say you find two three amazing companies that itself is very very good achievement then those companies will dilute as you start funding right so let's say you you have 6% in one company
Speaker A
it's reached $2 billion you have 7% in another company that is 3 billion so two so million aa but your fund is 400 million your two best assets only barely made 1x one and a halfx or whatever the
Speaker A
math works to right eventually Now where are the other 1 let's say you want to make let's say 400 million 1.6 billion correction I showed you but where's the 1.1 billion going to come from your average so those
Speaker A
are your best assets then average 100 million 200 million that's 700 remember what is other 40% zero 2x but then don't you feel because fund size you don't take very risky bets like the risk capital in US is very large in
Speaker A
the risk capital in India is very small and you don't end up funding very deep tech random companies where you know that the outcome is the probability is probably 0 to,000 or thousand business is super risk coming only concept stage
Speaker A
yeah maximum entrepreneur so you don't give like very risky you don't take very risky bets India is a very different market than US right so it's changing now you see how space companies have taken off etc. But we we do like what is network at the end
Speaker A
of the day it's a extremely risky bet right so all the bets we take when you're coming in at that stage by nature of the stage the risk is extremely high it's super risky business the mortality is the highest so we already taking that
Speaker A
risk we have no problem with that I say what kind of companies deep you can if I think I'll think of some names Because market was not ready. Deep tech takes longer to spectify. Not enough venture capital who can delay the
Speaker A
gestation of getting to revenue because fund size. Not enough capital. Not enough understanding. A lot of entrepreneurs in those days were not classic CEOs. They were more nerdy it tech guys. But tech guy cannot run may not in most cases be able to build a
Speaker A
large operating business. So complimentary skill sets. So so many different agendas. But now government as you know has become very serious about deep tech. So I feel that there's going to be some very interesting companies coming out space.
Speaker A
But what do you fund? Of course we've we have looked at many companies and we will fund. It's a matter of time like defense drones all right now we do a lot of ancillary businesses that sell to defense
Speaker A
companies or sell to drones or sell to whatever and those are doing really well for us. But if the right founder comes why not but then because your fund size would be smaller you won't have you won't take
Speaker A
very risky bet don't you think sir so of course we'll take because small check that 2 million 3 million check that we put is enough to get a company off the ground then like workers is hundreds of millions after that right in US large
Speaker A
complicated problem and then someone raises like hundreds of millions of dollars for day one so then that's out of the game for pretty much all the VCs in India India cuz not just K capital but nobody can do it. So why why that
Speaker A
kind of thing is not there access to capital we have to raise larger funds but do you think founders are thinking like that are there enough founders who want to actually build such uh very complex companies and very comp want to
Speaker A
solve very complex problems Raj and there are if I think I'll give you examples in India itself and on the other hand many entrepreneurs then move to the US and they build global businesses they Indian diaspora entrepreneurs are sitting in the valley
Speaker A
today right have built amazing companies because they realize complexity is going they realize that the access to capital for the kind of business they want is better suited in the US and it's better to start the company on day one in the
Speaker A
US in certain companies and in India so many examples you just gave one right now now too many Indian startup founders are there in fact every CTO it's like CEO Indian we see because America is a very meritocratic society
Speaker A
You can make money for someone, you'll get an opportunity. No matter what color, brown, yellow, brown, all that is forgotten.
Speaker A
Capitalist society boss. We had too much. See, of course in my office it happens. We do it. But India, we just get too fussed into too many stereotypes and this and that and religion. Why ar focus on the person?
Speaker A
But rank risk capital from 1 to 10 or the ability to take risk of America versus India.
Speaker A
Oh, America is there's no country better than America. But one to let's say out of 10 how risky bet how like how risky can they go in terms of putting a bet on new startup versus how risky an Indian VC goes?
Speaker A
America would be nine nine and a half. India we are still at number four. We're still improving with our simple business.
Speaker A
four improve but if you ask me is it going towards five or going to three it's going towards five space company has done so well and skyroot skyro so it's it's true innovation right with small capital relatively they built
Speaker A
something amazing and still long way to go very exciting so you need see what you need now Raj is you need only one entrepreneur to break the logj to become the trend set and all you need is like okay like
Speaker A
classic story right belief see life is belief if you don't believe nothing can be achieved the minute you believe magic happens so sometimes you need a role model or you need an example and it's easy to say but
Speaker A
US capital you tell your mind but suddenly like why Now you come from a small town indor but you're in the middle of Mumbai and where you reached. So there's so many people that you have inspired without you
Speaker A
realizing it. I mean for example it broke the paradigm that you can you have to work your whole life maybe simple middle class people they broke the paradigm and so so many people they so revered but I say don't you think people with
Speaker A
money should push extra for what rather than waiting for someone to break all the barriers it become an entrepreneur or the star to inspire people. You guys have the capability to attract money. You guys can put on put
Speaker A
money on so many people. Why don't take like really risky bets and be like okay out of this 700 crores or 800 crores money. Okay. So when when something's going well, nobody wants to change but saying which has helped me a lot is
Speaker A
is change is important when times are good. So what happens when things are going well? What do people do? You continue then suddenly something starts going badly and oh I put on too much weight or whatever has gone wrong. Then you try to correct it
Speaker A
and hopefully you correct but it's much harder. But it's much better I believe when things are going well, how can you disrupt? How can you change? Because you might as well correct yourself because it's a matter of time before something
Speaker A
goes badly or doesn't go the way you want it. So the best of best is change when times are good. And I've done that 50% of my life in 50% of my decisions and I've seen that wherever I've done that in
Speaker A
50%. It has been remarkable very hard to do. So well change why should I change the narrative why should I change the guest why but that's life so you feel but there will be somebody who comes along and says you know what it's okay
Speaker A
if everyone's doing well I'm going to change and I'm going to do this differently and that really becomes remarkable because he or she then pulls ahead.
Speaker A
We come to talk about founders. Let's say who will break barriers. That founder needs to be extremely delusional and have self-belief.
Speaker A
What point at what point in entrepreneurs life if you have seen and noticed the delusional becomes selfharming rather than actually a good thing?
Speaker A
Yeah. You know the delusion is great at the beginning because you you really want to think of this and go out and go do this.
Speaker A
You need to have exceptional belief. You just talk it over, right? belief but market it's a fine line between being stubborn saying I won't give up hello high water and just fear of failure that you don't want to stop because you feel
Speaker A
so I are you doing this for the right reasons right so that's why you see a lot of companies there are many companies rolling along so I say the opportunity cost for the entrepreneur the fact that we funded him
Speaker A
or her at least our decision said that he or she is excellent is now rolling along at some minuscule numbers at least what we believe to be minuscule to be fair to them may not move on it's one thing to be determined
Speaker A
like they said I'll never give up and by the time AI came it still took so many years but or for that matter co-founder and the rest is history but on the other hand you can be hanging around and waste
Speaker A
your life the opportunity cost is too high so I always nudge people to uh go do a job if you have to or leave this and come and have another shot at gold.
Speaker A
Refresh your brain. But sometimes people and and then this delusion of grander where you are kidding yourself to your original question. That's the most dangerous trait you So have you seen that in founders where sometimes they go into that crazy mode and
Speaker A
what are the telltale signs that you know that founder it's just the way they behave in the conversation you can make out like tell me tell me a come up with horrible founder like stupid business plans where we know
Speaker A
that or blaming everybody else but themselves for the problem right it's easy to blame other people But see babu, you have to fix this problem. Nobody else going to take your problems. Or blaming the investors, blaming everybody but
Speaker A
themselves, blaming the market, blaming competition, manufacturing in their heads and saying that the whole world is against me, but I'm the greatest person in the world.
Speaker A
The best founders have just take it as reality as to something's gone wrong. No problem. We'll move forward. I'll fix the problem. I'll find a solution and I'll move forward. That's what it is from with like I give you the example of
Speaker A
Porter right so many different ways they figure it out market problem I'll fix it yeah but do you think the arrogant found founders they win unfortunately yes sometimes they win right sometimes you know founders are not the nicest people fantasy the
Speaker A
founders are amazing there many founders but and they continue winning somehow yeah I may not like that individual or individuals. I may not like the way they behave but uh they're doing just fine.
Speaker A
What was Travis Kleck? He was an arrogant founder. He's done fine. Maybe some people didn't get along with him in their companies which is documented but it didn't matter. He was a hello high water founder. Arrogant as hell not so
Speaker A
liked but he was on a mission. Steve Jobs similar most hated Steve Jobs. So many stories Elon's hated in Elon is hated like anything best of best. So you can have a very loved founders like Larry Page and Sergi Brin
Speaker A
at Google. But on the other hand, you got to Elon, you got a you know, you got Steve Page, Steve uh Steve Jobs, the ultimate legend.
Speaker A
Many many founders are not liked. So it's okay as long as you're not. Do you look at bending the rules?
Speaker A
That's no like do you look at when you look at a founder and that founder is like arrogant. No, this is how I'm going to do this is how things are going to work.
Speaker A
and with his team also he's like my way or highway and this is how going to be and at least till the time I take it to like couple of 10 million $100 million till the time my vision is there until I
Speaker A
need professional help I am just going to be hellbound arrogant about it and take everybody and they continue winning do you back them yeah legally see at the end of the day we are not the ones running the company right
Speaker A
we run K I'm talking about just people who end up becoming a little toxic.
Speaker A
You see on the other hand other extreme is some founders get love feedback and want feedback from teams etc. uh ratings are so high everything is great they're winning best place to work but the operating business is doing badly so
Speaker A
what's the point so which one would I pick then as a capitalist I'll pick founder but is it is that fair I I agree with that you as a capitalist you will pick up that one but I'm telling you net net if you have met 100
Speaker A
founders who are winning have you seen that out of the majority will that's why they're winning majority but there's quite a like the outsiz returns will be given by let's say mostly out yeah I mean mostly an example of of gentlemen ut
Speaker A
they are the very cute and sweet people yeah so it you know you can't stereotype so are we telling the next generation to become more and arrogant and selfobser absorbed no we're not I mean we're not not saying
Speaker A
anything we want no I'm just asking like when you look at examples Well, this is how it is. And even today in the world where people, it's hard to win. Raj Steve Jobs, I'm sure, must have been a sweet little
Speaker A
cuddly teenager and a nice kid, right? But as he grew, he must have realized how tough it is and how he was treated in his career, how he got fired, how when the company was doing badly, no one
Speaker A
looked at him and he must have realized, boss, this. I need to build something unbelievable. I need to be all blinkers focused. And and the rest is history. and every all no p take no prisoners take no prisoners everyone get
Speaker A
out of the way right and no nonsense but the people who resonated with him he treated them very well you don't see any stories of him shouting at Johnny IV or any other the Tim Cooks of the world
Speaker A
they he built a amazing collaborative team and he did succession everything was done phenomenally well it succession you couldn't have picked a better successor and they go Apple today many times the next person that comes especially for mercury people like Steve
Speaker A
are not that great. Yeah, because but the fact that he could still be this behavior with most people and still have a Tim Cook under him show that he was the best of the best.
Speaker A
True. If you don't get succession right, it's a disaster because but today Apple's shining. He's benefiting to his credit. He picked an amazing successor. I think all these guys at the top the ones that we know as an inspirational entrepreneurs they've
Speaker A
all picked great successes not really Microsoft Steve but destroyed value but later Steve then he retired and he became chairman satya was picked by the board so not all in fact logically you think Bill Gates will pick the better
Speaker A
successor or Steve Jobs But Steve point at some point you kind of calibrate he was like ruthless take no prisoners arrogant Larry Allison yeah this extreme hardworking and attitude ruthless right he I remember there's a story I don't know how true or false
Speaker A
that is but it's like there's a story that he goes up to the group of coders and said this is what needs to be done and they said no this can't be done like in next two days he's like all of you
Speaker A
fired the whole floor was fired and he started sitting there right then and started coding anything is possible and he shipped the possible like beach where he is right so him so Steve Jobs Larry Allison Bill Gates the whole school answer and
Speaker A
personalities lot of arrogance and lot of ruthlessness and competitiveness competitive to another level you have to be boss life business easy okay we we made this right tell me top five most competitive founders in India and I'm talking about not the family
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legacy chairman people like you can't include Reliance or Tatas or whatever in this you can only tell founders the first generation founders who we know now today I would say initially I would say Sachin Bansel he was very competitive he was
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ruthless in the right way he was thinking big and he built an incredible company so and he built and nobody can beat him right 17 billion exit going no one's come close agreed okay and then to leave everything and then
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start Na'vi again and rebuild another unicorn best of the best yeah okay no nonsense Suchin thenish I've said it before.
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Yeah, he's super competitive. I love it. Look at his journey hard. Just think about it.
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I will build a the largest one of the largest hotel chains in the world. It's laughable. 19 year old kid and in a capex heavy business and to come in with no founder market experience with nothing and with a few crores or rupees
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few lakhs and to then and then to go through so many ups and downs and today hopefully on the cusp of listing his company for billions of dollars you can't and I whenever I met him only a few times on life but he's a quiet
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confidence but he's sweet guy he he he doesn't come off as arrogant competitive at least at least the question arrogant competitive the question is he competitive Helia today.
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I find him so sweet and nice. I just love talking to him. I I have never met a more I've never met a sweeter founder in India.
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You never He is super competitive and all for the right reasons. You can't build a company of your scale without being competitive. And look at the scale. He'll be one of India's largest homegrown hotel chains with a global
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brand. It's and now though he's lot of lot of revenue comes from US and abroad like incredible grow mouth shut super competitive unbelievable company amazing and in the future is young people like our friends here at Porter you see the founders of network this
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will be a 510 billion asset in the next year or two and how can someone who's not networked reach out to people like they have to boss you have to find a way we want hustle so all these people any
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of these names I mentioned than you mentioned how do you know anyone when you started indoor be better you can have access I'm calling you help that mean you're a highlyworked indiv today right but you started from zero
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we that's what we're looking for the trade but start this is starting I had zero connection but you found a way now so that's what I'm I'm looking for you that my goal is if you have to come to
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me suppose you're not Raj as you are today but you were Raj 10 years backh It's not that hard to for 5 years back nobody was but if you can get to me then that is half the battle. No
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that's the trick. That's a key. If you have figured out a way to reach me then probably and if you're smart enough to reach to me through a good reference that's key is a good thing. I give you credit
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sometimes you may not know but you have to be smart enough. What is something that you like when do you look at company and you're like this is finished?
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See we never give up. Uh we we for us it's finished when the founder gives up big difference. We never give up because if the founder can convince us that's what we need. Fractal has gone through so many days of no cash. This is
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not in 2001 and two but I'm talking about even 2007 8 tough times. Even brother issues but shikan were never going to give up and I can go through so many examples in our portfolio. Porter Porter though in moi
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does are in moi multiple multiple times I can go through every one of my other businesses have gone through this tough time whether it be health card 1 MG all of them went through tough times network went through
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tough times we k3 we have so many interesting companies but why do but you don't have have a time where you like written offer it's too late he's not understanding he's just 100%. So what we do is we realize some
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founders professional venture capitalist. So if we don't see the company break out or at least get to a reasonable scale but it's going nowhere to those companies and we tell the founder write off we respect your decision to run your
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your life but we are going to tell our investors that whatever residual stake we have is worth zero and you you'll remain my friend I'll help you but as far as coming to reviews helping you in any way I'll only
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help you if you call me but I'm not going to proactively follow up in most cases because we want to drive value together but then would you pick up phone or someone you have written off 100%.
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Isn't it like waste of your time and be like Sunday less priority? Less priority but still enough that if it's genuinely issue that is urgent I'll take it. Yes.
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Do you hold grudges against someone who's lost you money? No. No. No chance. I will not hold grudges. I'll just feel next time especially if they done it the wrong way. I just said we'll fund second and third time founders and fourth time
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founders. So no grudge but if they done it the wrong way spent crazily and not listened even if you given good feedback but no grudges I can think of one company that we lost millions of dollars. I remember last year two years
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back millions but the founder was in this crazy growth mode and I was trying to convince him out of control. I remember And he came 10 minutes late to the meeting. So meeting he was exhausted. He said meeting officer work.
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I said company. He said I don't know couple of thousand. He said my I just come from meeting the landlord and the company's losing too much money. So my whole strategy was to explain to him why I thought it was too much burn and
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how we should cut down. Before I could speak he is telling me work. entire negoti and sure enough he was listening to me but meeting was going through his head you know like exploding and then unfortunately now did do I hold
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a grudge no it was a learning experience for him so obviously that I'm not going to be happy but will you fund him again yeah seeking a brilliant guy 100% But you won't hold him.
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chance experience at least bad credibility, bad word in the VC world in the way you do it and he did it maybe where he was hubist grew too fast but that's life that was an inexperience that's it okay so genuine mistake is fine what is
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a bad mistake where founder did you dirty well if you're using money for your own personal requirements and enjoying yourself with our capital that's a bad example First class business I was sitting in the lobby of four seasons.
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Nothing wrong with four seasons, right? One day you buy four seasons boss. Who owns four seasons? Bills, you deserve it. Are you cribing that Bill Gates owns four seasons or a large stake his his investment company save the money
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beautiful value for money place is it? If the founder salary and all of this bad sign for you guys.
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Yeah, you'll be hungry equity. Now you see what I don't take it as serious as other VCs take it to sub life. I say take a salary that you can just about sustain. It should still be pinching you
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but you're not thinking too much about this. It should be nowhere near your market price like nowhere close. That's why you're a rock star. Market up 60.
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Again, I'm making it up. Everything is relative. So keep it tight but basic amenities.
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stupid or something stupid. After that boss come you you will be the richest guy among all of us eventually but only the equity in your business. No. So how how much salary should a seed founder take series A and series
Speaker A
very hard to say that because it depends on the age of the founder also know 40y old founder school that will definitely be a little bit more than a 25 year old founder so everything is relative okay tell me a 25 year old under 30
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founder article seed I'll I'll make two three buckets seed series Okay. And okay. So B 20 million plus about you know.
Speaker A
Okay. So seed would be what valuation let's just say anywhere from 5 million to 20 million seed valuation enterprise value.
Speaker A
How much? Okay. Let's say money raising like money in the bank would be better.
Speaker A
Seed money say 1 to2 million. Okay. So that's BR 1 to2 million. Okay. And series A how much would be raising?
Speaker A
Seed would be at least 5 5 million series A. Okay. Then after that 15 million 15 M okay then what should a and then there are two founders 25 year old founder 45 year old founder huh so seed what salary should a 25 year old
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founder get 30 40 lakhs a year again I haven't seen the numbers recently but I'm just giving common sense it's a good salary for 25 year old three lakh rupees a month is great salary is really good salary
Speaker A
25 30 lakhs say maybe maximum 40 lakhs Then for the older guy it will be maybe 50 60 lakhs.
Speaker A
Mhm. Because of responsibilities 2x you know 50 60 lakhs take it then and then as you go higher let's say a is just a 5 million round. So I'd say just 10% more you know maybe okay at best then the bigger jumps comes in
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that 20 million plus rounds where at least you can get let's say 30 40 lakh 50 lakhs 50 60 lakhs and let's say the older person goes to maybe 75 80 lakhs only do they take double salary somewhat
Speaker A
double if the base 20 million no I'd say eventually 60 70 lakhs I want to see as they go to after that let's say closer to IPO then you can even get one couple of crores it's all relative
Speaker A
you come and with me you want the founder to basically pay pay his or her bills but not feel comfortable at all because true wealth is coming from ownership right see you can be rich or you can be
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wealthy so the goal is we only want to go after want to be wealthy rich wealthy as a entrepreneur and then let's say 70 okay this I get at what point founder should start doing secondary a little bit
Speaker A
I think sometimes basic lifestyle 40 45 if they want a house I'm not saying it's the most important thing we don't mind if some small pieces money is taken off to pay off just yesterday we approved a one unicorn founder
Speaker A
shares and I need money now it's 45 I think but what series Bad should they start series B is too early because then you're selling too fast their own company I'd say much later okay preipo type see the idea of founder is like for 8 10
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12 years we want that founder to be so obsessed about his own company and loving his company and building so much of his or her net worth in the company that that is very exciting for us because in our
Speaker A
selfish interests we aligned with that what do you hate what kind of expense do you hate when a founder does it on a company account.
Speaker A
Uh I think any expense is excessive, right? Like why do you need to go to the best restaurant in the world and eat?
Speaker A
Yeah. run the company like a temple like really focus on every rupee because you got so many shareholders and eventually going to go public even more so responsibly privately there's so many examples I can give who are doing very different lives and there
Speaker A
examples of people very public companies we both know I won't mention name because they're friends of mine who spend insane amounts of monies on the public expense private j they no need they get away because shareholder rights in India
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minimal rubbish but us compared to India way more like the founders on company expense spend way more than India even in a seed company their salaries and their money spending habit are insanely high market so big but let's say
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both of them have raised couple of million dollars not big the US founder is living a are it's a consumption lifestyle. Most Indians are very new but by nature most of us Indians are very still let's say more discreet
Speaker A
in most cases but America may you can talk about your net worth also publicly yeah but series B founder you can make out with a series B founder it's difficult to make out here in college once one professor asked us
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who has $500 in your pocket so I think one two people say you're only 18 years you among the middle class of America.
Speaker A
Everyone's living in debt. It's a debt obsessed country. Everyone wants to just live beyond their means. Here's here's my last question to you which is when if I give you let's say 100 crores today what are the and I show
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you five sectors how much money will you put where? Okay. So I'm going to do I I'll I'll do it right side. Can you grab me a chips?
Speaker A
So we'll give you chips and you put the poker chips on five sectors which are hot and booming in the VC world right now.
Speaker A
Okay. So these are the only options I have. These are the only options you have.
Speaker A
Okay. So I have to do what now? Okay. So you have 100 crores. Let's say you have 100 crores each. Let's say chip is 10. 1 cr.
Speaker A
Chip is 1 cr. 1 cr whatever color doesn't matter. And you have to build your portfolio 100 crores for maximum returns looking at today's sectors. So let's say I pick 50% for one sector.
Speaker A
You can do whatever up to you. These are the five sectors. Where would you put how much money?
Speaker A
So each chip is how much? 1 cr. And I can put 5 crores. You can put 100 crores.
Speaker A
100 crores. So each okay got it. So you can take like 10 together put it somewhere.
Speaker A
So 50%. Okay. So you telling me 4 5 6 7 8. So you you want to put all your money 50% out of the 100 50 crores. You want to put full 100 please.
Speaker A
Okay. Give me more stacks then. the color. No, whatever color it's okay and the rest is up to you. So, this is you're saying five 50 crores you would put in AI technology out of these five categories.
Speaker A
Okay. What? So, I'm putting in within this um and you're only putting in startups.
Speaker A
Okay. You're not thinking about Yeah. Yeah. So, right at the beginning. Right at the beginning. So, if EVs you think the startups are not going to be big. Yeah.
Speaker A
Only large companies are going to be big. So, then you want example like that.
Speaker A
This may 5 cr alo. We have five here. Okay. 55 cr then there's 45 um 50 20 crores.
Speaker A
Why? Because health check health is a huge opportunity in India. Yeah. Pra rest. So why did you put I'll come on this the last. Okay. EV is a mobility pay. Why did you put the least?
Speaker A
because we are a you know seed sage fund and the end of the day uh most of these categories require a lot of capital and therefore we feel that most of them don't fit into what we want to do in most cases. Uh
Speaker A
secondly India is actually at a very interesting phase at 5% of EVs is when actually EVs take off. So logically I should be putting more there and maybe next time I come I'll put more because it'll probably suddenly explode. Like in
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China it's become more than 50%. So maybe I'll be completely wrong and I'll regret not putting more in EVs. I'm thinking now 10 but maybe I should put 10.
Speaker A
But from where will you take out 50? 1 2 3 4 five. So one more is there. So all five is so you are making this 10.
Speaker A
Huh? 10 and renewable energy five. Why? Yeah. renewable energy because again exactly the same reason we I believe India is well well uh tuned for renewable energy because just one kind of energy is not going to make us uh self-sufficient and
Speaker A
therefore you can see a lot of money going to renewable energy uh in companies like Inox etc have really scaled up in Suzlon etc etc uh but it's not a VC game it's not an early stage VC game and for so for more of an
Speaker A
opportunity I'd put more money but if I had to put the money because of the constraints of our fund that's what renewable energy is so because the small money won't be able to survive here that's what I mean in a sense it it doesn't move the
Speaker A
needle in these so therefore there's certain categories like when people say will you not do this so like for example we won't do alcohol we won't do you know cigarettes we won't do sin industries why because why not alcohol
Speaker A
because our investors they many of them don't like us to do these categories so then they won't give us money and it's okay and we we don't want to really capital not right enough opportunity opport but then renewable energy you feel like
Speaker A
the reason there's a huge need for see which is not a big headroom every category has a massive but this is more like PE and large conglomerate that's right so that we are out of that for now okay
Speaker A
then can pick health tech no then second was EVs and mobility EV mobility I believe that this this would change that number will change dramatically from that even that 10 I've put to you know maybe 15 or 20 in 3 4
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years because EV scale comes once it reaches 5% of overall cars and India's at 4.5 or 4.8 eight. So we're almost on the cusp of explosion.
Speaker A
So as long as the government keeps supporting uh EVs, we will see a big opportunity there. And then across mobility in the answer businesses that come along with but don't think large conglomerate large conglomerates will take over this
Speaker A
market. They're always great entrepreneurs. You look at ather energy, right? What a great company. There's so many conglomerates but a is doing phenomenally well and they continue to execute. I can give you many more examples within EVs and mobility. Uh
Speaker A
just recently we we almost funded a company called River. Uh they make these amazing bikes.
Speaker A
Great entrepreneur, amazing entrepreneur. I'm sure he built something phenomenal. We will uh regret missing out. I told him that.
Speaker A
So I feel that's another big opportunity in India and that's why he moved from 5 to 10.
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Do you think a car company can be built in India just by an entrepreneur?
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It's more difficult. It's very very hard. Was very capex heavy but you never know. You saw how Elon came along and in China there was an entrepreneur who built it. US entrepreneur built it.
Speaker A
There's a person I know Lee Jun and he created a company called Xiaom which of course everyone knows now because the Xiaomi phones in India but who would authority to create a car and that car is the hottest car company in
Speaker A
China today. It's that that car is so beautiful. I'm waiting for it to be launched in India by the first day. It looks 10x better than any Tesla maybe 100x. But then in India do you think anybody could do it?
Speaker A
Why not? It's like a young startup. I'm not Xiaomi was big company when they entered car. It's nothing Raj is impossible. It's only the belief. Either you're waiting for an Indian entrepreneur to prove it to you or you've
Speaker A
been living in the US or been living in China living somewhere and seen other people. There's always the first person.
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So my business is about that being before the market talks about it. Then you see fintech and digital payments in the government's done a great job.
Speaker A
Indian founders have done multiple businesses have scaled in fintech. It's very exciting. One of our most exciting companies is Snapmint. Buy now pay later fintech business.
Speaker A
We should to return that whole of K2 multiple times thanks to Snapmint. Uh so we're big fans of fintech. Uh banks have become legacy, right? So you can see digital assets really scale.
Speaker A
Yeah. And so I I'm very bullish and we will continue to invest in uh fintech companies whether it be uh payments businesses. You've seen how big they've become. You know there's several of them are multi-billion dollar businesses.
Speaker A
Many of them I met when they were just starting up and see whether whether it be Razor Pay whether it be you know M Swipes the world everyone has done really well.
Speaker A
Okay. So that's why you continue to battle. Don't you think it's been oversaturated? Well there's always new innovation. We even now we're seeing new companies with a new new edge. there enough pain points in in the businesses that they're coming
Speaker A
out to create and more like we have thesis across multiple years fair and then health tech I think this is completely under under penetrated India anything in India with health whether it be hospital beds which is infrastructure physical infrastructure
Speaker A
to digital health uh mental health the penetration levels of health in our country are abysmal so the need for more health whether you call it health tech you just call it health related businesses uh is immense.
Speaker A
Isn't it one of the hardest sector to crack? Yeah, it's very hard but like I said earlier in the in the conversation we love hard problems.
Speaker A
We love hard problems. That's why we wake up in the morning to crack hard problems.
Speaker A
Fair and then AI and technology. What do I say? Why like full money you have put here isn't do do you think this bubble you know there will be lots of companies that will die Raj because like any hot
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category will always have entrepreneurs who are opportunistic or have the right reasons but have failed so there's and there's too much money coming in but this will be the biggest category of my career it's it's almost infinite time it's giant it's the
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largest TAM I've ever seen in my life every company will have to have some version of AI whether it be firm like K capital Capital whether it be your firm any company in the world without an AI strategy and execution of AI will not
Speaker A
survive in the years to come right now there's a lot of negative negativity like oh but company's not really using it and so forth I agree but it'll come and when it comes if you're not ready god forbid and so that if you read
Speaker A
anything about any company in the world today which company is not an AI company today there is no company left that cannot have an AI strategy yeah So like I said there will be some burnout. There is happening burnout.
Speaker A
There will be deaths. That's part of our lives. But that category AI and tech combo is very very very exciting. It's huge and as VCs we are very excited to be part of that journey.
Speaker A
Tell me one specific startup idea or an opportunity which a young person can take it from you and build it today.
Speaker A
Well, now take I'll give you an example of one company we just did recently at the beginning of the year, Super Living, right? It's young founding team, amazing founders. They had found a market fit because they came from Misho.
Speaker A
So they knew how to sell to that TG and uh my partner Sita was leading the deal. She loved the founders from day one when she met them and you know the rest is history. We funded it. They work
Speaker A
with small towns. Think of it like an open AI for small towns. you know they consult people with government this issue this related issue yeah they're entrepreneur that TG is not comfortable using a let's say a fancy AI like chat
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GPT or whatever but they're much more comfortable here and those guys understand that TG TG is paying it's a phenomenally exciting company and it's already exploded light has already given us $7 million in the business it's literally exploding
Speaker A
and we call it consumer AI that's our thesis we are big fans of consumer AI companies because the larger companies in the US so globally not interested in this market yeah very small for them secondly the entrepreneurs understand
Speaker A
this market much better than any of them would understand there's edge why should cave in the deal and why should the entrepreneur win in their respective categories so consumer is something we love what is a personal problem that you're
Speaker A
going through today for which you'll pay someone if they solve that problem for you I'll answer that and before that I'll come back to your original question in an ideal world I know it's late but I believe India ideally needs a large
Speaker A
language model of its So if some founder is willing to think very big and willing to go out and say okay you know what I need 50 billion I need 200 billion I will do it there is money available somewhere in the world
Speaker A
I'll go do it and build an Indian you know deepseek or whatever that will be amazing because India needs sovereign power around this because other dependent on global companies we're dependent on Chinese companies so I would love to find such an entrepreneur
Speaker A
maybe we may not able to get into the deal because they may require lots of money but I'll be clapping on the sidelines for for such an entrepreneur.
Speaker A
Got it. And pain point. Oh, there's so many pain points I have. You know, for me, painoint, if someone can, you know, launch a a software drinks. I love drinks. So, I like uh you know healthy drinks, low calorie drinks. So, I don't
Speaker A
see enough options in India. I love to drink all kinds of uh drinks which are healthy but lowal. So I'm now I start just phoned up Nirj at Hector Beverages.
Speaker A
They've created this very healthy soda. Okay. So I love it. I'm drinking four or five bottles a day now.
Speaker A
Oh, interesting. Did you try Zero by Karan Ola? Karan Bhai launched it with VBA founder.
Speaker A
Yes. Yes. Try care. But it's I've heard very good things about the company. I check it out.
Speaker A
Interesting. Give me an idea which has not been built and you think is a problem that somebody should solve.
Speaker A
The pain I would talk about is mental health. H mental health is got a big stigma in our country. Having said that in the last few years slowly people have started to talk about it but I have known people
Speaker A
who've gone through mental health issues in our country and uh the level of support and help is nowhere near where it needs to be.
Speaker A
Agreed. So that's the one I would look at is mental health and say for God's sake that we need thousands of more mental health specialists in our country and entrepreneurs going to build companies around mental health. I think can be
Speaker A
incredibly successful because it's a pain point not just for you and me but for millions of people around the country.
Speaker A
I absolutely agree and I'm so close to it because I've seen it in my family and there's absolute no support.
Speaker A
You agree? It's it's horrible. So you can see what a big opportunity it's a big opportunity. Plus if someone's going to someone's actually building a good thing I would fund it regardless of whether it works or no. I
Speaker A
I would put my money behind it because I want it to be. That's what I was thinking. I got so many but this is the one I would say number one and I would fund it like I'm sure you
Speaker A
would too just in a minute just for the bet that it should work it should exist because it will make the world better.
Speaker A
That's right. Thank you so much my pleasure. Thank you. It was pleasure having you.
Speaker A
Thank you so much for doing this. Thank you boss. What's up sir? See you once again.
Speaker A
Beautiful room by the way. Thank you. Thank you. We're trying. Of course, it's an understatement, but it's amazing story.
Speaker A
Nice. One day already. We are just exactly the point. It's phenomenal. Thank you. Great journey. Thank you for watching this episode till the end. We would love to know what you liked or disliked about this episode and which guests you would
Speaker A
like to see on the show. Let us know in the comments. Your feedback help us improve and make every episode a little better. I'll see you next time. Until then, keep figuring out.
Topics:venture capitalstartup foundersentrepreneurshippitch deck tipsfounder traitsSasha Mi ChundaniMumbai AngelsK Capitalstartup advicebillionaire founders
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