Opinion
Bhagia: Y Combinator is the only VC brand that outlived its founders
“I think everybody else, the, how much of an institution you build, if the people change the funds ranking changes. Like Kleiner Perkins used to be one of the top funds. They then went down, right? That cycle keeps repeating in the Valley as well by sees the on…”
Prediction Not checkable as stated
India could have 1,000 tech unicorns by 2035
“It's like today we have what? 40, 45 unicorns in India, right? It's possible that by 2035, we may have a thousand unicorns.”
Insight
Bhagia: Valuation and dilution are founders' top priority over investor brand
“The number one thing for founders, right? No matter what your brand is, how much value you have, whatever you do, the valuation matters, what price you're giving them money at, how much ownership you're taking. That is the first priority for them. Everything e…”
Opinion
Bhagia: Most Indian VCs ghost founders after pitch meetings
“Most we see in India still don't honestly close the loop with a founder. There's still a lot of ghosting and just like somebody comes and pours their life's dream out to you and you just don't reply after that.”
Assertion Not checkable as stated
Bhagia: Meesho successfully took on e-commerce giants Amazon and Flipkart
“Vidit had once told, like before they went up competing against Flipkart and Amazon yet told me I'm going to do it. I was just like, this guy is crazy, man. Like was at that time, Amazon Flipkart were like these giants, right? Like you couldn't imagine that th…”
Disclosure
First Cheque invests almost blindly if a venture partner vouches for founders
“If the deal has come through a venture partner, and if the venture partner knows the founder, right, and is watching for the founder, then we will almost blindly invest. Then it doesn't even, like, as long as it's a VC fundable space, we'll go ahead and invest…”
Disclosure
First Cheque will invest in competing startups if venture partners vouch
“If a venture partner knows the founder, then we'll still do the deal, even if it's a competing company, because as I said, we are investing at pre-seed, right? So the market and team is what is important to us, not the current product.”
Insight
Bhagia: Half of VC is sales to founders and LPs
“We see, I think I feel half of it is a sales job. You're selling yourself to the founder when you're selling yourself to LPs that's a large part of your job.”
Assertion Partly supported
Bhagia: Y Combinator funded 60 Indian startups in 2021 before pulling back
“So they did 60 from India in one year, 20, 21. After that, they've fallen off at least India. They're not doing as much.”
Insight
Bhagia: Mega-fund strategy inherently degenerates into a capital deployment problem
“I think one big disadvantage for the larger funds also that the bigger you become, right? Your fund strategy becomes a deployment problem. Cause how many, if you run a fine and million dollar fund. Even if I give somebody five million dollars, it's like one pe…”
Disclosure
Bhagia: Passed on Zepto co-founder Adit Palicha's early Kirana Kart pitch
“Adit came to me also back then, right? He said, I'm in Stanford. I'm, if you give me money, I'll quit. I said, like, I've just not heard of it's like, show me something at least. And that time he was doing the Kirana card model. So it's just very hard to back …”
Opinion
Bhagia: Indian VC deal paperwork takes two to six months to close
“The paperwork also in India is insane. Us sold it many years back and like here, which we take anywhere from two to six months to just close the deal. And most VCs don't think of it as their job. They just hand it off to the legal thing. This guy will do it. A…”
Assertion Not checkable as stated
Pedigreed Indian founders raised 2021 seed rounds at $10M to $20M valuations
“Ah, but even then, what we see is that, like, a VC round, VC seed round is typically happening at, say, A one and a half to three million dollar raise was happening at a 10 to fifteen million, sometimes twenty million valuation. But people who only have this p…”
Disclosure
First Cheque caps pre-product, first-time founder valuations at $2M to $3M
“Category A is first time founders. Younger folks, you know, free product deals where the risk is significantly higher. Those deals we don't do beyond two, three million evaluation. Three is also a bit on the higher side. Usually it's around two million.”
Insight
Most pre-seed startup teams pivot away from their initial product idea
“Because most pre-seed investments, the team pivots after a while, they'll, you know, find adjacent ideas. They'll, they'll, they won't even be doing what you thought they'll be doing when you invest.”
Insight
Venture capital is not a winner-take-all business due to power laws
“See, it's hard, ironically, VC itself is not a winner-take-all business, right, like, You will see funds at every stage and every sector succeed. Because finally the power law game means that, you know, even if one of your companies really, really works, you w…”
Assertion Not checkable as stated
Almost all unicorns in India, China, and the US had founder angels
“And if you look at unicorns in India, in China, in US, right, almost all of them you will see have raised their first round or raised some money from founder angels in their early round.”
Assertion Supported
Traditional VC partners do at most three to five deals per year
“Most partners at Atta Sequoia, IQ, Accel, etc. Will do, right? Because they build deep conviction, they spend a lot of time with their companies, and after investing also, they'll take a board seat they'll talk to their companies once in two weeks at least, an…”
Assertion Partly supported
Kushal Bhagia: Elevation's Mukul Arora is on 7-10 unicorn boards
“I think Mukul's track record even there is exceptionally good. I think he's on the board of some seven or 10 unicorns, first cry, swiggy an academy on this, the whole list of them”
Assertion Supported
Powai Lake Ventures backed Ola, Housing.com, Toppr, and Fynd
“Gagan there used to run Pawai Lake Ventures, which was like this, you know, network of founder angels from IIT Bombay who were reinvesting in founders that graduated from IIT Bombay. And that really worked. They ended up backing, you know, Ola, Housing, Topper…”
Disclosure
First Cheque launched in 2019 to co-invest alongside founder angels
“We decided, okay, let's, let's, you know, try and set up a fund which basically backs founder angels and then let those founder angels pick companies for the fund, and the fund will basically just invest with them wherever they do. So that is how India, that i…”
Disclosure
First Cheque backed almost 100 companies through its first fund
“We've backed almost a hundred companies now through the first fund.”
Disclosure
Almost half of First Cheque's first 100 investments raised follow-on funding
“If you look at the first score, the first 32 deals we did out of those 20 21 have raised follow on rounds now. If you look at our second cohort, which is the next sort of 3035 deals we did out of those 12 13 I've raised follow on rounds and out of the last coh…”
Disclosure
Over half of First Cheque deals are pre-product and pre-revenue
“Like at least half of them are pre-product. And almost all are pre-revenue.”
