Shah: Follow-on rounds require rebuilding the investment case from scratch
Shardul Shah · Shardul Shah: How Index Makes Decisions & Why Benchmarks & Averages in VC are BS | E1202 · 20VC with Harry Stebbings · Sep 16, 2024 · at 18:57
Shardul Shah is a Partner at Index Ventures. He explains his process for deciding whether to continuously double down and concentrate capital in existing portfolio companies.
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“So I'm not thinking about averaging down my cost basis. I'm not thinking about incrementally increasing my ownership. I'm building a net new investment case on, can I create, you know, a fund returner? And with that, like I do all the work again. So if I think about companies that I've been involved with, I've rotated shadow partners to help me with an objective view on reassessing the management team. I've redone customer calls. I've redone competitive analysis. I've rebuilt financial models. Like I do all the work again and Often in, like, short order because I've doubled down, you know, multiple times within a year.”
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