The Exchanges

Q Uh, Amit, so I would love to know from you, you know, so this episode is a special one because we are both co-host and co-guest in this conversation. I would love to know from you, you know, why did you start Prime Venture Podcast and what, what is required to make a successful podcast?

A Yes, you know, so we started it with a very simple kind of intent of saying this is our way to sort of, you know, give back to the community. And we have access to a lot of great people, right? Entrepreneurs, VCs, you know, influencers, people that have been there, done that. Wouldn't it be great if we could find and share their learnings with the entrepreneurial ecosystem in India and beyond? That was kind of the singular motivation. You, of course, helped us along in the journey. This is our second attempt at the podcast. We also started early in 2015, 20 16. And we had a very, very interesting guest back then as well. You know, Nandan Milikani, But you helped us kind of restart the podcast when you worked with us for, for your brief stint. And what we learned is it is almost like doing a product, like in product management. There's a lot that goes into the podcast. It's not just like you said, audio recording shared on a G drive or LinkedIn. It's about the, you know, the cadence of the podcast, right? The consistency of the podcast. It's about the construction of the episode in terms of You know, do you, you know, do you have a false start? Do you have an audiogram that talks about the highlights of the podcast, right? Uh, it's about distribution. So it's a lot of work, uh, and, and you got us started. And then of course, uh, our colleague, uh, you know, Shikhar Prateek has …

AI assessment note: “we started it with a very simple kind of intent of saying this is our way to sort of, you know, give back”

Q to thank the sponsors prime venture partners. Prime is the first institutional investor in category creating tech startups, like my gate, Neo, Dozie, Planet Spark. Prime is now investing out of its fourth fund, which is more than a hundred million dollars. Today I have with me Amir Swamani, managing partner, prime ventures. Amir would like to know How you evaluate founders and what are the different evaluation criteria like?

A Siddharth, you know, so at Prime we look for what we call category creating or category defining startups. So we're really looking for in what way is a startup 10 X better, a thousand percent better than the current state of the art. It could be product, it could be technology, it could be go to market, it could be a business model, whatever. So that is one core criteria. As for the founders themselves, we're really looking for founders that have very high learning agility or a very high learning quotient. You know, why that is important Siddharth is as you're going through your seed to pre-series A to series A and sort of journey to build your company, to get product market fit, to accelerate it, you have to make a lot of trade-offs and a lot of decisions. So we're really looking for founders that have very high learning agility.

AI assessment note: “we're really looking for founders that have very high learning agility”

Q And is the revenue compulsory for you that the company should have a path to revenue within six months of your investment or so?

A Revenue is not. However, a business model is. I always tell entrepreneurs that you should, any investor you're talking to, you should always ask them what risks are they comfortable taking? The best investors will tell you. So we rarely take a business model risk, right? We always have some line of sight to what the business could be. Can this be a viable business? Can there be Some monetization potential in what way and what is the proxy or the validation of that thesis, right? Um, but having revenue on day zero when you're pitching us or investing or we are, we are to invest, that is not necessary. Often not even necessarily a timeframe, although in many of the kinds of businesses that we do SaaS, FinTech, et cetera, there's often some revenue. It's usually modest, uh, but there is some revenue.

AI assessment note: “Revenue is not. However, a business model is.”

Q What three mistakes do founders make while pitching to you? And what can you suggest them to make in their pitch, which can, you know, help them increase their chances of conversion or conversations with investors?

A Right. Um, so I think one of the biggest thing is really figuring out, uh, what is the purpose of that specific pitch? If you and I are meeting for 10 minutes at the bylines of a conference, you pitching me 18 features about your product and blah, blah, blah, and like the, you know, undergraduate school you went to or whatever is not really going to help. Right now you're just trying to put the hook to say you're doing something interesting that might add, you know, some value or fit in your mindset or might surprise you, right? Those are also very good pitches. So having a very sharp elevator pitch, because oftentimes you do end up meeting people in, in various events and so forth. Um, if it's a full formal pitch, I would really say just cutting through the chase, right? Like everybody will always say it's a hundred billion dollar market. It's a trillion dollar market. This is like the best thing since sliced bread. You know, I'm like very simply if it's early stage, like Who's the customer? What's the problem? What's the insight? How did you get an insight into that problem? How did the co-founders meet? Just the very basics, right? Of customer, problem, market, why this is the best team to solve that problem is often a great pitch, right? Rather than a, and of course we will get to the spreadsheets and the billion dollar and the ten billion dollar and all that, but that's us…

AI assessment note: “one of the biggest thing is really figuring out, uh, what is the purpose”

Q And Amit, ah, you are one of the very few VCs. That, you know, before becoming a VC, took a company public, right? So what, what has changed since Make My Trip IPO? Can you describe that process? What was the friendly back then? And why was Make My Trip back then listed on NASDAQ and not in India?

A Yeah. Thanks Adap for having all of us here. So I want to go back to your India macro question for a moment and then I'll talk about the Make My Trip IPO and so forth. So I think the first trillion dollars of India is GDP. Happened in about, uh, you know, 50, 55 years, right? Maybe 60. The next trillion dollars of increase in GDP happened in about 15 years. The last trillion dollars happened in five years, right? So back to Sanjay's point about so much has changed and not just on, you know, India stack, digital India, you know, Jan Dhan, Aadhaar, et cetera, but actual growth. I mean, real growth, real consumption, et cetera, right? So I think it's phenomenal what has happened from our early journey in Um, in terms of MakeMyTrip, actually, very interestingly, the first discussion that happened in the boardroom, ah, in early 2010 on where the company should list, right, closed room discussion, Almost unanimously, it was a pretty large board, and then there was the three founders and a couple of us on the management team that were there. Um, it was like a nine is to one, like you have to list for NASDAQ. There was nothing else. Nobody in India understands, you know, uh, this market. Uh, we were just barely profit making. It was about sixty million in revenue, real revenue. At that time there was no ARR, there was no GMB. We wish we knew GMB. Maybe the company would have been liste…

AI assessment note: “Almost unanimously... it was like a nine is to one, like you have to list for NASDAQ.”

Q And the other thing is, right, uh, you are raising fund five at prime, right? Tell us more about that and our global LP is thinking about it when you're in your interactions, about the India opportunity in general, and what are the questions that they are still posing?

A Sure. So I think the, uh, Kind of inbound interest into India is probably at an all-time high. Even for Prime, you know, we've had more LP interest in the last year than perhaps the last three, four years combined, right? And, and very high quality people globally, not just the US, which of course is a big, uh, kind of LP base into India, but US, Middle East, Asia, et cetera. Lot, lot of, lot of interest. Uh, so I think we're past the like, why am I in India? And like, how do you bat the elephant and all that stuff, right? Like that's all, all done, right? Um, I think the questions, and now, you know, there's always this question of exits, which we've covered a lot today on the show here. So we won't go into that. And so the people are beginning to see exits, at least at a company level. They'll be like, well, even if you exit with an IPO, will it sustain its value? Okay, so that's taken care of. Will Indian companies acquire? Well, that's kind of beginning to be taken care of. Will it only be US acquirers? No, no, that's taken care of, et cetera. Do these founders have global ambition? Well, you've seen so many global companies go out from here, right? Uh, and so on. So I think now the question.

AI assessment note: “we've had more LP interest in the last year than perhaps the last three, four years”