Is your belief in meritocracy the reason for your failure?
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As a pre-seed/seed stage startup investor, the most frequent gripe I hear from Indian founders is that they had a better product, competent team & better numbers, yet the investors funded their competitors. This makes them confused & dejected, and they lose faith in VCs & angels. A fair number of founders have remarked to me that “VCs are dumb”.

My honest answer to this is that the competition is simply selling a “better story”. But the founders are never satisfied with this response. And I believe the problem stems from a belief in pure meritocracy.

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Failure: Y Combinator
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To all those founders who haven’t received an interview call from YC today & are feeling rejected, don’t feel down & dejected. Thousands of founders have been in the same place as you, before they figured it out & made their venture into a big success. Some of the more successful founders in our portfolio have been there as well.

It reminds me of my own experience ~7 years ago, when we pitched the idea of Globevestor to YC. We sat in Paul’s living room, being interviewed by the trio of Paul, Jessica & Sam. You couldn’t get more YC than that! Our pitch was that the time for India was here & we were on a cusp of a big shift in early-stage ecosystem in India. But none of them even knew about Flipkart or Inmobi, the two unicorns we had then.

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News: Springboard raises $31M Series B
News: Springboard raises $31M Series B
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Springboard, one of our portfolio startups, today announced their $31M Series B funding led by Telstra. With this, Springboard has raised over $50 million till date.

Started in 2013 by our long-time friends, Parul Gupta and Gautam Tambay, Springboard is building a new-age university with a focus on upskilling professionals. It matches each student 1:1 with a personalized mentor, alongside a core curriculum and project work. They’ve witnessed 330% student enrollment growth from June 2019 to June 2020. It’s a rocket ship!

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News: Flintobox raises $7.2M pre-Series B round
News: Flintobox raises $7.2M pre-Series B round
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Flintobox, another portfolio firm of ours, today announced the closure of its $7.2M (INR 50 Cr) pre-Series B round led by Lightbox.

We first backed Flintobox by leading their pre-seed round when they were fresh out of the GSF accelerator. As users of their products, we had high conviction that this team would create a large company in the early learning space. Since then, we’ve led or participated in three of their funding rounds, while they’ve grown their top line 100x!

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Interview in Hinglish (Part 1 of 2)
Interview in Hinglish (Part 1 of 2)
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It was recently highlighted to me that seemingly all startup conferences/events in India happened in English. And that the content produced about startup ecosystem was also overwhelmingly in English & sometimes jargon-laden, which a few founders couldn’t comfortably grasp.

Honestly, I never thought that English as a medium would also become a barrier for founders, but it seems that as startups move to capture ‘Bharat’ and founders/angels come up all across India, we need more vernacular content on startup ecosystem. So as a first for me, here’s a small interview in Hinglish on some perspectives as an investor (Part 1 of 2). Hopefully, this is of help to some people out there.

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The non-VC funding path
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Several entrepreneurs in India I come across have an ambition to build steady-growth, profitable & fundamentally solid businesses. While they’re not fit for VC funding (size/speed expectation mismatch), debt availability is also low for them early on. And so their business suffers and such entrepreneurs feel orphaned by India’s investor ecosystem.

While royalty-based funding has been around globally it hasn’t surfaced in India yet. This YC demo day promised that the time for income share funding might have come in the US, but will take time before we see it here.

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What’s with this tranched investing?
What’s with this tranched investing?
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I had another call today where co-investors batted for tranched investment to ‘ensure financial discipline’ in startup founders. I am strongly opposed to it. Either you trust in founders and invest, or don’t. Put terms in agreement to ensure financial oversight.

Hate milestones based investing. Things go wrong all the time. Putting founders under added stress of uncertainty on funds is useless.

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How much runway should you build during a fundraise?
How much runway should you build during a fundraise?
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Early-stage startup founders must’ve often heard from investors/ advisors to build runway for at least 18 months when fundraising. Yet, quite a few founders plan for much less. “We will raise Series A in 9-12 months” is a risky strategy, usually driven by an attempt to limit dilution.

There is a simple reverse-calculation to justify a minimum 18 month runway.

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Dealing With Draconian Investors
Dealing With Draconian Investors
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In the past year at Globevestor, I have closely witnessed a few instances of startup fundraises where key investors behaved un-admirably, by failing to honor their commitment or trying to re-negotiate previously agreed terms of investment at the last minute.

Mostly this happened at the round closure stage, i.e. post term sheet/ due diligence & during paper-work/ money transfer, despite the investors being well aware of the limited runway & options available to the startup. At worst, they possibly happened specifically because of this knowledge!

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The Pitch Deck
The Pitch Deck
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Writing a pitch deck shouldn’t be very tough, yet many founders struggle with it. The confusion seems primarily on the level of detail required and structure of the deck. I hope this post is of some help.

To be sure, this is intended for early-stage startups targeting investors in India. In my experience, decks in the US are quite brief and are largely a peg for the investor-founder conversation.

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