The Exchanges

Q Tell us in a nutshell about the last seven years. What an upside or the downside have you seen as a early stage VC?

A I think all of it is upside. I don't think there is any downside here. Uh, you know, when we started, we used to get about 50 opportunities every quarter to look at. Today we get close to a thousand, you know. When we started, there were probably 120, 150 angel investors. At last count in India today, there were about 4000 angel investors. You know, we were, as I said, the third or the fourth fund in the country doing this. Today there are about, 40 of us who are actually doing pre-series A tech and tech investments. So, and, and we've seen how this entire journey has moved from the average age of the entrepreneur moving from 24, 25 to 31, 32 today, and exits have started to happen. Companies have started to scale. When we started, there were no unicorns. Today we have, you know, at last count about 10 or 12 of them in the country. So, you know, we've had a very, very close ringside view of how this entire ecosystem has evolved, and it's been a great journey. I think The government has done its bit as well in terms of, you know, the, uh, the kind of, uh, schemes they've launched, the kind of, you know, fund of fund structures they've launched, which has helped us, you know, raise more capital domestically. We've seen, uh, domestic risk capital come to, come to play. You know, a lot of, uh, a lot of early stage, uh, investment earlier used to be, uh, overseas capital. Uh, but to…

AI assessment note: “I think all of it is upside. I don't think there is any downside”

Q In terms of the age of your portfolio founders, what's the average age, and what would you advise on young aspiring entrepreneurs? What experience or what time to start this idea?

A Yeah, so the youngest is, I think, 26. And the oldest is 62. Yeah, so that's a fairly large spread, right? But the median age will be about 32, 34, 35, ok. Uh, and I, and I guess that's how we've seen the ecosystem also evolve, you know. And when we started in 2012, the average age was 2425 years. And today we see, you know, people in the mid-thirties to come and embrace entrepreneurship. Um, and, and we've seen, you know, that maturity come in, you know, that it's not easy to do business in India. It's, you know, these, these people have worked for six, eight years in the corporate world. They know what works, what doesn't work, you know, what kind of paperwork is required and compliances. So it's kind of, you know, in the overall ecosystem maturity, uh, you know, that has also played a very important role in terms of the fact that more senior, more seasoned people are now willing to take entrepreneurship. Uh, but I think, I think, you know, it will continue to be in that band, you know, between the, on an average between the late twenties to the mid thirties, where most of, you know, action is.

AI assessment note: “median age will be about 32, 34, 35”

Q And in terms of your daily routine, what are the habits or mindset which you attribute your success to in life?

A Oh, I am, so I am driven by my calendar. So if it is not on my calendar, it is not happening. You know, because, uh, my day starts at 10 in the morning, uh, you know, so, uh, I am a creature of habit. Uh, I leave home at nine, you know, take the metro, get to the office between nine, 55 and 10, start work at 10:30, calls start happening. Leave Kurgaon by four 35 if I, if I, if I don't have any meetings, and then come back to Delhi, ah, you know, go for a walk at City Ford, play some golf on the range, ah, go back home, have, spend time with children, ah, you know, and retire by 1011, 1130. So that's the routine that I follow five days a week. Ah, as I, as I said, I'm a creature of habit. I don't, I don't like stuff moving away from my comfort zone. So I, I have a very cluttered desk. Uh, my wife says I'm the dirtiest person around. Uh, but, but, but I like my, you know, uh, clutter, and I like the way I am, and therefore, uh, uh, in that sense, I think, uh, uh, I would, I would call myself a, uh, a fairly cluttered person when it comes to physical world, but a very, very clear person when it comes to a mental makeup. I guess that would kind of classify me whatever it will be.

AI assessment note: “I am driven by my calendar. So if it is not on my calendar, it is not happening.”

Q So, uh, message to all the B to B entrepreneurs, which segments in B to B are you currently looking at in which the founders with the post revenue should look up to you?

A We are looking at everything that is B to B, you know, whether it is, uh, you know, so we are not sector, uh, specific, so we are looking at health tech, edu tech, fintech, everything which has a B to B element around it. Uh, you know, so, uh, enterprise SaaS, PaaS, AI, ML, Hardware. All these are sweet spots for us. So if there is anybody out there who's working on a, you know, in, in the, in the spaces that I kind of articulated, which is post revenue and kind of fits in the criteria, please feel free to write into us. It is our commitment that if you write into us, we will write back to you.

AI assessment note: “We are looking at everything that is B to B, you know... we are not sector specific”

Q But what do you think, uh, in terms of what has given confidence to these LPs? Though there have been a very few flipkarts from India as compared to developed ecosystem like US and China. Why are these investors, LPs bullish?

A I think investors are essentially in the business of making money, right? Uh, and making money is also a diversification, asset diversification or portfolio allocation strategy. Uh, you know, a lot of investors are already, you know, fully invested in PMSs and mutual funds and stocks and property and, you know, commodities and what you have. Um, very little, very few people have exposure to, uh, an unlisted asset class, you know, and I guess that's where the opportunity is, uh, and, and because, uh, there are, you know, as I said, 3004 thousand angel investors in the country, it becomes a very interesting place to be in as an investor, because you are today Taking a position through a fund in opportunities which can truly become large, you know. Sometimes it is also aspirational, you know, they have seen, you know, people talk about how they invested in Uber and in Airbnb and in Flipkart and in Paytm, you know, and some of these guys also want to have that, have those bragging rights as I call them, but that is few and far between. I think today this is a viable asset class from a allocation strategy perspective. And I think that's what, uh, investors should look at. And, and it is a risky asset class. It is an illiquid asset class. And therefore, you know, our, uh, recommendation is that not more than five, 10% of our investable surplus should come in here. This is not an asse…

AI assessment note: “making money is also a diversification, asset diversification or portfolio allocation strategy”

Q Who have been your mentors in life, and how much success of yours have you attributed to your mentors?

A I think that's, that's a place where I'm kind of like, ok, ah, I actually, ah, don't have any mentors, ok, I look up to a few people, ah, who are my sounding boards, ah, but I will not call them mentors, ok, ah, these are people, some of them are my peers, some of them are younger to me, some of them are older to me, this is like the, ah, you know, ah, My go-to guys who would, who I go for, you know, personal, professional advice, but there is no formal mentoring structure that I have gone through. In fact, I have been pushing Sanjay to start mentoring me as well. We haven't gotten there yet, but I'm sure we will.

AI assessment note: “I actually, ah, don't have any mentors, ok, I look up to a few”

Q In, in terms of your co-investors, Which co-investors you gel very well with?

A Yeah, so we work with everybody, you know, so out of the 20 investments that we've done, 17 have been co-investments, you know, so whether it is Indian Angel Network, Mumbai Angel Network, whether it is IDG, Kalari, you know, we've co-invested with a lot of people. Um, and I think it is not about gelling or not gelling. I think, uh, it's a very small ecosystem. You bump into, You know, each one of them once every couple of months, you know, in events, in, in, you know, workshops, et cetera. Um, and, um, you know, they're, especially because we are in a supply constrained economy, uh, in a buyer's market. The entrepreneur actually doesn't care who he writes to. So in that sense, our feeling is that proprietary deal flow is not a very large chunk in this country, which means everybody gets to see everything. And, and in that kind of a scenario, it just becomes easier to work with people.

AI assessment note: “we work with everybody... whether it is Indian Angel Network, Mumbai Angel Network, IDG, Kalari”

Q So, in terms of advice to young people or entrepreneurs for wealth generations, what have been your personal experiences with the right decisions, which made you a good amount of wealth, or what would you advise them?

A So, I think, I think people realize that income minus expenses saving. I think that's a wrong paradigm. I think income minus saving is expenses. You know, I think that's the only way to build a sustainable corpus, uh, for your, for you and for your family. You know, I've seen a lot of people, uh, early enough in their lives, you know, waste, not waste, but you know, not save enough. And that has never kind of helped them in later stages of life. So I think as, uh, young, uh, entrepreneurs, you know, employees, I think you should definitely set a savings target for yourself, and, and spend only after you have saved, not save after you have spent. I think, I think that's the mantra of having a Peaceful, uh, and, uh, safe and comfortable life. You know, we are, uh, life cycles are changing. You know, we are, um, our parents, uh, could expect to live 70. Our grandparents could expect to live 60. We can easily expect to live 80, 90. So therefore, you have to save. And you as your working life will end at 60, 65 if you're an employee. If you're an entrepreneur, you might run a few years here and there. But, uh, if you don't save enough, uh, then you are. You are in for troubled times. We don't have any social security in this country, and therefore you have to fend for yourself. So, income minus saving is expense, and not the other way around.

AI assessment note: “I think income minus saving is expenses. You know, I think that's the only way”

Q You mentioned highly of your partners, both Sunil and Sanjay. What have you learned from them in the last seven years?

A Oh, I've learned a lot from both of them, you know, uh, from, uh, from Sanjay, I have learned, uh, you know, what, uh, an eye for detail is, and, and how does that impact success or failure? Uh, from Sunil, I've learned, uh, You know, uh, stuff that, even as a Cindy, I couldn't think of, you know, on the, on the structuring side, on the valuation side, et cetera. I think both of them are very, very brilliant people. You know, from Satish, we've learned how, how deep tech evaluations are done, and what do you need to look at when you look at deep tech opportunities. You know, from Vivek, you know, the perspective that he brings, because he's sold to hardware companies, worked in the Valley, Um, and scaled up very, very well, uh, in those opportunities. You know, everybody has something to give. I hope they've learned something from me as well. Uh, but, uh, I picked up a lot. And I think, I think the beauty of being where I am is that we have an inside view of how technology is evolving and, uh, will change, uh, the ecosystem in the coming quarters and years. I, that's, uh, Huge, uh, kick in itself. Um, and, and I think it's been a great seven years that we've been doing this, and hopefully it will be, the next seven will be more exciting as well.

AI assessment note: “from Sanjay, I have learned... what an eye for detail is... from Sunil... structuring”

Q Um, what markets didn't work out for you in which you invested?

A So, um, so we invested in a couple of consumer place. Uh, one or two of them didn't work out for us. Uh, uh, you know, uh, one of the first investments we did was in, uh, in the out of home analytics space. Uh, you know, we were very gungu about it, uh, in terms of what they, what, uh, you know, uh, they were trying to solve as a problem in terms of, Uh, complete opacity on the pricing of the, of the out of home assets and the analytics around it. You know, so that didn't work out very well for us. We invested in a, in a video, uh, uh, health tech company, uh, which was, uh, using a very, very advanced two point, uh, video technology technology to deliver video consults, uh, to the last mic. Uh, that kind of did not work for us. Uh, but, uh, besides that, I think, you know, we were very, very lucky to have a very interesting portfolio that we kind of started to build out from day one. Um, and as I said, our thesis was to basically build a concentrated portfolio. We wanted to do 15 to 18 in the first fund. We ended up with about 16. Uh, as I said, about 70% of the portfolio is up and about. Multiple rounds have happened. Uh, so I don't think besides that, Anything else that didn't work. The fundraising cycle for us was very long. You know, it took us three and a half years to reach the first one. Uh, uh, so that we think was also something that we could have managed more effecti…

AI assessment note: “one of the first investments we did was in, uh, in the out of home analytics space.”

Q Which are the funds in India you look up to in terms of learning, in terms of the portfolio that they have, you aspire to have?

A Uh, yeah, so I think, you know, so there are, uh, so there are today about 35 or 40 of in the early stage space, but most of us are doing stuff in the similar space, you know, uh, I don't think, uh, that's the right place to look at. So I would actually look at a stage higher than us and, and see how many of our companies can go to that stage. So at that stage, I think, uh, Saif is doing some very interesting stuff, uh, Excel is doing some very interesting stuff. Ah, they also do early stage, but they also do large, ah, you know, ah, they come in at a stage which is higher than us. Ah, IDG, Sudhir is a great team, and they are doing something very interesting. So those are the two, three that one would look up to from, from a scale-up perspective, you know, um, and I think that's where, uh, that's where, and there's a lot of learning out there in terms of, you know, what they do, how they do, the processes they follow. Some of them are large international funds as well, right? And therefore, uh, you know, we, uh, you know, we always look up to see how we can improve our reporting, our, you know, internal controls, et cetera, and learn from them. So I think those would be the couple that would come to mind.

AI assessment note: “Saif is doing some very interesting stuff, uh, Excel is doing some very interesting stuff”

Q What, what are some of the moments in life when you felt lost, and what helped you recover from it?

A That's a, that's a tricky one. I think I won't call it lost. Um, you know, as I said, I'm, you know, I've, I've been, uh, very, very clear in my mind what I wanted to do. Okay. So when I was in class 10th, I was clear I wanted to go out and do something in computer science. And this was a time when in 1986, there were actually very few computers. So I remember, you know, I used to live in Kalkaji and there used to be a computer center in Plagati Medan which had opened up And I used to take a bus three days a week to get there to study, uh, you know, basic, and at that time, Turbo C, you know. Uh, uh, so with the, so, so I had absolute clarity that computers was the way to do. And then when I got into Stevens to do my computer science, uh, so I'm, and therefore I was also clear in my mind that I didn't want to do, I wanted to do an MBA, and therefore I didn't want to do engineering and waste one year. So I went in and went and joined basic computer science, uh, in Stephens. We were probably the second batch of computer science graduates, the password from Stephens, you know, that those were the times when, you know, you used to have cathode ray, green monitors, you too, you won't have seen them either. Okay. You used to switch it on, go have a coffee and you would see a green dot blipping on the screen when you came back. You know, we used to have five and a quarter inch floppy …

AI assessment note: “I think I won't call it lost. I've been very, very clear in my mind”

Q So do you feel that there's a bubble about to come in the next two to three years or you are confident that there will be an upward rise in the market?

A I think the, I think the bubble has already come and gone. Uh, I think today from a valuation expectation perspective, we are nearly close to the bottom, if not at the bottom. Uh, I think things can, if, if the political scenario kind of stabilizes, uh, you know, things will only, should only improve from here. Uh, but you, you know, some of these asset classes are, you know, not deep enough, uh, for you to figure out whether it is a bubble or not in the first place. So I guess that's kind of for us to figure out, uh, but we think there is, uh, we, we think the froth is off the table, and valuations today are fairly realistic. Uh, whether they will go into bubble territory two, three years down the line. I'm sure maybe, I'm sure they will go there sometime. Whether it will be two, three years, I don't know. But the cyclicity, you can't discount cyclicity in the business model.

AI assessment note: “I think the bubble has already come and gone.”

Q So, uh, these seven years, which you say have been a lot of learning for you personally, do you regret not being an investor earlier?

A In Hindi, I say that before the first question, I don't know anything about it. Well, I guess it was, as I said, it was serendipity. I never, it was not by design that I'm here. Uh, and, uh, but now, but, but, you know, the seven years that I've seen, uh, it's been a really exciting journey. I'm not sure whether I was ready even before that to do this. You know, it requires a certain amount of maturity, a certain amount of, you know, capital to do this on your own. Uh, you know, we didn't come from, we came, all of us came from middle class backgrounds. You know, uh, we were all, we were, all of us worked for 1520 years in the corporate world. You know, so, I guess it was more to do with luck and timing. Uh, but, uh, would I have been ready to do it before that? I'm not too sure.

AI assessment note: “I'm not sure whether I was ready even before that to do this.”