Jan 19, 2024 · 1h 37m · neon-show
Before Applying For A Venture Capital Job, Watch This Podcast! I Blume Ventures Partner I Neon Show
0:00 / 0:00
▶ Watch on YouTube →
gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
Blume Ventures Partner Ashish Fafaria provides a comprehensive masterclass on the evolution of Indian venture capital, the institutionalization of venture funds across multiple fund cycles, and the decision-making frameworks required to back outlier founders. He shares practical insights on navigating the global LP landscape, managing early-stage investment risk, and cultivating a long-term mindset for careers in venture capital.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. How this is scored →
Siddhartha as informed peer 3.7 Guest teaching 5.7 Guest disagreement 1.5 Siddhartha pushing back 0.6
speaking balance: gold is Siddhartha, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 1:31:08 Dismantling candidate entitlement
Ashish forcefully mocks the entitled attitude of credentials-heavy candidates demanding one-crore salaries without caring about carry or long-term alignment.
Hardest push from Siddhartha ▶ 25:00 Host pushes extreme fund return exampleSiddhartha challenges the standard return expectations by citing an $8M seed fund returning $600M, forcing Ashish to contextualize outliers versus repeatable institutional funds.
Biggest teaching moment ▶ 19:40 LP check size constraints on first-time fundsAshish thoroughly explains why institutional LPs with minimum check sizes cannot invest in sub-$100M first-time funds due to concentration limits.
Siddhartha holds their own ▶ 1:34:25 Host lays out 5-muscle VC operational frameworkSiddhartha demonstrates deep insider knowledge by articulating a comprehensive five-muscle framework for venture capitalists (sourcing, judgment, servicing, marketing, fundraising).
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Siddhartha as informed peer | Guest teaching | Guest disagreement | Siddhartha pushing back | Why |
|---|---|---|---|---|---|---|
| The Evolution of Indian Tech and Early Venture Capital | 2 | 6 | 1 | 0 | The host acts mostly as an active listener and prompter, asking basic historical clarifying questions such as what the Y2K bug was. Ashish delivers a sweeping, pedagogical history of the Indian tech services boom and early venture capital. | |
| Founding Blume Ventures to Bridge the Early-Stage Funding Gap | 3 | 5 | 1 | 0 | Ashish explains the seed funding 'valley of death' in 2010 that led to Blume's inception. Siddhartha interjects with guesses on angel ticket sizes, which Ashish refines based on actual cap table data. | |
| Navigating the Global LP Landscape for Fund 1 and Fund Returns | 5 | 6 | 2 | 2 | Ashish explains endowment dynamics and the difficulty of raising Fund 1. The host demonstrates knowledge by citing Chris Sacca's Lowercase Capital Fund 1 return, which Ashish acknowledges as an aberration before detailing Blume's dragon returns. | |
| The Global Institutional LP Hierarchy and Sovereign Wealth | 3 | 6 | 1 | 0 | The host asks definitional questions about sovereign funds and check sizes in the LP hierarchy. Ashish systematically breaks down endowments, sovereign wealth funds, and DFIs like CDC/BII. | |
| Scaling Blume from Fund 1 to Fund 4: The 4-Point Institutionalization Playbook | 4 | 6 | 1 | 1 | Ashish lays out the detailed four-point institutionalization framework that allowed Blume to scale from a 100-crore Fund 1 to a $290M Fund 4. Siddhartha guides the pacing and asks for structured recaps. | |
| Diverse Portfolio Case Studies: Purplle, Slice, Turtlemint, Jai Kisan, and Exotel | 3 | 5 | 2 | 1 | Ashish deliberately reframes the host's prompt about top portfolio winners to instead profile five diverse, non-consensus case studies (Purplle, Slice, Turtlemint, Jai Kisan, Exotel). He also corrects the host on the exact number of unicorns. | |
| Early-Stage Investment Mindset: Rules, Exceptions, and Avoiding Scars | 4 | 6 | 2 | 0 | Ashish shares Blume's early-stage investment philosophy, emphasizing that venture capitalists must avoid thesis scarring and be willing to make exceptions to their own rules. | |
| Core Attributes of Outlier Founders | 4 | 5 | 1 | 0 | The host identifies the common thread of founder obsession, which Ashish validates and expands upon with specific operational patterns from Unacademy, Slice, and Purplle regarding secondary sales and capital discipline. | |
| The Next Decade: Macro Shifts and Deep Personalization in India | 3 | 6 | 1 | 0 | Ashish outlines macroeconomic shifts driving Indian tech, critiquing superficial trillion-dollar TAM narratives and arguing for deep personalization in financial services and CBDCs. | |
| Careers in Venture Capital: The 15-Year Horizon, Compensation, and Core Muscles | 6 | 6 | 3 | 2 | Ashish gives a blunt critique of young professionals' sense of entitlement and instant gratification in VC. The host introduces his five-muscle VC framework, which Ashish validates and enhances by adding a sixth muscle: founder empathy. |
Statements from this episode (22)
Fafaria: Indian tech IPOs were hitting public markets at 65 to 100 crore rupees
“Do remember, back through that decade also, there were two-digit IPOs hitting the markets, where people would IPO at 65 crores and 85 crores and a hundred crores, and it would still be big enough. That is how small and It's nascent. The Indian capital markets …”
Fafaria: No ground-up India-centric VCs were capitalized from India by 2010-2011
“Fast forward, 2010, 11, when we were still not having original grounds up India centric funds, we did have a little more effort from the eight, 10 that I mentioned, fingers of two hand analogy. We had a few more where from abroad or US or China, they would hav…”
Fafaria: Dollar-denominated capital would have halved Blume's early fund returns
“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.”
Fafadia: Carbon Clean Returned Blume Ventures' Entire First Fund
“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.”
Fafaria: SIDBI is effectively India's equivalent to a sovereign wealth fund
“SIDBI is as close as it can come to. So that's effectively our sovereign wealth fund.”
Fafaria: Blume Fund II was 85-90% institutional and two-thirds international
“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…”
Fafaria: Converting an institutional LP requires seven hours of engagement over years
“Unless the GPs have engaged with an LP for seven hours. This is hard to convert because you need that kind of a time and depth to understand the whole thing very well. And it's not that you do a morning, evening, seven hour thing. The seven hours has to come s…”
Fafaria: Blume achieved 15% DPI on Fund I before raising Fund II
“We had a 15% DPI. We got to that point where some small exits had happened.”
Fafaria: Six institutions provided $82 million of Blume Fund III
“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.”
Fafaria: Blume's Fund II is tracking toward an 8X to 10X return
“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…”
Fafaria: Blume reduced fund portfolio sizes from 70 to under 30
“From a portfolio construction of 60 odd companies, almost 70 companies, We were now at fund two, 45 plus. Fund three, not even 30.”
Fafaria: Blume plans to cap Fund V at $250M-$300M
“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.”
Fafadia: Exotel operated for nine years on just over ₹2 crore
“And then there's Exotel. It's a story which has been told many a times over by just a couple of crores of capital, literally little, little above two crores, and riding it for nine years, and paying advance tax, which is more than the funds that you use.”
Fafadia: GreyOrange returned an entire fund without being valued as a unicorn
“So gray orange is a dragon. That's the difference. It is not a unicorn, but it returns a full fund.”
Fafaria: The core job of VC is making exceptions to your rules
“The other thing that I do try and remember, remind myself, and we do discuss during our leadership meetings and ICs is, ours is a job to make exceptions. You first make the rules, and then you make exceptions.”
Fafaria: VC nimbleness is evolving thought to rationalize exceptions, not fast checks
“The nimbleness until the froth was there in 2021 was defined by how fast you can cut the check and land the money in my bank. I think nimbleness comes in the way we are able to evolve the thoughts and come to rationalizing an exception that you want to make be…”
Fafadia: Relying on outside investors not on your cap table is disastrous
“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.”
Fafadia predicts physical cash will completely fall out of circulation soon
“So in a few years from now, I do imagine and dare to say that cash will be out of circulation.”
Fafadia: Trillion-dollar TAM pitches are meaningless without addressable profit pools
“When somebody's pitching a market size on real estate, you talk about trillion dollar market size. That's a BS. One has to look at the profit pool.”
Fafadia: Entering VC with less than a 15-20 year horizon is wrong
“If you're looking at anything which is less than 15, 20 years, it's a wrong foot forward.”
Fafadia: Venture capital is the highest level of intellectual sales
“You are in a job which is the highest level of intellectual sales.”
Fafadia: Founder friendliness means honest partnership, not conceding to every request
“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…”