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Sep 20, 2020 · 21m · neon-show

Ankur Bansal, BlackSoil Capital on Venture Debt funding in the Indian Startup Ecosystem

Ankur Bansal · 16m spoken Siddhartha Ahluwalia · 3m spoken
0:00 / 0:00
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In this episode of the 100x Entrepreneur Podcast, BlackSoil Capital co-founder Ankur Bansal explains the operational mechanics of venture debt in India, detailing BlackSoil's permanent capital NBFC structure, credit underwriting strategies, and the non-dilutive benefits of debt for high-growth startups.

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 4.4 Guest teaching 3.2 Guest disagreement 0.2 Siddhartha pushing back 1.2
05100:0010:0020:001:27–3:53 · Siddhartha as informed peer 3/10 BlackSoil's Startup Portfolio and Permanent Capital NBFC Structure Siddharth asks straightforward foundational questions regarding portfolio companies, deployment figures, and BlackSoil's NBFC capital model. Ankur provides descriptive details without friction.3:54–6:49 · Siddhartha as informed peer 4/10 Differentiated Lending Strategy, Bridge Financing, and Working Capital Solutions Siddharth brings up offline context regarding BlackSoil backing companies with short runway without co-investors. Ankur elaborates on their bridge and working capital differentiation.6:49–11:48 · Siddhartha as informed peer 4/10 Loan Pricing, Repayment Structures, and Relationship-Driven Debt Deployment The host inquires into pricing, loan tenors, and family office backing, accurately summarizing debt recycling cycles. Ankur outlines their return metrics and investor backing.11:49–15:32 · Siddhartha as informed peer 7/10 Investor Returns, Balance Sheet Leverage, and IRR Maximization Siddharth sharply challenges Ankur's return math, pointing out that targeting a 20% IRR seems contradictory when charging only 14-18% interest and accounting for defaults. Ankur clarifies how fees, equity warrants, and balance sheet leverage generate the target IRR.15:33–18:48 · Siddhartha as informed peer 4/10 Deconstructing Venture Debt: Collateral-Free Lending and Equity Warrants Siddharth asks Ankur to break down equity warrants and collateral terms for listeners. Ankur provides a clear educational overview of unsecured venture debt versus traditional bank debt.1:27–3:53 · Guest teaching 2/10 BlackSoil's Startup Portfolio and Permanent Capital NBFC Structure Siddharth asks straightforward foundational questions regarding portfolio companies, deployment figures, and BlackSoil's NBFC capital model. Ankur provides descriptive details without friction.3:54–6:49 · Guest teaching 3/10 Differentiated Lending Strategy, Bridge Financing, and Working Capital Solutions Siddharth brings up offline context regarding BlackSoil backing companies with short runway without co-investors. Ankur elaborates on their bridge and working capital differentiation.6:49–11:48 · Guest teaching 2/10 Loan Pricing, Repayment Structures, and Relationship-Driven Debt Deployment The host inquires into pricing, loan tenors, and family office backing, accurately summarizing debt recycling cycles. Ankur outlines their return metrics and investor backing.11:49–15:32 · Guest teaching 5/10 Investor Returns, Balance Sheet Leverage, and IRR Maximization Siddharth sharply challenges Ankur's return math, pointing out that targeting a 20% IRR seems contradictory when charging only 14-18% interest and accounting for defaults. Ankur clarifies how fees, equity warrants, and balance sheet leverage generate the target IRR.15:33–18:48 · Guest teaching 4/10 Deconstructing Venture Debt: Collateral-Free Lending and Equity Warrants Siddharth asks Ankur to break down equity warrants and collateral terms for listeners. Ankur provides a clear educational overview of unsecured venture debt versus traditional bank debt.1:27–3:53 · Guest disagreement 0/10 BlackSoil's Startup Portfolio and Permanent Capital NBFC Structure Siddharth asks straightforward foundational questions regarding portfolio companies, deployment figures, and BlackSoil's NBFC capital model. Ankur provides descriptive details without friction.3:54–6:49 · Guest disagreement 0/10 Differentiated Lending Strategy, Bridge Financing, and Working Capital Solutions Siddharth brings up offline context regarding BlackSoil backing companies with short runway without co-investors. Ankur elaborates on their bridge and working capital differentiation.6:49–11:48 · Guest disagreement 0/10 Loan Pricing, Repayment Structures, and Relationship-Driven Debt Deployment The host inquires into pricing, loan tenors, and family office backing, accurately summarizing debt recycling cycles. Ankur outlines their return metrics and investor backing.11:49–15:32 · Guest disagreement 1/10 Investor Returns, Balance Sheet Leverage, and IRR Maximization Siddharth sharply challenges Ankur's return math, pointing out that targeting a 20% IRR seems contradictory when charging only 14-18% interest and accounting for defaults. Ankur clarifies how fees, equity warrants, and balance sheet leverage generate the target IRR.15:33–18:48 · Guest disagreement 0/10 Deconstructing Venture Debt: Collateral-Free Lending and Equity Warrants Siddharth asks Ankur to break down equity warrants and collateral terms for listeners. Ankur provides a clear educational overview of unsecured venture debt versus traditional bank debt.1:27–3:53 · Siddhartha pushing back 0/10 BlackSoil's Startup Portfolio and Permanent Capital NBFC Structure Siddharth asks straightforward foundational questions regarding portfolio companies, deployment figures, and BlackSoil's NBFC capital model. Ankur provides descriptive details without friction.3:54–6:49 · Siddhartha pushing back 0/10 Differentiated Lending Strategy, Bridge Financing, and Working Capital Solutions Siddharth brings up offline context regarding BlackSoil backing companies with short runway without co-investors. Ankur elaborates on their bridge and working capital differentiation.6:49–11:48 · Siddhartha pushing back 0/10 Loan Pricing, Repayment Structures, and Relationship-Driven Debt Deployment The host inquires into pricing, loan tenors, and family office backing, accurately summarizing debt recycling cycles. Ankur outlines their return metrics and investor backing.11:49–15:32 · Siddhartha pushing back 6/10 Investor Returns, Balance Sheet Leverage, and IRR Maximization Siddharth sharply challenges Ankur's return math, pointing out that targeting a 20% IRR seems contradictory when charging only 14-18% interest and accounting for defaults. Ankur clarifies how fees, equity warrants, and balance sheet leverage generate the target IRR.15:33–18:48 · Siddhartha pushing back 0/10 Deconstructing Venture Debt: Collateral-Free Lending and Equity Warrants Siddharth asks Ankur to break down equity warrants and collateral terms for listeners. Ankur provides a clear educational overview of unsecured venture debt versus traditional bank debt.

speaking balance: gold is Siddhartha, purple is the guest (3 minute bins)

0:00 · Siddhartha 0% · guest 100%0:00 · Siddhartha 0% · guest 100%3:00 · Siddhartha 0% · guest 100%3:00 · Siddhartha 0% · guest 100%6:00 · Siddhartha 0% · guest 100%6:00 · Siddhartha 0% · guest 100%9:00 · Siddhartha 0% · guest 100%9:00 · Siddhartha 0% · guest 100%12:00 · Siddhartha 0% · guest 100%12:00 · Siddhartha 0% · guest 100%15:00 · Siddhartha 0% · guest 100%15:00 · Siddhartha 0% · guest 100%18:00 · Siddhartha 0% · guest 100%18:00 · Siddhartha 0% · guest 100%21:00 · Siddhartha 0% · guest 100%21:00 · Siddhartha 0% · guest 100%
Sharpest disagreement ▶ 13:35 Pushback on return modeling

While the conversation is generally cordial, this is the sole moment of tension where the guest must defend the viability of his fund's stated 20% IRR target against the host's mathematical critique.

 Hardest push from Siddhartha ▶ 13:35 Host questions IRR math

Siddharth directly challenges Ankur by highlighting that charging 14-18% interest while absorbing portfolio defaults cannot mathematically yield a 20% IRR without additional structural mechanics.

 Biggest teaching moment ▶ 14:00 Leverage and warrants bridge the IRR gap

Ankur educates the host on how NBFC balance sheet leverage at lower borrowing costs combined with upfront fees and equity warrants amplifies the net IRR beyond the nominal coupon rate.

 Siddhartha holds their own ▶ 13:35 Host catches interest-to-IRR discrepancy

Siddharth demonstrates sharp financial analysis by catching the quantitative mismatch between BlackSoil's lending coupon rates and their claimed target return for investors.
the scores for every segment, with the reasoning behind each
ChapterTopicSiddhartha as informed peerGuest teachingGuest disagreementSiddhartha pushing backWhy
BlackSoil's Startup Portfolio and Permanent Capital NBFC Structure 3200 Siddharth asks straightforward foundational questions regarding portfolio companies, deployment figures, and BlackSoil's NBFC capital model. Ankur provides descriptive details without friction.
Differentiated Lending Strategy, Bridge Financing, and Working Capital Solutions 4300 Siddharth brings up offline context regarding BlackSoil backing companies with short runway without co-investors. Ankur elaborates on their bridge and working capital differentiation.
Loan Pricing, Repayment Structures, and Relationship-Driven Debt Deployment 4200 The host inquires into pricing, loan tenors, and family office backing, accurately summarizing debt recycling cycles. Ankur outlines their return metrics and investor backing.
Investor Returns, Balance Sheet Leverage, and IRR Maximization 7516 Siddharth sharply challenges Ankur's return math, pointing out that targeting a 20% IRR seems contradictory when charging only 14-18% interest and accounting for defaults. Ankur clarifies how fees, equity warrants, and balance sheet leverage generate the target IRR.
Deconstructing Venture Debt: Collateral-Free Lending and Equity Warrants 4400 Siddharth asks Ankur to break down equity warrants and collateral terms for listeners. Ankur provides a clear educational overview of unsecured venture debt versus traditional bank debt.

Statements from this episode (14)

Assertion Supported
BlackSoil deployed over ₹460 crore across 45 startup deals by 2020
“We have done almost 45 deals more than 400 and sixty-odd crores we have deployed.”
Ankur Bansal Sep 20, 2020 ▶ 2:25
Disclosure
BlackSoil operates as an NBFC funded by permanent family office capital
“So, we are at NBFC, ah, unlike other venture debt funds, they have to raise money from multiple LPs and then return the capital at the end of the fund, which could be ranging from five, seven years to 10 years. We don't have that kind of, ah, sort of challenge…”
Ankur Bansal Sep 20, 2020 ▶ 2:43
Disclosure
BlackSoil's average venture debt ticket size is 10 to 15 crore rupees
“So we do as small as one crore and we have gone up to like even 30 crores. And then like, for example, for your rooms, you end up to 40 crores also but that was like one off, but generally for us average ticket size would be 10 to 15 crores.”
Ankur Bansal Sep 20, 2020 ▶ 3:39
Opinion
Co-investing venture debt alongside equity rounds is becoming crowded and competitive
“That space we feel is a little bit crowded and getting competitive.”
Ankur Bansal Sep 20, 2020 ▶ 4:21
Assertion Not checkable as stated
Startup fundraising cycles are lengthening, requiring founders to secure longer runways
“Fundraising in the last few years is taking only longer. It's not taking shorter, right? Unless there are some of the larger unicorn kind of companies different, but for some of the other, most of the largest startup companies, it's requires enough capital in …”
Ankur Bansal Sep 20, 2020 ▶ 4:49
Disclosure
Startups should fund assets with debt and marketing burn with equity
“We started positioning ourselves on that the dead side to become your working capital partner, and use the money for creation of assets, whether that is business assets, KPEC assets, or even your working capital, and you use your equity money for burn, and you…”
Ankur Bansal Sep 20, 2020 ▶ 5:57
Disclosure
BlackSoil's venture debt interest rates range between 14% and 18%
“Our interest rates range between, ah, 14 to 18%.”
Ankur Bansal Sep 20, 2020 ▶ 7:14
Disclosure
BlackSoil's average venture debt loan tenor ranges between 24 and 36 months
“Second is our loan tenor can range and we have done transactions as short as four months also, ah, at one off and we have done transaction as one off as five years also. But if you look at average tenor it will be between like 24 to 36 months.”
Ankur Bansal Sep 20, 2020 ▶ 7:20
Disclosure
BlackSoil gives startups a three to six-month principal repayment moratorium
“Generally it can range from a average duration of principle moratorium that we give is three to six months and post that on an EMI basis on a monthly basis we start getting a principle back.”
Ankur Bansal Sep 20, 2020 ▶ 7:45
Assertion Supported
BlackSoil disbursed ₹450 crore and recovered ₹250 crore in principal
“In venture debt space itself, though we have given four 50 crores to date, we have already got more than 250 crores already back. In terms of, you know, repayments on the principal side.”
Ankur Bansal Sep 20, 2020 ▶ 10:48
Insight
Venture debt transaction IRRs range from 16% to 21% plus warrants
“The IRR on those transactions is much higher because you also have fees etc on it and your principal also starts coming back. So the IRR can range from 16% to 21% plus in some cases you will get warrants.”
Ankur Bansal Sep 20, 2020 ▶ 14:00
Disclosure
BlackSoil's NBFC assets under management stand at 400 crore rupees
“Right now our book, our assets under management at our NBFC level is 400 crores. 202 150 crores is equity side, one 50 crores is on the debt side.”
Ankur Bansal Sep 20, 2020 ▶ 15:02
Disclosure
BlackSoil holds equity warrants in 15 to 20 of its portfolio companies
“Ah, I think around 15, 15 to 20 transactions.”
Ankur Bansal Sep 20, 2020 ▶ 18:34
Assertion Supported
Venture debt is 12-15% of US VC market versus 5-6% in India
“I think US it's already like a 12 to 15% of the VC market size. In India that will be like almost five to six percent only so we have a big headway on that side itself in terms of the expansion of the market”
Ankur Bansal Sep 20, 2020 ▶ 20:07
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