Blume Ventures

“You can't build a team. You can't build an institution with twenty million dollar funds, thirty million dollar funds. It's tough. It's a lifestyle business as we tell other people who come and pitch to us. You can make it a lifestyle business, but you can't in…”

“And it's because of new behavior creation that incredibly long, large long-term value gets created in the world. And India is almost the antithesis of it. All the large-term value you're trying to create is in Me Too's. Right? By pumping more money and trying …”

“We don't want to be shooting for less than five X funds. In India, things take time, so I have to adjust for a time factor that things will take two years more, so that hits your IRR. We're measured by IRR. And so, don't want to take an easy way out and say, t…”

“There's market conditions. So the crowd space gets super crowded and then the number of check writers disappear. There is niche markets, which we are guilty of funding in the first fund. Nobody seems to care about it after us. So then you're at two, three X, i…”

“And then I saw that there was a huge gap between the large series-ish funds, which were all above a hundred million, and the angels. And so we said that there's a huge gap here. It can't be that every company miraculously takes a few angel checks and becomes a…”

“So amongst the hits we've had, metal has actually, surprisingly, delivered the most dollars, as much as taxi for sure, because though the size was much smaller, my stake was much larger. So fund one is a very funny fund. We had three percent in one and 10% in …”

“By the fifth fund, which is maybe five years away and that's how far we've thought. So I don't know about 10 years, but five years is what we've thought. I want to be able to have five hundred million under management. That's when, that's 20, 24, right?”

“Philosophically, I don't believe in it. So until a company kind of reaches a billion dollars in valuation, and then I've lost track of why the hell they're raising more money or why they're mindlessly raising more money.”

“The other thing I would argue where we failed quite a bit was trying to do vertical product commerce. Got onto the cycle too late. That entire commerce engine works as a herd mentality. Either everybody's making bets or nobody's making bets. And then you would…”

“So, I don't think the herd mentality is going away, right? Because effectively, It's led by how you think the next check writer is going to think. Right? And which automatically means by then the herd mentality is forming.”

“So the more common themes that get picked are dangerous in some sense for a small player like us, because then you're always under headwinds, because there's a bigger guy who says, you know, I've already made a bet in the space or adjacent space. I won't fund …”

“How many, I think, 75% of our companies have lost at least a minor co-founder by the series B, series A.”

“If you look at 2011, 1213, our portfolio, 90% of our investments were made between a million and a half and three post.”

“And our first fund is marked up above three X. We've returned half the fund and that's not totally off whack.”

“But I think to say that you can actually build a very large business without a capacity to storytell is fooling yourself. It has nothing to do with VCs. How do you sell? How do you sell to your customers? How do you sell to your employees?”

“The KRA is that if you can't get your exited founders back as LPs, then we've screwed up somewhere.”

“Those risky bets are the ones which are going to make the most money. Like my LPs tell me, historically, you were shying away from that. It's probably true. It was basically, you didn't know what's going to work, what's going to take off, so you're hedging, ma…”

“I still don't have, I've not seen a rupee of carry. I've not had extra savings for like eight years.”

“I think by now, almost every series B founder in my portfolio earns more than me, which is a good sign.”

“In the case of OYO, we had something remotely competing when Ritesh met us first as O'Revel even before the Thiel Fellowship. He was saying, I do like an Airbnb for India, right? And he said, yeah, but we have like a vacation rental place in our portfolio. How…”

“I don't have a single company other than taxi for sure. And now gray orange, which are, Crossed a hundred million in valuation.”

“You bloody well built to a proper IPO-able business, or don't bother is my take. Even the US market is saying that, and they've been doing it for 60 years. There's no hacks to that, right? Eventually, if you want a great cash exit, that's how it will happen is…”

“The others were all very promising businesses to a global buyer who either wanted India or emerging market access or wanted access to the product portfolio to take global and thought this little Indian company out of a Bloom portfolio was best in class, right,…”

“And gray orange is much earlier, but we continued with that stream and we allocate almost a third of our capital to that bucket.”

“Similarly with Swiggy, when I can't remember which two founders I met on the rooftop of UB, but they were selling more of a courier aggregator. It's called Bundle, which is the original name of the company. It's still used today. And I said, no, I don't think …”

“None of us, you know seed funds have discovered a unicorn. Ever in these spaces, right? So if you look at you know, our good friends Karthik at Bloom, Orias, Rehan, none of us have so far got a unicorn, right?”

“I think what I would suggest to founders is that if you're in a lift sector, which is positively structurally favorable, then you want to dominate, you know, win market share keep customers with you. If you're on the other hand in a tougher sector, then you wa…”

“There's going to be a lot of talent on the streets now, the good talent. Either from layoffs or from pay cuts or for whatever reason, the entire company is going down.”

“It is the only internal variable, which we believe in also. It's the only internal variable that you can control is your cost, your cash, right? You can't control how, how much your gamer is going to spend, you know, for your game, Or the enterprise sales, the…”

“You know that in any M&A, when you're closed, you have one month cash in the bank, then it becomes distressed, right? The other person can squeeze you.”

“I think you know, on the supply side, which is the supply or the number of gig workers, I think will definitely go up.”

“It's very hard for you to kind of get into a VC firm. I mean Without knowing some folks or without having created a brand for yourself especially if you are under, like, you know, late thirties, early forties someone like me who's been incorporated did not hav…”

“I think at very early stages you shouldn't worry so much about moats as much as a consumer friction you're solving for. If the consumer friction is compelling, then in the consequence of operating, you will gather enough data, which could become a moat, or you…”

“All great investment opportunities come out of these serendipitous circumstances, and what you're really doing is creating the conditions for that to happen.”

“And I would say that the biggest thing that I've unlearned is don't worry about the attack vector. Worry about the size of the problem. Don't worry about how they're solving for it. That can change. Maybe that's not even important at this stage. Don't worry ab…”

“I think almost every single great investment decision typically is inbound. It's not outbound.”

“If I have to invest in a company which was solving for this vacuum thing, I really want to see that are they solving for a temporary or permanent one? And in the permanent one they're solving, are they solving problems of access for historically non-consumers?”

“Vijay Shekhar Sharma, the first guy to give us a check. Rajan was there, Rajan and then Bloom, India Push and Ganesh, all of our LPs, previous ones, they repeated, they brought their friends.”

“I raised about two and a half crores, little less than two and a half crores at a 10 crore post money valuation. So they got a chunk they walked away with Almost 25% of the company”

“The kind of terms and conditions that I had then accepted. Looking back, 90% of the term sheet was nonsense.”

“Bloom put in all their largest checks. So, so Bloom's largest check was in Minja. Which is a more than a million. They have never done such checks.”

“We had a 15% DPI. We got to that point where some small exits had happened.”

“Here, in fund three, six investors constituted eighty-two million dollars of the capital. So, in fund two, you had sixty million dollars. In fund three, you had six institutions pretty much rounding off to eighty-two million.”

“Even today when we look at our fund one, we have one company that is one time the whole fund. It's a dragon outcome. Okay. So this is carbon clean. And it has done incredibly well.”

“Two third came outside of India. One third came from India. And that is one way to divide this. The other side of the two by two is how much was institutional and how much was retail. So for us out of the sixty million dollars, almost. 85, 90% was institutiona…”

“So gray orange is a dragon. That's the difference. It is not a unicorn, but it returns a full fund.”

“Founder friendliness of Bloom does not mean that We are exceeding to the founders request all the time. It's about a partnership and the founder respects our feedback, even though it might not be what he wants to hear. And the friendliness is about the best in…”

“From a portfolio construction of 60 odd companies, almost 70 companies, We were now at fund two, 45 plus. Fund three, not even 30.”

“And today when we talk about the dollar rate, we are in the eighties. Right. So, it's, Almost doubled. That means if we, thankfully we were not having dollar capital, but if we had dollar capital, our returns would have halved.”

“So when I say dragons, I mean each of these four unicorns are dragons also. So if sold at that point in time, they return the full fund. So what you're talking about in terms of eight X and 10 X funds, fund two looked like that kind of a promise. And even toda…”

“Leaving it to a fate of an investor means you can you create a bridge around which is enough for this cap table to support you? That is okay. But it is a disaster to leave the fate to an investor who is not on the cap table.”

“Fund four is two 90, fund five need not be five hundred million. You will go with the two 50 to three hundred million dollar story at that point in time, maybe as well.”