Top VC: One Trait That Separates Billionaire Founders From The Rest | Sasha | FO564 Raj Shamani

If I put you in a room with 10. entrepreneurs, one of them in next. decade will become a billionaire. The. other nine won't. [music] What are the. other nine people are doing wrong versus. one who did right? A lot of people are. starting companies because it's sexy, opportunistic, but not really for the. right reasons. So the main reason a. really good company is created is is. there a pain point to solve that the. founder personally had for someone close. to them. So those founders are the best. of best because you have a clear. purpose. These founders and founding. teams we believe outperform the let's. say opportunistic founders 9 is to1.

[music]. >> Sasha Mi Chundani founder and managing. partner at K Capital and co-founder of. Mumbai Angels. If you want to understand. what a top investor really bets on and. how great companies are actually built, this episode is for you. [music]. Tell me who are the top three or four. people you need in a founding team and. what kind of skills they should have so. that people can build their ideal. founding team. You need someone who can. sell. Entrepreneurship is selling. There is no business then someone who. can actually build the product. Can. someone be a great salesperson who or.

she's not only selling the company but. raising capital getting in front of. people like me? >> So you need a seller and a builder. Yeah. >> You [music] said founder is everything. How do you identify right founder? >> One raj is personality traits. This. founder or founding team are they. entrepreneurs that are hell or high. water but look no matter what they will. [music] figure it out. No excuse. And. what are the other traits? Trait of. success Raj is are you a conscientious. person you say what you do you'll do it. which is very important talk is cheap.

but are you really doing it. give me a step-by-step formula to make. [music] the best pitch deck and the. easiest pitch deck will give you high. conversion if I had to see 100 pitches. 90 will be cluttered entrepreneur more. data so the more excitement comes. actually I want clarity of thought. simplicity that is what works. >> how many slides Maximum 10 slides. What. should be the first slide? >> I like the team in the front. >> Okay. Problem about solution and then. why now? About one slide on product. If. you can show us how it works on a video.

about traction, competition slide, one. slide on how much money you want to. raise. That's it. >> Who is the most competitive founder. you've met? What he has done? People. forget that when to only couple of. thousand crani. last year. [music] remarkable. If I give you 100 crores today and I. show you five sectors, how much money. will you put where? We'll give you chips. and you put the poker chips on five.

sectors which are hot and booming in the. VC world right now. >> Okay. So, these are the only options I. have. >> These are the only options you have. >> So, 50%. What is a personal problem that you're. going through today for which you'll pay. someone if they solve that problem for. you? >> I have a small favor to ask you. I need. you to subscribe to our channel. The.

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Why do you think you're loved? Because I. I had firsthand experience. I don't I. don't have to talk about myself loved or. not loved. I think we we want to be. genuine people like genuinely have the. entrepreneur tough time. but at the end of the day have the best. interest of the founder also in place. not just our best interest and be. patient and see we've been entrepreneurs. ourselves so we've seen tough times. straight line life how can we help the. entrepreneur through the tough times to.

come to where they are. >> true. is it true like your own story starts. with you were not able to raise funds. and that's why you started a capital My. story is very different. So I had actually. I joined my father's business. >> So my father is founder and of a company. called Onidita. [clears throat]. >> So when I joined the company was at his. absolute peak.

>> It was doing phenomenally well. And u I. thought within 6 months director and. then MD and guess what I became a. director of Onidita last year maths 1995. I joined [laughter]. 2025 career. >> Yeah you see the public records 20 years. you became director. Yeah my father in. your own father's company. >> Yes. So my father that was the biggest. reason for wherever I reach today. because my father said no entitlement.

boss. you must do it yourself. So day one say. first thing he said was. I said in your car he said no no you. must take the train. out of India for so many years. So I've been out of India and living in. a parallel universe and station till. today I can remember that thing. I was. like what.

like there's thousands of people and so. because I was just like paranoid. >> not paranoid but I was like in shock. 2 hours to reach Malar Hill madness. Next day again I went my brother. So my. brother said, "Dude, you have to do. this. You can't waste my time. I'm not. coming to taxi with you again." In fact, sorry. >> So I said, "You know, life, what is my. what is my ethos? You have to jump into.

it. You cannot be sitting on the. sidelines.". >> Somehow I managed to get in train. So. entit. But no one told me that the huge crowd. will come running in. [laughter]. and my back smashed. I think back. [laughter].

smashed my back. I was like damn what is. this welcome to Mumbai moment. >> you know and then of course the very. next day I went and then I became an. expert of trains no problem and my dad. said only second class no first class. train. >> second class up and down circles they. south Bombay kids they would tell me. sasha so how many bathrooms does the. train have I said boss you can't stand. which world are you living in but that. really toughened me up and then my.

father said area sales manager I. remember First day. come. of course. I said amazing joback. same thing one week later I went back to. the same shop.

So that was the reality that. okay. >> and I realized how hard it is to sell. even one television. >> you know without the support of having. been gurumani son where the average. employee in my company young executive. join and we were at our peak number one. brand in India but TV because so. competitive you got to find a reason to. sell that television. And so.

then my father said you must get more. experience. So then Mangalore Mangalore. branch. >> So Mangalore I've never been to a small. city in India hotel five times a day. >> True. >> But all these experiences really taught. me only one thing is appreciate what. people have to go through at the bottom. to go to the top. >> But why would you were born in privilege. right? You were born in a very rich. family in in Malabar Hill. You went to.

states, boarding school, all of that. So. why does your father want all of a. sudden for you to leave that privilege. and start from scratch? >> Because I think he wanted to I I never. asked him this question actually, but I. think my guess is that he wanted to. uh not have entitled children and he. came through the struggle. See when he. graduated from Bits Pilani. >> there was a very tough time. It was 60s. Everybody from his class 90% of them. maybe more than 90 US guy. someone got a job in Tata someone got.

billas and he was he he was the only. entrepreneur from that class. from what I remember. >> right and then obviously subsequently. more entrepreneurs came out and those. time raising capital doing what he had. to do it's a story by itself and then so. this was on days and then. um. late 99 2000 may I was attending a talk. um I think it was a YPO talk so I won't. talk about who the person is private.

talk very u very famous industrialist. was speaking and he spoke about how we. move from textiles to pharmaceuticals. and the reason was simple okay move to a. better industry. >> so I just thought about I said you know. what we are in electronics as a family. but it's a very hard industry low margin. tough to build real value only very few. companies at that time Sony and now of. course subsequently Apple have built. multi- trillion multi-billion dollar. businesses at least Apple now of course.

is multi- trillion so I said what else. can I do so I just kept it parked in my. head this thought and then thought. and then one day another thought came to. my head my father gradu from Bits Bilani. when he when he started his first. company it was so hard to raise capital. second company so hard to raise capital. finally chall. damn hard to raise capital but that was. in the late '7s early 80s. Now fast. forward to 20 25 years later situation. same.

awesome access to capital but endorse. why not him maybe Raj is much smarter. than me so why can't he get the capital. so now I'm not some Gandhi but I just. felt that that's not fair. >> was thought. okay what about you know getting into a. new industry so time 99 2000 VC industry. barely existed in India so there was no. VC concept concept never mind But. concepts are can we help entrepreneurs. and at the same time get into a new. industry? So I went to my dad I said dad.

how about we do this and being an. entrepreneur he thought very good idea I. said kiran. kiran chandra he was I am kolka. become my very good friend till today. you're very smart I want you to do one. favor for me any awesome entrepreneur. you find I please tell me I would love. to meet them and this is what I want to. do he was also confused I said. so he started making me meet. entrepreneurs so finally When I met this.

one team, [clears throat]. >> I immediately liked them. I said, "Wow, what a great team." And they had not. come for funding. They were also. confused. >> And they were a comparison website. comparing products. So they motive to. come was Sasha can you give us some TVs. We like to compare them and put it on. our website saying this TV is better. than that and this this this and Raj can. buy it or not buy it. And. [laughter] so anyway, maybe then a few months later they came.

back. >> and they said you know what remember we. talked about raising capital if [snorts]. you're interested we can do it. >> so I thought why not you know uh let's. talk so to cut a long story short a um. and uh I really like them showed it to. my father he was a little bit confused. at that point and he said you know not. sure but um we had people uh on our. board uh who my father respected a. And I spoke to one of those gentlemen.

and he said okay I would consider doing. it and that time my dad said okay I. think it's a good idea let's just do it. >> So this became my first investment we. invested from the onita balance sheet. >> deal. Now within 3 months my father put. a new board of directors. >> in the company and many very prominent. people like Mr. Harsh Mari of Americ. said they this is a software company. Uh. we had pivoted and I'll explain that. story also why is a listed TV company. investing in software and I had no.

rational reason. So that's when I went. and bought the shares out of the company. and that's my first investment. That. company uh 25 years later became Fractal. Analytics. >> I know. >> So it was a great journey. It still is. I'm still on the board and Shikant and. Bunny have done an incredible job. Uh it. started as voodoo.com and became fractal. analytics. >> So so why did you invest in voodoo.com? >> Just the founders. I did a lot of. diligence on them. Uh a lot of diligence. investment but at the end root cause of.

any investment is founders. and then over the years. but initial check. >> and like this is this is a theme in. across all your most of your companies. right. as an as an investor, you've invested in. a lot of companies. There have been. great outcomes as well. But look at. fractal [snorts] analytics, right? Porter.

death. So multiple times this is the. theme. Why? Because. uh clear. uh insight that you know company's all. about the entrepreneurs and the best. founders will figure it out. [snorts]. You start obviously in a dream world. market. >> but most often things change when you.

hit the ground running right and realize. oh god your market actually was not what. I thought. So can we move fast enough? Can we think quick enough to move and do. things that are different in some cases. in Fractal's case? So when we decided that that was not. going anywhere but by then I already. started to like the founders a lot. >> So we had two choices. and they were very mature people. So I. say yeah look our rockstars we are with. you just let's fold up the operations.

here and then you all come up with any. ideas you may have within IT which is my. original plan I want to get into IT. industry but that's if it makes sense to. you all. >> and 3 [snorts] months later they came. with a plan which became at that time. data mining which then morphed into AI. which is now AI company and that's where. we are in I remember. we may need a board leading this coach. company.

You're a rockstar. You quickly figure. something out. And he was probably the. most um probably the most fastthinking. entrepreneur I've ever funded. The most. flexible and quickest to really figure. this out. Finally, we had a meeting in opera. house. I remember fourth plan. [laughter]. And I was like, but now I got this new plan and. just two two and a half cr funding and.

the rest is history. Today it's you know. the largest you know mobile advertising. company out of India in moi India's. first unicorn. >> and now they're building this whole. glance. >> Yeah phenomenally well. company. >> and it was in India's first unicorn. right? >> Yeah 2011 those million from soft bank. that's a story by itself. You said. founder is everything right regardless. of. sector company right how do you identify. right founder.

you know this is an evolution. >> um but maybe I'll come [clears throat]. to the main point and I can talk about. other things as well. >> one Raj is uh personality traits. what we're looking for are are hell or. high water this founder or founding team. maybe to be fair to the founding team. are they entrepreneurs that are hell or. high water no matter what they will. figure it out no excuse I remember you.

know I mean lucky enough to have deep. kala as a LP investor in our funds so. whenever I meet him I call him so he's a. complete legend please understand make. my trips journey. >> and how many times they almost died and. how they rewald their companies it's. incredible. like. I think 2001. I don't remember so suddenly your. company with 4 500 people is down to.

maybe 20 30 people and restart. but will not die I refuse to die come. hello high water you see book my show. Ashani will be invested in our funds. same thing multiple crashes. at one point he went from 300 people to. six. this week news. What an incredible story. >> Yeah. >> Right. Shiprocket, right? Amazing story. He. told us a story about once when he was. down to 1 cr. But he told his team 1 cr.

we will not die and be IPO 40% up. What. an incredible guy and not only him but. all his co-founding team. What a story, right? So I refuse to die. I will figure. it out. But identify entrepreneur. quality that entrepreneur refuses to. die. So what diligence entrepreneur? We. do a lot of questions. So for example, we ask all the personality trait.

questions that I asked. How. conscientious is the person? The number. one trait of success Raj is are you a. conscientious person? You say what you. do, you'll do it. Which is very. important. Talk is cheap. But are you really doing it? >> Is this the person that if he or she. says it, they will figure it out. Hello. high water and do it. So conscientious. is very important. Determination never. give up. And some of the one of the key. questions we ask is among many others is.

yeah. individual. tell us an example where from all. reasons said that he or she should give. up doing this. It's like it's too hard. cho but he or she didn't give it up and. figured out a way to solve it and now. here they are in that particular. business they were working or that job. they were working that gives us clear. traits of how determined that individual. is that everyone else. So that's something that we because.

we're coming to you know when we do your. company it's just a conception. is nothing there's no balance sheet. there's no P&L statement. >> it's just three four young founders not. young but depends on what age we fund. them. >> but new founders. >> and then but you'll try to find out in. their journey specific points where they. have not quit. >> yeah that's one trait is one trait and. what are the other traits. >> the Other traits are. at the end of the day are they.

complimenting each other teams you know. because if you get two Rajes what's the. point are you complimenting each other. does each of them bring something to the. table that is complimentary to each. other which is very very important so a. good founding team is smart they say. okay let's get so and so for this skill. so and so for this skill maybe even a. third. >> and that's makes a lot of difference. >> tell me who are the top three or four. people you need in a founding team and. what kind of skills they should have. [snorts] so that people can build their.

ideal founding team. >> You know at the end of the day all this. evolves. >> fair. So what you need in day zero is. very different from day 1 to day three. to day four or day five right but like. one of another skill set we need is. clarity of thought you know like how. clear is him or her in explaining their. pitch to us. When you see a muddle. pitch, you know that this entrepreneur. is going nowhere. I should be fully engaged into the pitch. by then. And to your question, you need.

a builder. You need someone who can. sell. See, entrepreneurship is selling. What are you selling? Nothing. There is no business. Fair, >> right? Then someone who can actually. build the product because if you have a. crappy product initially, but after some. time it kind of peters out. So can. someone build a world-class product? Can. someone be a great saleserson who or. she's not only selling the company but. raising capital getting in front of. people like me? And then of course the. third could be other parts of the.

business as his skill. But that's what. we need initially. >> So you need a seller and a builder. >> Yeah. >> Have you seen any founder who has both. these qualities together? >> Yeah. >> Who's a seller and a builder together? >> Yeah. I mean we see so many um so many. founders like that and. sometimes right everybody's doing. everything. >> as they scale then they realize okay I'm. still good at selling I'll continue but. the building part I'll leave it because. I can get someone much better than me or. he or she comes and then the company. just moves. >> who is an exceptional founder you've met.

who seller and builder both. >> someone like Sri Khan welcome me or. fractal he can he loves to build so if I. if you go with me to the office today. you never know he may sitting and. developing something. He's genius. I. mean time limit though. He's too busy. right now. But and he can sell to. anybody. He's too good. >> See? And why is this quality so rare? Because so many people all around the. world talk about it and they say that a. builder is very rarely a seller. A. seller is very rarely a builder. >> But that's why it's rare because it's so.

hard. I mean if you want world class, right? Like a lot of people use terms like. dreamer and developer. >> That's right. >> So you need a dreamer, you need a. developer. >> You know, you have to dream big. like okay like you know it's not like. see when they come in front of me what. are we looking at? We're looking at 50x. 100x outcomes. We're not in the business. of bunts. We're in the home run. business. M. >> so that entrepreneur entrepreneur team.

has to come just not to me but to my. partners and my colleagues and show us. that they're building something insane. >> interesting let's say if I put you in a. room with 10 entrepreneurs okay one of. them in next decade will become a. billionaire the other nine won't all of. them look like they have great ideas. they've all raised funds they're. exceptionally good founders look like it. at least in the seed fund what are the. other nine people are doing wrong versus. one who did right? >> You know the one who doing right is.

doing it for the right reasons. >> What do you mean by that? >> I mean, you know, when we ask. entrepreneurs, you know, at some point we start asking them, >> this is a very important point because a. lot of people are starting companies. because it's sexy, opportunistic, but not really for the right reasons. So. the main reason a a really good founder. gets company gets created is is there a. painoint to solve that the founder. personally had or someone close to them.

So if those founders are the best of. best because you have a clear purpose. and you say okay this painoint was. suffered by let's say my father or. mother or myself I need to solve this. and I'm going to have a mission around. it. I got a world-class team around it. or even if not a founding team. So we. spend a lot of times to understand the. reason the founders started the company. These [snorts] founders and founding. teams we believe outperform the let's. say opportunistic founders 9 is to1. The. one always works opportunistic.

You cannot be so bookish all like this. will not work and all like this will. work. But we rather focus on the. founders who are having a clear pain. point and they have to explain why. >> But this used to be an old playbook, right? Today's playbook is more. like entrepreneurship today is a choice. It's not out of some compulsion or pain. point. A lot of people because it's so. sexy and it's so lucrative as in as a.

profession. A lot of people choose. because they want to do it. >> Yeah. But they choose it for the wrong. reasons. Raj huh. They choose it for. glamour. They choose it for wealth. opportunities. >> But glamour pick career the entrepreneur. the possibility of success is almost. negligible. anyway any startup even with the best. founders best of best the probability of. success is almost zero. Like you know. the pro. >> if they're starting for just glamour. >> Yeah sure. No entrepreneur. entrepreneurship and making it.

successful anyways the probability of. success is remote. the first signs of trouble the glamour. [laughter]. true. but is it wrong to. want to build a company just for money? No, of course not. Why? It's not wrong. But you know when we when we evaluating.

an entrepreneur, we only have limited. data points. So we are playing with. those data points. Like I said, out of. 10, there could be one or two people who. saying I just want to make do it for. money. They'll do fine. But we anyway. the probability of us succeeding and. picking the right founder is so hard. Different factors better. Now have we done that also and funded. people? Yeah, we have. So you say but. there's something exceptional about that. founder that comes up in that meeting. when you realize okay painoint but they. really thought through the business now.

what are we looking for you know you. said is the simple thing how much do you. truly understand your customer. entrepreneur. are they truly [snorts] understand the. customer have they really spent time. with the customers and seen the. customer's painoint that they want to. solve so maybe it wasn't a painoint for. them. >> fair enough but. I'm going to truly understand the. customer and those entrepreneurs are. outstanding because then they can come. with a clear plan. >> as to what to do. So yes, you can make.

it for money and they say my goal is. money. They've done fine. you know we were evaluating. entrepreneur amazing timing. amazing. in the category then why is this company. not done well. >> and we were scratching and then when. some very basic thing came up and we. realized it's called this happened quite. a few years back. >> founder market fit. amazing.

founding. realize this founder Raj is the wrong. founder for this business and. so then we oh my god so now we spend a. lot of time why is this founding team. the right founding team for this. business and we have to qualify that. this is the right reason for this. reasons and if not And that has saved us.

a lot of money. >> Tell me how do. how do you identify founder market fit. is right or wrong. >> because it's pretty simple because you. know what the background of the founder. is and why they're doing this business. and why they will be able to play a part. in this business. >> Like I remember let's say you want to do. a um alcohol brand. We don't fund. alcohol. >> On the other hand um you know building. an alcohol brand is hard work. You have. to go into the trenches. You have to go. and go distribution, do a lot of other. things. There's not sitting in your.

office in point and doing spreadsheets, right? So, but the reality is on paper. the entrepreneur looks amazing sub tick. mark. But the minute that hard work. starts where he or she has to go to the. market and obviously that's just the. start and many other things you have to. manage customs officers, you have to. manage all kinds of things. boss on the other hand some boss no. matter what. job or my DNA is like that I'll do it. I'm simplifying it there's far more.

detailed work we do to pick what is. found market fit or not. >> but do you think sometimes an outsider. can build a big company in a in a in a. category where they have no clue about. >> in fact that's a very good question 100%. because there's this saying you're naive. that young. because they don't realize how tough it. is. So when they jump. hard, super hard, but I'll figure it.

out. >> He's done an incredible job, right? I. mean, who would have said that you can. build a a gigafactory and make a large. public company making electric scooters, right? If he had known how hard it is, maybe he wouldn't have started, but he. said, "Let me figure it out." And no. matter what people say about him today, I have the highest regard. He'll do. phenomenally well because he's jumped. in. >> And what excited you about Bhavish? >> Just tiger. He was like, I will get it. done. Hello high water entrepreneur.

See last week I met 8 10 entrepreneurs. If you force me to tell you who they all. were, I'll struggle to remember 50% of. them. M but how do I remember's pitch in. 2011 I think 2011 in four seasons. something exceptional. entry it's not like some hero entry and. it's not a movie but there's something.

about it on the best founders that. whether they're calm and collected but. it will explain very well or they have. that aura but just that energy you know. >> amazing. >> and what's going wrong with him today. >> nothing going wrong with him. >> the internet hates. Well, you know, I I look at it a. differently. I say, "Look, boss, self-made man, right? And two of them are worth. billions of dollars." Mhm. >> Of course, ups and downs, but like I. said, entrepreneurs who never give up, who are hell high water founders, and.

Bes is very much a hello high water. founder. He'll figure it out. He'll have. the last laugh. I'm not an investor in. him, but I'm a well-wisher. But why do. you think that he will win regardless of. everything which is going wrong for him? There has to be something that you must. see him. You must see him. >> He's very incredibly determined and he. has a crazy desire to win. So he knows what's going wrong and what. he's doing wrong and what he's doing. right. Uh I hope and I'm I'm confident.

if I'm a betting man, which I'm not a. betting man, that he'll figure it out. And for me, he's already done in. remarkably well. So chapter discussion. no one can tell me that Babaga has not. done well well is understatement boss. has done incredibly well. where he's reached remarkable. >> do you think. competitiveness. is the most important trait in an. entrepreneur. >> it's not the most um but it's it's very. important you need to go you need to win.

you know this is not a business where. you know entrepreneurship is not just to. be second place. >> you have to be wanting to win. That's. our job. We love it. We want to be. winning. We want to be number one. We. want to be bor. You meet Praan Utam. They're so quiet, so. >> calm. >> Calm, but they're quietly determined. Remember I said pitch pay. You don't. have to come in and have aura. Calm, collected, clear. >> You know the key is what insight you. have. You know, you're talking about. other things. What is that insight the.

entrepreneur has? So Utam and Pra and of. course other founders as well just so. mature determined from inside resonating. you know success no one will recognize. them we'll walk past on the street no. one will recognize them amazing founders. I'm just blessed to be partnering with. them so many years. >> true they have did incredibly well. >> incredibly well. >> incred and in a space which is so. goddamn hard to crack I used to I. remember I used to deal with lot of uh.

tempo four trucks for. local, you know, from one one small village to. another village, from one city to the. city center and all of that. It was a. mess. [gasps and sighs]. [snorts] It's a mess. There are five. people from exactly same place, five. exact same trucks and they'll have five. different rates and five different. and you have and space. They have. standardized things like it's incredibly.

hard. >> incredible actually know Raj you picked. up a good point. the what we love is entrepreneurs who go. after hard problems. >> because though the probability of. success is very low as you can imagine. if I told you. it doesn't come on short. >> right but if you can crack it then you. have left all your competitors behind. >> you get it so as a VC when Someone comes. to me with a hard problem and if I find. the team to be exceptional, I am super.

excited. Make sense? >> Fair. But chances for probability but no. problem. will be returned at least four times the. entire fund just by just because of the. >> entire fund. We're getting so much money from good. investors thanks to Porter's hard work. forex. And do [clears throat] you think. hard problems.

daily. because I'm already tired with this. sometimes there's a combination of. naivity and determination that. combination is very deadly and very. powerful. We love it. not but I'm saying in general. then when they get in oh but. they had that determination right they. had clarity they had the hello high. water. we'll figure it out.

>> life is figuring it out boss. >> now do you think utam or other founders. from porter. >> all the other founders right. >> if if they would have been from the. industry do you think they would have. been able to crack. Yeah, I think I Yes, of course. I'll. tell you why. It it depends. In fact, a. lot of times you get founders who have. domain expertise. >> and we sometimes quite like that too. because you coming with a domain. expertise saying in my current job my.

company is not allowing me to do this. but I know I have a better plan I'll do. it. So those work very well too. >> Okay. Those are paindriven founders. >> That's right. in different boundaries. and they also have deep domain expertise. already. been in this industry and for some. reason their companies are not doing it. or they're doing it okay and they think. they can do it better and they do it. themselves. founder market be strong because they. are the domain experts. >> exactly exactly right the fully strong. is understatement you can't have a.

closer. >> it's a marriage because they've been. working in the industry for long they. identified a problem they're like the. large company's not taking care of it. let us. >> that's right to found market fit easy. versus picking on Prana and Utam to do. it and other founders of Porter is much. harder task for us. >> as VCs. >> Would you fund a founder market fit. strong founder or someone who's just. driven out of random problems and be. like hey maybe I don't have an expertise. in this but I like the problem I'll. solve it. >> Yeah, like I said we. >> which founder you'll fund more. >> I'd found the first one more of course.

because that's the way we do it. But. some this founder has some edge some. let's say we call it spiky internally. spike something where they've really. made an effort they didn't have the pain. point but they made an extra effort to. go deep into the problem and they were. answering my questions of that unique. insight raja whether it be this founder. or the other founder the idea should be. that [snorts] I should have no clue. about it the founder should be educating. me or any other VC and saying you know.

what this is the reason I'm starting in. this company and I'm like I didn't get. it like what do you mean simple. >> then they have to go deeper into and. explain it to us and say. okay now it's making sense now I'll do. more diligence about then you take it to. your colleagues and partners and then. the whole story starts but the insight. has to be very unique. >> true. >> that and clarity of thought on that. insight this is the insight I have and. this is what I'm going to do about it. and this is my team and then multiple.

blocks you know a block gay block a. True. Is it a is it a big point? Because. I think you're the second one who's. saying this. So I met someone a while. last year in UAE and just out of on a. random dinner with bunch of other people. and I ended up talking to him and he. turned out to be uh someone who built a. $200 billion fund globally, right? And. he said and I asked him like what's one. thing that you you look for when a. founder comes to you because you invest. in very early preede kind of things and.

then you're investing in public listed. companies as well right because it's a. big fund. >> so he said every time when I meet a. founder forget the public listed like. only private market. >> if in the first 10 15 minutes founder is. not able to tell me something new about. the industry he's building which I have. no clue about and my these bunch of. expert analysts have no clue about and. if he's not able to tell me something. new then I don't like it. >> Yeah. So right something similar.

you know you like this you love it and. you know the insight reason. this is the insight so every time if I. come up and tell you something new as a. founder you you value that don't you see. that as wrong oh this is what he's. talking is absolute nonsense this this. can't be done because I have done my. research and I'll be. >> so if if you're a good VC then if you. need to give the entrepreneur some time. to articulate that to you now the. entrepreneur has to be good. that window is lost, right? So, first.

you have to write a pitch that makes. sense for us to meet. So, I always tell. people come referred. [clears throat]. from a crazy schedule also on the other. hand. it's all over the place what do you. think we'll do. and then unfortunately it is not clear. enough and we couldn't meet him or her. >> and when you meet him then you look for. a new insight.

>> among other things. pitch text now the ones that are all. over the place chaos simple what is the. problem one line what is the solution. one line sometimes problems. solution. problem. You're just starting today. and so many pitch come thick with these. things,

right? Then you can have 500 page pitch. tech to Mr. You know, Blackstone or. whoever you want to give it to. numbers. Show us what's happening. If. you have a few months of traction, show. us traction. Show us that you're having. retention. Show us basic stuff. Make it. simple and I'm excited to meet you. >> Mhm. Okay. Give me give me a. step-by-step formula to make the best. pitch deck and the easiest pitch deck. will give you high conversion. >> I can give you five or six slides. >> Yeah. What should what should I have in. a pitch deck? How to make a perfect. pitch deck. How many slides?

>> Say maximum 10 slides. >> Maximum 10 slides. >> Yeah. Okay. >> 10 may let's say you can decide. >> first slide. What should be the first. slide? You can let's go all 10 ones. This is a bit of a debate on the first. slide. I like the team in the front. I like to. see who I'm, you know, meeting and. talking to. >> Okay. Problem. >> simple. >> Second page is problem. >> Solution. >> Yeah. One slide on product if you can. show how it works on a video.

>> Okay. Product how it works. Demo. >> Demo. Simple demo. Click. about traction. If the company has a few months of. traction competition slide. >> Okay. Where do you stand? >> That's right. One slide on how much. money you want to raise. We raising 1. million. >> Okay. >> That's it. Okay. >> Do you think TAM and all of that is. important? Tailwind, headwind, what are. the why is it right time?

>> Like why this, why now? Why us? >> Yeah, sorry I forgot that. Um why now? Slide. >> Why slide? Why now is very important. That's so after problem solution uh and. then why now. >> Okay. The fourth will be why now. >> That's right. >> Okay. >> And see TAM uh Raj. >> traditionally what people are looking. for is large TAMs. >> But I disagree because we our point is. we can even go to a small T but growing. very fast a small new because if you're.

already going to cluttered markets. interest. >> but how do you know that new market will. become big? >> There a couple of reasons. One is we. hopefully have our own diligence done. where we have a thesis that we think. this is the way the world is moving. Obviously we're not gods so many times. you get that wrong but you have some. thinking this is where we feel the. future of this business will go. So. wealth management is going like this. this is how it's been taken care of. Sometimes the entrepreneur as I said has. that insight where they have to convince. us that what I'm like. and oh he's right here.

boss. let's do it [laughter]. you get it. nice so time is like you want to tell. what is the small time that you're. operating in and how fast is it growing. or what are the signs that it will grow. >> either way. then only science can tell us our logic. of the market at least. like it's already exploding exciting.

nobody else doing that right so suddenly. the market is right there. >> fair. >> and then there's no excuse in a new TAM. business then the company has to grow. very rapidly to excite the next round of. investors. >> so team problem solution why now. >> TAM problem how it works. >> then traction then competition. >> simple competition you. And don't show me that 1% of the market. slides. Those are the worst. >> What do you mean? >> I mean like most fun this is it's a 50. billion market so we'll do 1%.

[laughter] That is the laziest slide. ever. delete the presentation. [laughter]. What's a good way to show time then? [clears throat]. No it's if not 1% then what should a. founder show like teach us what young. founders are watching this they should. know. Actually for me it's better when I. meet the founders because then they can. explain with the. >> fair fair but if if somebody's sliding. in a deck and you have to decide whether. you'll meet or not because in after. looking at deck in 30 seconds you're.

deciding whether you should give your 30. minutes or not. >> where on the deck when I'm meeting. people is not on the time especially. when I find the time to be small but. it's more about the clarity of thought. on the problem solution etc is much more. important for me because I'm thinking. okay this is very good but I'm not sure. but this sounds interesting enough for. me Why would that work? Okay. Oh, fine. Let's let's meet Raj. Let's do that. >> Give me an example of what is a good. problem like what is something that. you've seen where founder has been able.

to explain you something very nicely. like in just one or two lines the. problem and you're like I'm excited I. want to meet this is clear. There's so many examples uh we can give. Um. and what happens is when you do meet the. founder many times you realize not. really. >> most of the time not really. >> fair. >> but at the end of the day clarity of. thought on the founder I won't give. examples of companies but if I had to. see 100 pitches.

90 will be cluttered. entrepreneur. the more excitement comes actually the. data will come when We start doing the. religions on the company not by reading. that document by working with the. entrepreneur say. how you thought through this let's do. this let's do that that's a better way. to do it versus creating a cluttered. deck where the poor founder spend so. much of his or her time and then getting. a rejection from us. >> the simplicity and clarity of thought.

I'm repeating again and again I want. clarity of thought simplicity that is. what works. >> is there an example in your head like. someone who came to you for some fund. and you're like this is Great. Yeah, [clears throat] I think so many of. the companies you done in the last year. itself would fit into this whole scheme. of things, right? >> And Jesse, give me an example of one. company you invested in. >> So let's take I'm thinking Kaka. recently. So let's say we did supernova, >> you know. So it's a AI native language.

learning app. >> Okay. young guys Marishi and his. co-founders from uh uh ID of Chennai the. the clarity of thought that they had on. the pinpoint on language was phenomenal. it was just simple that this is what. we're going to do and young guys. >> now of course as any business they've. also pivoted. >> like but the nuance of the product. remains the same but just the use case. has changed. >> okay. >> but that's okay right but initially like. this is a need this is what we're going. to do this is why AI is going to make a.

big. in the life of the companies and for us. it was pretty simple we and and just the. way they articulated it another thing we. liked about them and a lot of founders. is when your previous companies have not. worked what are the learnings you've had. >> you know like okay this is what I. learned this is what I didn't learn this. is how I'm going to be different and so. we feel that you know we feel. entrepreneurship is an overnight success. and suddenly everything becomes unicorns. and everyone's talking. >> but the data tells us that on average.

five or six companies you have to fail. before the sixth one becomes the really. large one. So it's a lot of grind. >> So do you invest in. failed founders? >> We love to. >> Why? >> Because the failed founders coming with. we want to see how much they've learned. from the last couple of companies. So. learn by asking a set of questions or at. least we don't feel the feel that. then obviously we won't do it. But we. see fail founders to be a big big.

market. What is a good answer when. somebody has has failed as an. entrepreneur and come back to you that. why they failed. >> in a very precise way they can explain. to us what went wrong and why this time. will be different and what have they. done differently this time to cover it. could be anything could be that it was a. single founder and they didn't have the. right co-founding team maybe they went. they were founder marketa they went. because they were let's say very. articulate they raised capital but they. were the wrong founders of that category. but now we've realized that this is. important so all the bricks are coming.

together the pieces we say this time. we're ready could be a timing issue so. we feel this time the market is ready. and they have to explain to us why they. feel the timing is right this time but. don't you feel if somebody someone has. failed before their competitiveness. their hunger their speed to take more. risk just reduces no I feel if if you're. built to be in that first category I. said hello high water and kimiko I want. to build something in my life I'll. figure it.

then it's just a matter of time before. you come back with something even. better. And the grit and determination. is what we're looking for the truth. >> But don't they get slow and more fearful. because they're like, "Oh, because we've. failed at this point, then maybe I want. to.". >> Yeah, they do. But we're not going to. find those people, right? Our job is to. find the ones who are not slow and more. fearful, but in fact more excited. See, the best founders are like, "Okay, now I. get it. Okay, this is the right way. Let's start, buddy." So in fact. it's like more you like it more. and see when I used to work in my old.

days when I was at Nokia venture/blun if. I was sitting in California office all. those young founders used to come to us. they would put on the first page Raj why. we failed and what we failed. >> nice first page no nothing what I just. said I started XY Z company these are. the reasons. and India because of stereotype and this. un unfortunate fear of failure social. stigma the poor founder would try to.

hide the point. >> and I'm very keen to understand I want. to understand what they've done I have. no problem my father failed in three. four companies before took off now. >> he never gave up. >> but does it scare you because the social. stigma. >> situation has improved Raj to 2020. >> AB if you look at at least founders or. founders could and their family and. their close ones look at someone who's.

failed in a business in a very terrible. light a lot of people I know who have. been exceptionally good they're like hey. you know what maybe I should go back to. job because this is if I fail again then. it's it's shameful it's it's. embarrassing you know glass half full. half empty so I believe that what it. used to be. >> Mhm. Is there a long way to go? Hell yeah. Hell yeah. Because in India the job is. the most important. People have. struggled.

So that's still going to be there. But. has it improved a lot? I think so. I can. see the confidence level of. entrepreneurs who come to me who failed. and are okay to talk about it. Is it happening with everyone? No. Because social. to calm down. >> What should we do so that more people. are okay with failures? Just keep. talking about it. See, successful people.

have to talk about it because people. want to listen to successful people like. someone like you. Suppose you think. about some failure you had in your life. and you talked about it and how you. overcame it and today where you are. It's it motivates people. >> I I I [laughter]. have a secret like a diary. So where I. write almost every week or the things. are failed. >> This is there you go cuz some like you. you're so high profile and so successful. where what do you learn from failures. and you know where you come back it'll.

be great success. >> Tell me where have you failed. I feel. every day I'm failing [laughter]. every day because our business. investments remember the businesses. works like this 40% no matter what we do. and we find everything we find hello. high water timing. decent exits okay.

on the returns on the fund. So suppose I'm making 10 investments out. of 30 and my other part is making 10. making 10. that's a failure because you feel effort. the and you kind of connect to the. founder you you get to like the founding. team and you it's almost like a marriage. and then unfortunately for whatever. reasons maybe. failure but we always trying to figure. out okay what did we do differently here. next.

our business is unforgiving It's a it's. a it's a business continuously full of. mistakes. >> True. >> Or it could be a failure to move fast. enough. So many other startups we missed whether. it be grow misho all come to us. >> We didn't move fast enough. That's. failure. >> Correct. >> See you missed out on zeppto. >> Zeppto fast. >> No we you know they came to us. Kiranakarta. >> Mhm. >> And remember I just said earlier in the. show in the interview that best founders. you can't forget the pitch. I still.

remember Adit was talking to me and my. partner Gorov and he was just 19 years. old. It was phenomenal but we didn't. like the Kiranakart idea. >> after the call and we said he had. approached Gorov I remember and he said. he said we really like the founder but. Kiranakart we don't think it makes sense. and but I just said. so that's failure when I'm lecturing you. know on this podcast.

[laughter]. >> and what's happening with them now. >> they again. >> what happened in the public market. recently. that is you know public markets are a. different beast and private markets are. a different animal. >> but Adit I haven't been in touch with. Adit but he is A+. >> I like him yeah. >> he is A+ he will figure it out and Raj. you will see one day Zep will be a bare. minimum 10 billion listed company and. it'll be far more than that eventually. it'll be 20 30 billion now people are. laughing because times are tough for him. because public markets are not accepting.

his price and therefore he has to do. what he has to do he will figure it out. he'll probably raise a private round. that's my guess and move towards a. little bit more profitability so that. the Indian market can you know reward. them. >> digest it but he's not going anywhere. soon he's he's going to be there for the. long haul he's the best of best. >> this will be a once in a generation. company. >> so you miss Zeppto you miss Ola that. grow and. >> Misho. list see if you're not missing iconic.

companies or amazing companies we're in. the wrong business. We're not in the. mix. >> Okay. Like you're not even considering. >> even considered. So Shark Tank, I won't. mention the names of sharks, but 80% of. sharks pitched to me also. And we didn't. do any of them. They all done very well. [laughter]. >> So in your fund one when I was reading. you had 32 companies. 30 of them didn't. do. >> really good. Two of them just gave you. exceptionally great results. >> So actually um a few more did. we uh.

they've already been exited. For. example, Dr. Deepu 7 daily uh rounds was. a great exit for us. We sold that. Um. find harsh, we sold that for a very. large amount of money. That was a big. exit for us. And we have three companies. that are now we actually have four. companies. One is in the US. So we don't. talk about it's a SAS company. It's. doing really well called Certa. >> Okay. >> And company B. One is Healthcart. It's. doing phenomenally well. And um I'm sure.

sooner rather than later we will want to. go and do an IPO that by the time when. when it does an IPO this company will be. worth billions. >> Okay. >> We have a company called Tataw 1MG which. is one of from Healthcart. That company. also is doing phenomenally well and. we're very excited about it. Healthcart. will eventually return our fund at least. twice. >> and the third company is Porter which. has done exceptionally well and by the. time we exit this business whenever that. may be and there's no rush for the IPO. as you can read an interview that Rutam. gave last week uh but the company is.

doing phenomenally well touchwood and uh. that should return our fund multiple. times over so we call it the home run. >> so our business if you get even one. great company you're done we've been. lucky to get three of which all three. will be unicorns eventually actually. >> H. >> so that fund is great success for we've. been very lucky. >> and why didn't the other work. >> the other companies. >> like I said a variety of reasons we we. picked maybe sometimes founders that. maybe should not have invested in.

founder market fit too early founder was. maybe not as um determined see we also. got better as VCs okay as last before. that 10 years privately right how to. pick so last year investment and you. ever invite me back 2 years from now, I. may come I will come with different. insights on what other mistakes we made. between today and the next two years. >> Tell me one thing that you used to. believe before and now you don't. >> You know I I believe that um you know.

you need u a situation where uh. you have to have founding teams. It. doesn't matter if there's single founder. if he or she has a clear plan and can. figure it out. You look at PTM right. Vijay Shaka Sharma has done incredibly. well. >> So for some reason I had this thing that. single founder we should not do it here. and there but we broke that paradigm. So. we've changed that. We did Foxtail.

>> in fund three. It's done phenomenally. well. >> and she's single founder tigris and. we're super happy to partner with her. We have other single founders now too. But I'm talking I'm talking talking. about a belief I had in the past. So we. got over it thankfully and which you. know I always say never stereotype and. we were stereotyping without realizing. it sometimes. but. rewind. We done it and we're very very. happy. >> Is there a company you've missed because. of single founder you pass one founder?

>> Yeah. In fact now I'm good friends but. 19year-old. hotels you know too hard I just said. hard problems. >> but one founder then probably. >> one founder but one it was too hard a. problem and he was just too young. inexperienced. >> the nity which I said madness and then I. told when I last met him I just finished. my executive MBA at Harvard Business.

School one of the cases of. So I in my subgroup I led that case. So. I was very proud to lead it and I was. telling my friends boss this company's. been such an iconic business and. whatever the price may. not even he was incubated. >> by a small incubator. My friend Shan. >> okay fame adlaps he had started. incubator. Okay.

>> And that main company from the. incubator, I forgot the name of the. incubator. just some 5 minutes from here. >> Okay. >> Was Oo. and then you you didn't even meet. because like. you're my younger colleague or older. doesn't matter. It'll take days and months. let's say. every six months and then we just say. which are the companies we missed and. then we go back into the future and say. okay from last five years miss because.

it was always good to introspect miss. how can you next time an oo comes or ola. comes not miss it see after all we still. did porter right or we still did health. card wouldn't be in business today we. did a network. >> porter story ki I heard it was because. of some strategic clause that's why you. ended up funding porter what was that. >> it was a it was one It [clears throat]. was you know fund we can only we had. modeled 25 companies. >> okay. >> and I remember fundra and I went and met.

one investor once and he just talking to. me randomly about stuff people were. close people have the money so you. cannot change terms when you buy the. money and he said sasha um so how you. thinking about your recycle clause I. said what do you mean recycle. dude this is what recycle means is say. you make a exit in the first five years. Uh mostly these exits are small exits. because.

so you keep the principle and give the. profit back. >> Therefore using that capital you can. then make put that money back into the. system. How much capital allocation is. there so that you can make a few more. investments as Americans say more shorts. in gold. Mhm. >> So I went back to my investor and said. guys I'm so sorry I never changed the. gold post after this but reason to the. credit of those investors LPs we caught. them they said yes we agree because the. data that investor who showed me he say. the data is overwhelming funds without. recycle they underperform.

>> and if I know that already I'm going to. underperform or at least have a you know. have my hand tied behind my back. So the credit of them they are great. and we kept going and as you rightly. said uh good research you've done. company number 29 became Porter in fact. because we were already putting X amount. of capital per company now in K2 K3 K4. we far more scientific about the capital.

but equable so by the time Porter came. along money was dwindling but my my. partner Naven was the one who had met. them and then he came and talked to me. about it. We said let's meet and the. very first meeting we loved it. >> and the rest is history we did it in. fact the company took off then. continue to do really well and I. remember there was a board meeting in. 2015. market is very hot. >> the Porter was going to raise another.

round of capital and uh. trip never happened because normally. when a market crashes there's some event. black Sunday or something happens lean. particular event but overall the market. just went south. >> Okay, >> this is if you remember 2015. and everyone ran back. So there was a lot of excitement but. when the market slowed down in the end. of 2015 suddenly.

travel I remember they said okay no need. to come because I'm not sure. So. suddenly now you have a cost base and we. were doing intercity and intracity. >> So we said you know we feel that it. makes sense to you know take some tough. decisions. Now this is very important. Most founders push back and uh and. rightfully so is their company. Our job. is to say this is what we recommend but. the cash is limited. >> So so did prana utam. They all said nay. but we think we should do this and do.

that because both business doing really. well. >> Yeah. Now this is a very powerful story. because it teaches you focus and you're. like. but if you're forced to pick what you. going to do right and this is a. greatness of these entrepreneurs that. they did it on Monday they called us and. you know what we've taken the hard. decision to knock off one we remain in. the porter business but we lock off the. other business and today they could have. created a let's say a black buck out of. that but they were doing so well. >> but then. whatever limited capital we have we will.

focus on this cut all costs, cut. whatever they needed to cut. So within a. week they were back in the game because. a lot of companies that period died raj. and what happened is the reason was. entrepreneurs was so. pursuing. but that's life this is business nothing. personal they did it and the rest is. history. >> then the company continued to raise. capital I still remember story of I'm. annual day used to happen in small a.

small hall in opera house when we were. so much smaller firm So come to pitch. again. but he made the pitch and presentation. suddenly I see prana is still standing. outside. no I've been talking to all the founder. all the rich people have come for your. annual general meeting. I can maybe consider 10 lakhs for you. someone saying five lakhs no ego no.

nothing he said I need to be in bomb and. go and get this capital and. >> nice. So just amazing humility. I cannot water. and then and then finally again capital. tufta then they convince Mahindra to. come in unconventional [clears throat]. investor to come in right. >> normally we normally go to traditional.

VCs or private equity funds but they. convince Mahindra Mahindra's love them. Mahindra A and then that after that no. turning back after the Mahindra round. True, true. And there was another story. of Myntra as well, right? You were one. of the first investors in Myntra. >> Yeah, I was the first investor. Uh I. remember um. so MKkesh Bansel amazing entrepreneur. you know. So I'mra. I remember the board meeting used to. happen in his house.

and I still remember once. come and speak to us. I said okay. So I. mean office. don't worry I will wait downstairs for. you then you come finally I see standing. there. >> and I said MKkesh this is Asha. I look up there's a whole building and. Myntra is being created but the real. story there was um. not what I did but what was done by Leaf.

Pixel where he said look uh you know. MKkesh you're an amazing entrepreneur we. really love you but the space you're in. looks tough he is doing uh like a cafe. press for India. >> a cafe press for India like selling cups. and mugs and that kind of market. >> so you need we need to think big so a. ticket was bought you'll have to check. with MKkesh if this story is fully. accurate but I'm 99% sure my memory is. correcting. on Wednesday and next week one trip to.

Brazil. >> and you could see how businesses there. been created in the category that we had. in. and presented and that that's what. became Mntra right online apparel the. rest is history. >> nice. and you invested in that. >> yeah but again the best founder story. actually very interesting. yeah that's a singles founder story I. said single founder as I said a few.

minutes back she said okay I said but I. really like you your ref checks have. been amazing. So if you ever build a. team around you, please call me. So one. day. I'm ready. And he came and I was blown. away by the team and the rest is. history. Now very simple thing. So a lot. of times single founders come or. founders come. get better people.

We are a startup after all. But what are. we looking for? We're looking for that. individual or individuals who have the. the gravitas. clarity of thought and the excitement. that they can create for other people to. leave amazing opportunities and come and. say hello high water I'm I need to be. with this person that's salesmanship. right. >> right it's the number one trait if you. can't get great people uh why would I. fund you. >> to test and he got three amazing. co-founders who all done very well.

postitra so that was it worked out. really Well single founder story single. found was the dominant founder obviously. >> and then two other younger founders. joined him and people don't realize that. the flip card big 17 billion the. enterprise value was broken up in in two. two parts 11 billion was flipkart but 6. billion was myntra 6 billion it's. incredible story it's not 6 billion you. can go online and check 17 billion. enterprise value 6 billion was paid by.

Walmart for just. >> justra. >> but it's nowhere there like people don't. talk about it much. [laughter]. >> was mhel competitive super competitive. see his fitness level. physically [snorts] compared to where he. is today. >> yeah today though he's full into health. >> yeah he's very competitive and he's done. so well and all of them are successful. but one after the other he's still going.

at it he's very competitive he's very. clear thinking He's the best of best. entrepreneur. >> is who is the most competitive founder. you've met? >> Uh I have been lucky to meet only once. You won't remember this because it was. years and years back mitt but Sunil Mitt. is you can't find a more competitive. entrepreneur right the way he came back. it's most inspirational story. >> and look at his age and still to have. done this it's quite remarkable to have. come back and where he has come to have. that energy. Hello high water.

forget dying but he's thriving today. >> that's inner competition he doesn't talk. too much he of course speaks very. articulate person but amazing maji I. mean come on we all have to respect him. what he has done like you know of course. the big man Mr. Dubai money is a legend. We all respect what Dubai did from. nothing. But then to take that group, people forget that when MKkesh took. over, it was only a couple of thousand. crores, 2,000. numbers in the zeros. It's become so big.

and and for Reliance, the game has not. even started for Mukesh. >> If you were ever lucky enough to meet. him and ask him, he is already thinking. of multiple other things that are. >> game on. I mean lucky to meet Mr. Adani. last year in Aabad. Remarkable. entrepreneurship. He's also competitive. >> ultra look perach. look where they reached. No. Are they. do they love money? >> Money has zero interest then by um.

>> not not them. I'm talking about founders. because. >> see Raj I'll tell you the founders who. do the best are the ones who do it for. the right reasons. >> But what would be the right reason? they. the right. >> the right reason comes so much later in. life starting. clear purpose. it it will work and then these kind of. people make so much money they don't. know what to do with the money I get. calls from such founders you see let's. say I'll just pick companies that are.

not VC funded but private equity fund. I'm just coming like a risan kita and. jagish murjani citys tech. >> simplest people boss they sold their. company for two billion. >> I can see jagish randomly walking past. me on the. live in small apartments. They they hate me for saying this, but. they give crazy amount of money in. charity, right? Amazing 10 on 10. entrepreneurs. They can be going in private jets. They have done remarkably well. And the.

purpose was man, I got this hard. problem. I'm going to solve it. I'm. going to go do it. And they did it. And. for them, that's their life's purpose. We love such founders. I. >> I agree. Like people who are on some. purpose mission oriented I want to do. this. >> Yes. >> I want to reach here is so compelling. that people forget about everything. else. This painoint is so compelling to me. I. need to solve it and I am the right. person. I will do it. Everything else is. irrelevant. Money is just a byproduct.

[snorts] Don't disturb me. give it. hopefully. [laughter]. someone who's come with like a. phenomenal [snorts]. startup pitch and then why do you want. to do this and you're like.

as you rightly said founders come and uh. they say whatever they want to we see. I think seven and a thousand deals a. year per year. Let me repeat 7 and a half thousand. deals through emails or connections, people calling. >> 7 and a half thousand. >> Yeah. So if you knock that down and say. okay 2 3,000 to. whatever reason. but then so in such a large amount of.

companies obviously. because there only so many hours in the. day. >> How many do you meet in a year? See I end up meeting the least because. my younger colleagues and partners in. the meeting and then it comes to me. later not you. >> personally how many do you meet in a. year. >> it still be quite a bit because every. week quite a few yeah if I do the math I. haven't never done the math but quite. because actually real energy is. entrepreneur. >> but would you be meeting 100 in a year. >> 60 70 ear.

>> almost one a week. >> boss it should be way above 100 earlier. like in my early parts of my career I'm. not early doesn't mean 20 years back. even till recently way more Saturday, Sunday, Monday, Tuesday, way more. recently come because I my partners are. so good that they're picking such great. entrepreneurs that my job is just to. support them. >> So I'm lucky but I'm unlucky not to meet. more. >> You get it? I'm lucky to have an amazing. partnership and great colleagues. >> Yeah, >> but I wish I had more time to meet the. entrepreneurs. That's my favorite part.

which I miss the most in my job. >> True. career because meet the future. So I mean it I didn't do it to s do a. work in a finance meeting but life but. it's a business also. >> Fair. So you mean almost one a week. but yeah mathematically. >> mathematically like 50 60 mano 52 weeks. almost right. So then. okay let me like let's say your founders.

came in they show grit they showed. everything they're amazing. How do you. decide that it's a good value or like. whatever they're asking is good. valuation because in the beginning. they're just founders and there's. nothing. >> Yeah, very good question. It's more art than science. >> What do you mean? >> See, science you can do a you know. discounted cash flow. There's some. balance sheet. There's logic. >> Logic. There's numbers to be discussed. >> Yeah. Like x is equals to y. You can do. something.

because it's like art. How do you figure. art out? So it's more about how the ent. couple of things how the entrepreneur. can convince us that this is the value. he or she has in mind. >> and how smart he is in negotiating. It's. also sometimes some comparisons you have. by and large met in the market saying. that these companies by and large in. this category valued around that stage. So they're more softer things like that. pure negotiation and frankly comes down. to how much we really want to do the. deal right if we really want to do it.

have we overpaid many times the answer. is yes because eventually see our goal. is simple we looking at this business. becoming a billion 2 billion 10 billion. >> the only thing that reason we don't. sometimes do the deal is because we do. some math internally ownership. then what happens is sometimes when the. partner comes back and say host. But equity then you have to have a. second discussion saying yeah then. should we still do for 6% of the equity. versus let's say 10. >> or let's say 12 instead of 15 and if the.

founder really is uh is exceptional then. the partner say I think it's okay let's. make an exception let's do it so we. can't make the exception all the time. because ownership fun is very important. we don't do it so as the company keeps. progressing. So suddenly I cannot be in a amazing. company and have only a company. Now. yeah if it becomes 20 billion then it. doesn't matter but.

let's say the half a billion outcome. which would be pretty good for a small. fund like us but if you have only let's. say 1% what's the point but 10% not bad. 20 million. >> but do you look for this that. when you invest in company do you keep. this check in your mind that this. company needs to become a billion. dollar? >> Yeah. Yeah. Any company we do every. single in so we do 30 companies on. average per fund. >> Every time we do the investment it has. to be the next fractal the next portal.

the next network. >> Okay. >> Next. >> So you have this like billion dollar2. billion$5 billion. >> Every company we say this founder. founding team can they build a. multi-billion dollar business? If we. don't do that for every single company. we're screwed because the odds are so. low to find one. Right? We can't say. 5x. 3x and these 10 will make it. No, no, no. Every entrepreneur who comes has to. wow us and excite us. >> You won't fund like a very small D2C. company which you know the max it will.

reach is like 50 crores. >> That's right. See that will be great for. if you're an angel investor. >> because. I'm happy it's better than let's say I. make 3x it's better than the stock. market. So what's wrong? And there's my. money. I'm only looking at the X. But we. have to look at it in the as a fund and. do the math and say okay how will the. fund return XY Z. See winners have to. return the entire fund. >> bare minimum 50% of the fund. So from. your fund 100 million million bare.

minimum ideally the entire 100 should. come from the company. If you see our. first fund. Porter and healthcart like I said have. returned the fund not once but multiple. turns. >> Yeah. Fund two we entered the company at. 4 million valuation and IP I can't talk. much about it but you know the valuation. is in billions of dollars. >> so you can do the math how many times. the fund will be returned just by. network itself. games.

neighbor amazing story we have square. yards which is another unicorn we have a. company called noa online sanity pads. phenomenal business company has snapmint. buy now pay. doing phenomenally well. >> So does that mean that your filter to. invest in founders is always. from [snorts] an optimistic lens not.

from saving your backside. >> Yes, well said 100%. See our business is. the max. You can't have a industry which. is more optimistic. We have to be. So. you don't think that. you always think. you know in your mind you have written. off because worst case then we won't do. a single deal only because we have to do. that and see what can go wrong. >> right and then we feel that okay this is. not going to work out the way the. entrepreneur envisioned it then.

obviously we won't do it fair but if we. our goal is what can if this works how. big can this become that's very. important If this works, how big can. this really become? And you're like, okay, forget about all the things that. go wrong. But if all the things go right. that this worked out, I'm like, oh my. god, this is ginormous. This is network. Initially, it was like a head scratcher, right? Kr, I want to put all this. together and factories put together. But. because I came from a manufacturing. background, it made a little bit easier,

but still it was hard. And then me and. my colleague were talking about it and. we said oh my god this insight that Amit. and Shinat had was quite compelling even. for me coming from in fact in first ICB. rejected it then [snorts] my partner. came back and said let's relook at it. like why are you saying no we relooked. it and said okay you know what got it. this is now he got it and it is a. completely new category think about it. what I said earlier it is a small tab. >> yeah. head scratchers. >> you know we like head scratching.

What's wrong with you factory and your. seed fund? So that is where the real money is made. is when you go to the head scratchers. head scratcher like why are you doing. this opportunity? >> True. [snorts] H interesting. >> We call them the edge cases, you know, like. >> what do you call them? >> The edge cases like what are the the. head scratchers, you know? Yeah.

You know, people have always seasons and. our job is only to find are these Hello. High Water founders are they. complimenting each other? They've known. each other from before. Are they going. after a massive new TAM which is all. tick tick tick tick here's the money. finally to what it eventually is but now. it's an unbelievable company but do you. think this this is a good insight for a. lot of founders when they come to pitch. VCs that they should by the end of their.

pitch. they should give subtly the answer to. how big it can become if it works. Yes, of course. >> Because then it helps you. >> also envision and dream along with us. and then you start thinking different. >> see exactly right well said if you can't. take me on your dream in that one hour I. have to suddenly get enthralled wow. amazing like without realizing it like. oh my god this is looking so interesting. and initially like I said insight should.

be so like to you that it's like. okay okay tell me again Maybe medium be. required like we need for Z work. But. then we get it and then the. entrepreneurs you know what now please. look at this new TAM that is there. All. these factories are completely messed. up. They have no one to help them. This. is what we can do. This is the software. This is what we can add. Okay let's do. it. But then how do you know a founder. is a great charmer storyteller versus a. founder who's only a storyteller and.

bullshitter. [laughter]. >> because there I know so many people who. come to a meeting and they will charm. you. They just know how to they'll make. you dream big and you're like damn man. like this is so good. I'm stupid to not. fund this. >> So sometimes. >> and then he's only a storyteller or. she's only a story. If you don't do. proper diligence or lazy diligence. >> then you can get sucked in. >> in the. >> Yeah. >> And some you you you drink your own. medicine now mistake sometimes is the.

founder is so good and so compelling. Uh. which is a good example of that. Should. I give you? >> Yeah. Let's say we work. >> good example. one after the other after the other all. the way till our friend. >> even today the way he speaks it feels. like. but he was a great storyteller. >> like just phenomenal compelling. >> couldn't execute at that level. >> that's right so maybe in the new company. is like I said always give a person a. second chance or third chance so let's.

be fair to Adam maybe he's doing well I. haven't seen the numbers. >> and you were talking about diligence. >> right you said Kim diligence. where to identify who's a bullshitter. versus who's a great executor, >> right? >> How do you do diligence? >> Yeah, because you know now. >> what is a step work like what is a. framework to do a diligence? >> We will talk to at least 10 20 people. per founder to go deep into each. individual. >> and who would you talk to? So we talk to. previous jobs Kamia we talk to if it's.

only from let's say a university we talk. to the professor if required anyone. close to that individual who's had some. sort of capacity to work with him or her. so we need to do that and we've over the. years gotten better and better at asking. the right questions for example this. question I asked earlier right can you. tell me examples of when times cames to. fail then we would say okay would you. fund this person and how much would you. rate this person out of 10 and why would. you give this score. etc etc and then why are you not putting. money into this guy? Give me examples of.

work when they worked with [snorts] you. where you felt apart from the not giving. up point but where were they. collaborative are they very political. not political uh can they attract people. would you like to let me ask would you. ever work under him or her and you know. like no no I can't work with him or her. because this is how it is okay. interesting would you be willing to. leave your job now it doesn't mean they. leave up required I said you know what. if I had a choice I would love to work. with him or her and that's just some. basic ones I'm saying right now there.

Many many many more questions we have. >> But what are you trying to find out in. ref checks and these questions? >> We're trying to find out the personality. of the person. Is he really that hello. high water entrepreneur? If you dumb it. down, do you look for integrity as well? Without integrity there, no matter how. good he or she may be, if there's even a. doubt or integrity, we will drop the. deal right there. How do you how do you. find out in about the integrity of.

>> diligence and directly? >> What question do you ask to find out in. whether the founders ask directly on the. face of the the ref checks? Are there. any integrity issues? Please tell us and. you know they know that God forbid they. know they aware of it and they don't. tell us. >> That's a big problem because you know. we'll be we won't take that person. seriously again and so they people don't. want to spoil credibility but they can. give they may not say directly what. signal they think. And so integrity issues you'll ask. you'll ask would you work with him or no.

what else? No, we'd work with him. Give. me examples of what where they have. succeeded, where they didn't give up. Uh. how are they team players or not? Can. they attract great people or not? Why. are these guys the right founders for. this market? I said founder market fit. You tell us nar you had worked with. them. We are thinking that they're. making sense that there's a founder. market fit for this individual or. individuals for this business. What do. you think? I said not really boss. He. just talking a big game with a this kind.

of business. He's not suited. And. there's example in our company where he. was supposed to do this kind of work. in his own startup you know. So you say. okay he's saying something it's on paper. it sounds good or but maybe he or she. may not do it when the pedal hits the. metal. >> so better back off right now. >> Interesting. And is there some answer or. something that turns you off completely? is like no this is an off button. reference.

>> you know uh if if he or she is very. political if they've had like I said you. just brought it up so you know even the. smallest iota of ethics uh whether it be. maybe giving up too quickly jumping from. project to project jumping from job to. job these are some of the things that we. realized. we were talking about diligence and. tell me. when will you overpay for a startup and. well you underpay for a startup.

The market has changed. Raj today the. joke in the US is uh billion dollar. startup means entry check enterprise. value billion sounds laughable but. that's the madness after AI. market but that's what the trend is. right now you know the entrepreneurs are. so good they're leaving an open AI or. they're leaving anthropic and they're. getting one2 billion enterprise value to. start. >> the seed round is billion. >> because both there'll be a two trillion. company in less than four five years. like anthropic.

Open 890 billion 900 billion and people. 900 come on [snorts] 900 billion. Microsoft Meta Google have taken 25 30. years Amazon you know it's unthinkable. >> so do you think now in states or Silicon. Valley if you're not building a trillion. dollar then VCs are not excited. >> like the large ones. >> you know the good thing about America is. there thousands of VC funds and private. equity funds VC.

to sub there's different strokes for. different folks there some people boss I. only want to go after those 50 billion. but on the other hand enough and more. saying okay the billion to 5 billion 10. billion is still meaningful as long as. the fund size is small there's a big. difference as the funds get bigger then. you have to go after bigger outcomes. >> that's the reason that we've kept our. fund size small it's a key part of our. our insight that most VC funds don't. perform o over a certain size so we came. to the conclusion that in India venture. capital fund early stage maximum 100.

million is enough after that certain. number the performance starts coming. down so if you see our history none of. our funds like last one was 760 crores a. new funds launch maximum 850 we've. always kept it sub 100 million and. that's why performance has been top of. the market. >> why simple math here that small VC funds. outperform large VC funds simply because. and if you're a let's say $400 million.

venture capital fund 1.2 I'm just giving. very macro numbers 1.2 2 billion rightf. let's say you find two three amazing. companies that itself is very very good. achievement then those companies will. dilute as you start funding right so. let's say you you have 6% in one company. it's reached $2 billion you have 7% in. another company that is 3 billion so two. so million aa but your fund is 400. million your two best assets only barely.

made 1x one and a halfx or whatever the. math works to right eventually. Now where are the other 1 let's say you. want to make let's say 400 million 1.6. billion correction. I showed you but where's the 1.1 billion. going to come from your average so those. are your best assets then average 100. million 200 million. that's 700 remember what is other 40%. zero. 2x.

but then don't you feel because fund. size you don't take very risky bets like. the risk capital in US is very large in. the risk capital in India is very small. and you don't end up funding very deep. tech random companies where you know. that the outcome is the probability is. probably 0 to,000 or thousand business. is super risk coming only concept stage. yeah maximum entrepreneur. >> so you don't give like very risky you. don't take very risky bets.

India is a very different market than US. right so it's changing now you see how. space companies have taken off etc. But. we we do like what is network at the end. of the day it's a extremely risky bet. right so all the bets we take when. you're coming in at that stage by nature. of the stage the risk is extremely high. it's super risky business the mortality. is the highest so we already taking that. risk we have no problem with that I say. what kind of companies.

deep. you can if I think I'll think of some. names. Because market was not ready. Deep tech. takes longer to spectify. Not enough. venture capital who can delay the. gestation of getting to revenue because. fund size. Not enough capital. Not. enough understanding. A lot of. entrepreneurs in those days were not. classic CEOs. They were more nerdy it. tech guys. But tech guy cannot run may.

not in most cases be able to build a. large operating business. So. complimentary skill sets. So so many. different agendas. But now government as. you know has become very serious about. deep tech. So I feel that there's going. to be some very interesting companies. coming out space. >> But what do you fund? >> Of course we've we have looked at many. companies and we will fund. It's a. matter of time. >> like defense drones all. >> right now we do a lot of ancillary. businesses that sell to defense. companies or sell to drones or sell to. whatever and those are doing really well.

for us. But if the right founder comes. why not. >> but then because your fund size would be. smaller you won't have you won't take. very risky bet don't you think sir. >> so of course we'll take because. small check. that 2 million 3 million check that we. put is enough to get a company off the. ground then like workers is hundreds of. millions after that right in US large. complicated problem and then someone. raises like hundreds of millions of. dollars for day one so then that's out.

of the game for pretty much all the VCs. in India India cuz not just K capital. but nobody can do it. So why why that. kind of thing is not there. >> access to capital we have to raise. larger funds. >> but do you think founders are thinking. like that are there enough founders who. want to actually build such uh very. complex companies and very comp want to. solve very complex problems. Raj and there are if I think I'll give. you examples in India itself and on the. other hand many entrepreneurs then move. to the US and they build global. businesses they Indian diaspora.

entrepreneurs are sitting in the valley. today right have built amazing companies. because they realize complexity is going. they realize that the access to capital. for the kind of business they want is. better suited in the US and it's better. to start the company on day one in the. US in certain companies. and in India so many examples you just. gave one right now [clears throat]. >> now too many Indian startup founders are. there in fact every CTO it's like CEO. Indian we see because America is a very.

meritocratic society. You can make money for someone, you'll. get an opportunity. No matter what. color, brown, yellow, brown, all that is. forgotten. Capitalist society boss. We had too much. See, of course in my office it happens. We do. it. But India, we just get too fussed. into too many stereotypes and this and. that and.

religion. Why ar focus on the person? >> But rank risk capital from 1 to 10 or. the ability to take risk of America. versus India. >> Oh, America is there's no country better. than America. >> But one to let's say out of 10 how risky. bet how like how risky can they go in. terms of putting a bet on new startup. versus how risky an Indian VC goes? >> America would be nine nine and a half. India we are still at number four. We're. still improving with our simple.

business. >> [laughter]. >> four improve but if you ask me is it. going towards five or going to three. it's going towards five. space company has done so well. >> and skyroot. >> skyro. >> so it's it's true innovation right with. small capital relatively they built. something amazing and. still long way to go very exciting so. you need see what you need now Raj is. you need only one entrepreneur. >> to break the logj. >> to become the trend set.

>> and all you need is like okay like. classic story right. belief see life is belief if you don't. believe nothing can be achieved the. minute you believe magic happens so. sometimes you need a role model or you. need an example and it's easy to say but. US. capital you tell your mind but suddenly.

like why. Now you come from a small town indor but. you're in the middle of Mumbai and where. you reached. So there's so many people. that you have inspired without you. realizing it. I mean for example it broke the paradigm. that you can you have to work your whole. life maybe. simple middle class people they broke. the paradigm and so so many people. they so revered. but I say don't you think people with.

money should push extra. for what rather than waiting for someone. to break all the barriers it become an. entrepreneur or the star to inspire. people. You guys have the capability to. attract money. You guys can put on put. money on so many people. Why don't take. like really risky bets and be like okay. out of this 700 crores or 800 crores.

money. Okay. So when when something's. going well, nobody wants to change. but saying which has helped me a lot is. is change is important when times are. good. >> So what happens when things are going. well? What do people do? You continue. >> then suddenly something starts going. badly and oh. I put on too much weight or whatever has. gone wrong. Then you try to correct it. and hopefully you correct but it's much.

harder. But it's much better I believe. when things are going well, how can you. disrupt? How can you change? Because you. might as well correct yourself because. it's a matter of time before something. goes badly. >> or doesn't go the way you want it. So. the best of best is change when times. are good. And I've done that 50% of my. life in 50% of my decisions and I've. seen that wherever I've done that in. 50%. It has been remarkable very hard to. do.

So well. change why should I change the narrative. why should I change the guest why but. that's life [sighs] so you feel. but there will be somebody who comes. along and says you know what it's okay. if everyone's doing well I'm going to. change and I'm going to do this. differently and that really becomes. remarkable because he or she then pulls. ahead. We come to talk about founders. Let's. say. who will break barriers. That founder. needs to be extremely delusional and.

have self-belief. What point at what point in. entrepreneurs life if you have seen and. noticed the delusional becomes. selfharming rather than actually a good. thing? >> Yeah. You know the delusion is great at. the beginning because you you really. [snorts] want to think of this and go. out and go do this. >> You need to have exceptional belief. You. just talk it over, right? belief but market. it's a fine line between being stubborn. saying I won't give up hello high water.

and just fear of failure that you don't. want to stop because you feel. so I are you doing this for the right. reasons right so that's why you see a. lot of companies. there are many companies rolling along. so I say the opportunity cost for the. entrepreneur the fact that we funded him. or her at least our decision said that. he or she is excellent. is now rolling along at some minuscule. numbers at least what we believe to be. minuscule to be fair to them may not.

move on it's one thing to be determined. like they said I'll never give up and by. the time AI came it still took so many. years but or for that matter co-founder. and the rest is history but on the other. hand you can be hanging around and waste. your life the opportunity cost is too. high so I always nudge people to uh go. do a job if you have to or leave this. and come and have another shot at gold. Refresh your brain. But sometimes people. and and then this delusion of grander.

where you are kidding yourself to your. original question. That's the most. dangerous trait you So have you seen. that in founders where sometimes they go. into that crazy mode and. [laughter]. what are the telltale signs that you. know that founder. it's just the way they behave in the. conversation you can make out. >> like tell me tell me a come up with. horrible founder. >> like stupid business plans where we know. that. or blaming everybody else but themselves.

for the problem right it's easy to blame. other people But see babu, you have to. fix this problem. Nobody else going to. take your problems. Or blaming the. investors, blaming everybody but. themselves, blaming the market, blaming. competition, manufacturing in their heads and saying. that the whole world is against me, but. I'm the greatest person in the world. The best founders have just take it as. reality as to something's gone wrong. No.

problem. We'll move forward. I'll fix. the problem. I'll find a solution and. I'll move forward. That's what it is. from with like I give you the example of. Porter right so many different ways they. figure it out market problem I'll fix it. yeah. >> but do you think the arrogant found. founders they win. >> unfortunately yes sometimes they win. right sometimes you know founders are. not the nicest people fantasy the. founders are amazing there many founders. but. >> and they continue winning somehow.

>> yeah I may not like that individual or. individuals. I may not like the way they. behave but uh they're doing just fine. What was Travis Kleck? He was an. arrogant founder. He's done fine. Maybe. some people didn't get along with him in. their companies which is documented but. it didn't matter. He was a hello high. water founder. Arrogant as hell not so. liked but he was on a mission. >> Steve Jobs similar.

>> most hated Steve Jobs. So many stories. >> Elon's hated in. >> Elon [clears throat] is hated like. anything best of best. So you can have a. very loved founders like Larry Page and. Sergi Brin at Google. But on the other. hand, you got to Elon, you got a you. know, you got Steve Page, Steve uh Steve. Jobs, the ultimate legend. >> Many many founders are not liked. So. it's okay as long as you're not. Do you. look at. >> bending the rules? That's.

>> no like do you look at when you look at. a founder and that founder is like. arrogant. No, this is how I'm going to. do this is how things are going to work. and with his team also he's like my way. or highway and this is how going to be. and at least till the time I take it to. like couple of 10 million $100 million. till the time my vision is there until I. need professional help I am just going. to be hellbound arrogant about it and. take everybody and they continue winning. do you back them. >> yeah. legally see at the end of the day we are. not the ones running the company right.

we run K. >> I'm talking about just people who end up. becoming a little toxic. >> You see on the other hand other extreme. is some founders get love feedback and. want feedback from teams etc. uh ratings. are so high everything is great they're. winning best place to work but the. operating business is doing badly so. what's the point so which one. [clears throat] would I pick then as a. capitalist I'll pick founder. >> but is it is that fair.

>> I I agree with that you as a capitalist. you will pick up that one but I'm. telling you net net if you have met 100. founders who are winning have you seen. that out of the majority will that's why. they're winning majority but there's. quite a like the outsiz returns will be. given by let's say mostly out yeah. >> I mean. >> mostly an example of of gentlemen ut. >> they are the very cute and sweet people. [laughter].

yeah. >> so it you know you can't stereotype. >> so are we telling the next generation to. become more and arrogant and selfobser. absorbed. >> no we're not I mean we're not not saying. anything we want. >> no I'm just asking like when you look at. examples Well, this is how it is. And. even today in the world where people, >> it's hard to win. Raj Steve Jobs, I'm. sure, must have been a sweet little. cuddly teenager and a nice kid, right? But as he grew, he must have realized. how tough it is and how he was treated. in his career, how he got fired, how.

when [snorts] the company was doing. badly, no one looked at him and he must. have realized, boss, this. I need. to build something unbelievable. I need. to be all blinkers focused. And and the. rest is history. and every all no p take. no prisoners take no prisoners everyone. get out of the way right and no nonsense. but the people who resonated with him he. treated them very well you don't see any. stories of him shouting at Johnny IV or. any other the Tim Cooks of the world. they he built a amazing collaborative. team and he did succession everything.

was done phenomenally well it succession. you couldn't have picked a better. successor and they go Apple today many. times the next person that comes. especially for mercury people like Steve. are not that great. >> Yeah, >> because. but the fact that he could still be this. behavior with most people and still have. a Tim Cook under him show that he was. the best of the best. >> True. >> If you don't get succession right, it's. a [clears throat] disaster because. but today Apple's shining. He's. benefiting to his credit. He picked an.

amazing successor. I think all these. guys at the top the ones that we know as. an inspirational entrepreneurs they've. all picked great successes not really. Microsoft Steve but destroyed value. >> but later. Steve then he retired. >> and he became chairman satya was picked. by the board. >> so not all in fact logically you think. Bill Gates will pick the better.

successor or Steve Jobs But Steve. [laughter] point at some point you kind. of calibrate. >> he was like ruthless take no prisoners. arrogant. >> Larry Allison. >> yeah. this extreme hardworking and attitude. ruthless right he I remember there's a. story I don't know how true or false. that is but it's like there's a story.

that he goes up to the group of coders. and said this is what needs to be done. and they said no this can't be done like. in next two days he's like all of you. fired the whole floor was fired and he. started sitting there right then and. started coding. >> anything is possible. >> and he shipped the. possible. like beach where he is right so him so. Steve Jobs Larry Allison Bill Gates.

the whole school answer and. personalities lot of arrogance and lot. of ruthlessness. >> and competitiveness. >> competitive to another level you have to. be boss life business easy. okay we we made this right tell me top. five most competitive founders in India. and I'm talking about not the family. legacy chairman people like you can't. include Reliance or Tatas or whatever in. this you can only tell founders the.

first generation founders who we know. now. >> today. >> I would say initially I would say Sachin. Bansel he was very competitive he was. ruthless in the right way he was. thinking big and he [snorts] built an. incredible company so and he built and. nobody can beat him right 17 billion. exit going no one's come close. >> agreed okay. >> and then to leave everything and then. start Na'vi again and rebuild another. unicorn best of the best. >> yeah okay no nonsense.

Suchin thenish. I've said it before. >> Yeah, >> he's super competitive. >> I love. it. Look at his journey hard. Just think. about it. I will build a the largest one of the. largest hotel chains in the world. It's. laughable. 19 year old kid and in a. capex heavy business and to come in with. no founder market experience with. nothing and with a few crores or rupees. few lakhs and to then and then to go.

through so many ups and downs and today. hopefully on the cusp of listing his. company for billions of dollars you. can't and I whenever I met him only a. few times on life but he's a quiet. confidence. >> but he's sweet guy he he he doesn't come. off as arrogant competitive at least at. least. >> the question arrogant competitive the. question. >> is he competitive Helia today. >> I find him so sweet and nice. I just. love talking to him. I. >> I have never met a more I've never met a. sweeter founder in India.

>> You never He is super competitive and. all for the right reasons. You can't. build a company of your scale without. being competitive. And look at the. scale. He'll be one of India's largest. homegrown hotel chains with a global. brand. It's. >> and now though he's lot of lot of. revenue comes from US and abroad like. >> incredible. grow mouth shut super competitive. unbelievable company. amazing and in the future is young. people like our friends here at Porter. you see the founders of network this.

will be a 510 billion asset in the next. year or two. >> and how can someone who's not networked. reach out to people like. >> they have to boss you have to find a way. we want hustle so all these people any. of these names I mentioned than you. mentioned how do you know anyone when. you started indoor be better you can. have access I'm calling you help that. mean you're a highlyworked indiv today. right but you started from zero. we that's what we're looking for the. trade. >> but start this is starting I had zero.

connection. >> but you found a way now. >> so that's what I'm I'm looking for you. that my goal is if you have to come to. me suppose you're not Raj as you are. today. >> but you were Raj 10 years backh It's not. that hard to. >> for 5 years back nobody was. >> but if you can get to me then that is. half the battle. No. that's the trick. >> That's a key. If you have figured out a. way to reach me then probably. >> and if you're smart enough to reach to. me through a good reference that's key.

[laughter] is a good thing. I give you. credit sometimes you may not know but. you have to be smart enough. What is something that you like when do. you look at company and you're like this. is finished? See we never give up. Uh we we for us. it's finished when the founder gives up. big difference. We never give up because. if the founder can convince us. that's what we need. Fractal has gone.

through so many days of no cash. This is. not in 2001 and two but I'm talking. about even 2007 8 tough times. Even. brother issues but shikan were. [clears throat] never going to give up. and I can go through so many examples in. our portfolio. Porter. >> Porter though in moi. >> does are in moi multiple. >> multiple times I can go through every. one of my other businesses have gone. through this tough time whether it be. health card 1 MG all of them went. through tough times network went through.

tough times we k3 we have so many. interesting companies. >> but why do but you don't have. have a time where you like written offer. it's too late he's not understanding. he's just. 100%. So what we do is we realize some. founders. professional venture capitalist. So if. we don't see the company break out or at. least get to a reasonable scale.

but it's going nowhere to those. companies and we tell the founder write. off we respect your decision to run your. your life but we are going to tell our. investors that whatever residual stake. we have is worth zero. and you you'll remain my friend. I'll help you but as far as coming to.

reviews helping you in any way I'll only. help you if you call me but I'm not. going to proactively follow up in most. cases. because we want to drive value together. >> but [snorts] then would you pick up. phone or someone you have written off. 100%. Isn't it like waste of your time and be. like. Sunday less priority? >> Less priority but still enough that.

if it's genuinely issue that is urgent. I'll take it. Yes. >> Do you hold grudges against someone. who's lost you money? >> No. No. No chance. I will not hold. grudges. I'll just feel next time. especially if they done it the wrong. way. I just said we'll fund second and. third time founders and fourth time. founders. So no grudge but if they done. it the wrong way spent crazily and not. listened even if you given good feedback. but no grudges I can think of one. company that we lost millions of. dollars. I remember last year two years.

back millions. but the founder was. in this crazy growth mode and I was. trying to convince him out of control. I. remember. And he came 10 minutes late to the. meeting. So meeting he was exhausted. He. said meeting officer work. I said company. He said I don't know. couple of thousand. He said my I just. come from meeting the landlord and. the company's losing too much money. So.

my whole strategy was to explain to him. why I thought it was too much burn and. how we should cut down. Before I could. speak he is telling me work. entire negoti. and sure enough he was listening to me. but meeting was going through his head. you know like exploding. and then unfortunately now did do I hold. a grudge no it was a learning experience.

for him so obviously that I'm not going. to be happy. >> but will you fund him again. >> yeah seeking a brilliant guy 100%. But you won't hold him. chance experience at least bad. credibility, bad word in the VC world. in the way you do it and he did it maybe. where he was hubist grew too fast but. that's life that was an inexperience. that's it. >> okay so genuine mistake is fine what is.

a bad mistake where founder did you. dirty. >> well if you're using money for your own. personal requirements and enjoying. yourself with our capital that's a bad. example. First class business. I was sitting in the lobby of four. seasons. Nothing wrong with four seasons, right? One day you buy four seasons boss.

Who owns four seasons? Bills, you deserve it. Are you cribing that. Bill Gates owns four seasons or a large. stake his his investment company. [laughter]. save the money. beautiful value for money place is it?

If the founder salary and all of this. bad sign for you guys. >> Yeah, you'll be hungry equity. Now you. see what I don't take it as serious as. other VCs take it to sub life. I say. take a salary that you can just about. sustain. It should still be pinching you. but you're not thinking too much about. this. It should be nowhere near your. market price like nowhere close. That's. why you're a rock star. Market up 60. Again, I'm making it up. Everything is. relative. So keep it tight but basic. amenities.

stupid. or something stupid. After that boss. come you you will be the richest guy. among all of us eventually but only the. equity in your business. No. So how how. much salary should a seed founder take. series A and series. >> very hard to say that because it depends. on the age of the founder also know 40y. old founder. school. that will definitely be a little bit. more than a 25 year old founder so. everything is relative.

>> okay tell me a 25 year old under 30. founder. article. >> seed. I'll I'll make two three buckets seed. series Okay. [gasps]. And okay. So B. >> 20 million plus about you know. >> Okay. So seed would be what valuation. let's just say. >> anywhere from 5 million to 20 million. seed valuation enterprise value. >> How much? Okay. Let's say money raising. like money in the bank would be better. Seed money say 1 to2 million.

>> Okay. So that's BR 1 to2 million. Okay. And series A how much would be raising? >> Seed would be at least 5 5 million. series A. Okay. Then after that 15. million. >> 15 M okay then what should a and then. there are two founders 25 year old. founder 45 year old founder. >> huh. >> so seed what salary should a 25 year old. founder get. >> 30 40 lakhs. >> a year. >> again I haven't seen the numbers. recently. >> but I'm just giving common sense.

>> it's a good salary for 25 year old three. lakh rupees a month is great salary is. really good salary. >> 25 30 lakhs say maybe maximum 40 lakhs. Then for the older guy it will be maybe. 50 60 lakhs. >> Mhm. >> Because of responsibilities 2x you know. 50 60 lakhs. >> take it then. >> and then as you go higher let's say. a is just a 5 million round. So I'd say. just 10% more you know maybe. >> okay. >> at best then the bigger jumps comes in.

that 20 million plus rounds where at. least you can get let's say 30 40 lakh. 50 lakhs 50 60 lakhs and let's say the. older person goes to maybe 75 80 lakhs. only. do they take double salary somewhat. >> double if the base 20 million no. >> I'd say eventually 60 70 lakhs I want to. see as they go to after that let's say. closer to IPO then you can even get one.

couple of crores. it's all relative. you come and with me. you want the founder to basically pay. pay his or her bills. but not feel comfortable at all because. true wealth is coming from ownership. right see you can be rich or you can be. wealthy so the goal is we only want to. go after want to be wealthy.

>> rich. >> wealthy as a entrepreneur. >> and then let's say 70 okay this I get at. what point founder should start doing. secondary a little bit. >> I think sometimes basic lifestyle. 40 45. if they want a house I'm not saying it's. the most important thing we don't mind. if some small pieces money is taken off. to pay off just yesterday we approved a. one unicorn founder.

shares. and I need money now it's 45 I think. but what series Bad should they start. >> series B is too early because then. you're selling too fast their own. company I'd say much later. >> okay preipo type. see the idea of founder is like for 8 10.

12 years. >> we want that founder to be so obsessed. about his own company and loving his. company and building so much of his or. her net worth in the company that that. is very exciting for us because in our. selfish interests we aligned with that. what do you hate what kind of expense do. you hate when a founder does it on a. company account. Uh I think any expense is excessive, right? Like why do you need to go to the.

best restaurant in the world and eat? Yeah. run the company like a temple like. really focus on every rupee because you. got so many shareholders and eventually. going to go public even more so. responsibly privately. there's so many examples I can give who. are doing very different lives and there.

examples of people very public companies. we both know I won't mention name. because they're friends of mine who. spend insane amounts of monies on the. public expense private j they no need. they get away because shareholder rights. in India. minimal rubbish. but us. compared to India way more like the. founders on company expense spend way. more than India even in a seed company. their salaries and their money spending.

habit are insanely high. >> market so big. >> but let's say. both of them have raised couple of. million dollars not big the US founder. is living a are it's a consumption. lifestyle. Most Indians are very. new. >> but by nature most of us Indians are. very still let's say more discreet. >> in most cases. >> but America may you can talk about your.

net worth also publicly. >> yeah but series B founder you can make. out with a series B founder it's. difficult to make out here. >> in college once one professor asked us. who has $500 in your pocket so I think. one two people say you're only 18 years. you among the middle class of America. [laughter]. Everyone's living in debt. It's a debt. obsessed country. Everyone wants to just. live beyond their means. Here's here's. my last question to you which is.

when if I give you. let's say. 100 crores today what are the and I show. you five sectors how much money will you. put where? Okay. So I'm going to do I. I'll I'll do it right side. Can you grab. me a chips? >> So we'll give you chips and you put the. poker chips on five sectors which are. hot and booming in the VC world right. now. >> Okay. So these are the only options I. have. >> These are the only options you have. >> Okay. >> So I have to do what now? >> Okay. So you have 100 crores. Let's say.

you have 100 crores each. Let's say chip. is 10. 1 cr. >> Chip is 1 cr. >> 1 [clears throat] cr whatever color. doesn't matter. >> And you have to build your portfolio 100. crores for maximum returns looking at. today's sectors. So let's say I pick 50%. for one sector. >> You can do whatever up to you. These are. the five sectors. Where would you put. how much money? >> So each chip is how much? >> 1 cr. >> And I can put 5 crores. >> You can put 100 crores. >> 100 crores. So each okay got it.

>> So you can take like 10 together put it. somewhere. So 50%. Okay. So you telling me 4 5 6 7 8. >> So you you want to put all your money. 50% out of the 100 [snorts]. >> 50 crores. You want to put full 100. please.

Okay. Give me more stacks then. the color. >> No, whatever color it's okay and the. rest is up to you. So, this is you're. saying five 50 crores you would put in. AI technology. >> out of these five categories. >> Okay. What? >> So, I'm putting in within this um. >> and you're only putting in startups. Okay. You're not thinking about. >> Yeah. Yeah. So, right at the beginning. >> Right at the beginning. So, if EVs you. think the startups are not going to be. big. Yeah. >> Only large companies are going to be. big. So, then you want example like.

that. >> This may 5 cr alo. We have five here. Okay. >> 55 cr. then there's 45. um 50. 20 crores. >> Why? >> Because health check health is a huge. opportunity in India. Yeah. Pra.

rest. So why did you put I'll come on this the. last. Okay. EV is a mobility pay. Why. did you put the least? because we are a. you know seed sage fund and the end of. the day uh most of these categories. require a lot of capital and therefore. we feel that most of them don't fit into. what we want to do in most cases. Uh.

secondly India is actually at a very. interesting phase at 5% of EVs is when. actually EVs take off. So logically I. should be putting more there and maybe. next time I come I'll put more because. it'll probably suddenly explode. Like in. China it's become more than 50%. >> So maybe I'll be completely wrong and. I'll regret not putting more in EVs. I'm. thinking now 10 but maybe I should put. 10. >> But from where will you take out.

50? 1 2 3 4 five. So one more is there. So. >> all five is so you are making this 10. >> Huh? 10. >> and renewable energy five. Why? >> Yeah. renewable energy because again. exactly the same reason we I believe. India is. well well uh tuned for renewable energy.

because just one kind of energy is not. going to make us uh self-sufficient and. therefore you can see a lot of money. going to renewable energy uh in. companies like Inox etc have really. scaled up in Suzlon etc etc uh but it's. not a VC game it's not an early stage VC. game and for so for more of an. opportunity I'd put more money but if I. had to put the money because of the. constraints of our fund that's what. renewable energy is. >> so because the small money won't be able. to survive here that's what. >> I mean in a sense it it doesn't move the.

needle. >> in these so therefore there's certain. categories like when people say will you. not do this so like for example we won't. do alcohol we won't do you know. cigarettes we won't do sin industries. >> why. >> because. >> why not alcohol. >> because our investors they many of them. don't like us to do these categories so. then they won't give us money and it's. okay and we we don't want to really. capital not right enough opportunity. opport.

but then renewable energy you feel like. the reason. >> there's a huge need for see. which is not a big headroom every. category has a massive. >> but this is more like PE and large. conglomerate. >> that's right so that we are out of that. for now. >> okay. >> then can pick health tech. >> no then second was EVs and mobility EV. mobility I believe that this this would. change that number will change. dramatically from that even that 10 I've. put to you know maybe 15 or 20 in 3 4. years because EV.

scale comes once it reaches 5% of. overall cars and India's at 4.5 or 4.8. eight. So we're almost on the cusp of. explosion. >> So as long as the government keeps. supporting uh EVs, we will see a big. opportunity there. And then across. mobility in the answer businesses that. come along with. >> but don't think large conglomerate large. conglomerates will take over this. market. >> They're always great entrepreneurs. You. look at ather energy, right? What a. great company. There's so many. conglomerates but a is doing.

phenomenally well and they continue to. execute. I can give you many more. examples within EVs and mobility. Uh. just recently we we almost funded a. company called River. Uh they make these. amazing bikes. >> Great entrepreneur, amazing. entrepreneur. I'm sure he built. something phenomenal. We will uh regret. missing out. I told him that. >> So I feel that's another big opportunity. in India and that's why he moved from 5. to 10. >> Do you think a car company can be built. in India just by an entrepreneur? >> It's more difficult. >> It's very very hard. Was very capex.

heavy but [snorts] you never know. You. saw how Elon came along and. >> in China there was an entrepreneur who. built it. US entrepreneur built it. >> There's a person I know Lee Jun. >> and he created a company called Xiaom. >> which of course everyone knows now. because the Xiaomi phones in India but. who would authority to create a car and. that car is the hottest car company in. China today. It's that that car is so. beautiful. I'm waiting for it to be. launched in India by the first day. It. looks 10x better than any Tesla maybe.

100x. But then in India do you think. anybody could do it? >> Why not? It's like a. >> young startup. I'm not Xiaomi was big. company when they entered car. It's. >> nothing Raj is impossible. It's only the. belief. Either you're waiting for an. Indian entrepreneur to prove it to you. or you've. been living in the US or been living in. China living somewhere and seen other. people. There's always the first person. So my business is about that being. before the market talks about it. Then. you [snorts] see fintech and digital. payments in the government's done a.

great job. Indian founders have done. multiple businesses have scaled in. fintech. It's very exciting. One of our. most exciting companies is Snapmint. Buy. now pay later fintech business. >> We should to return that whole of K2. multiple times thanks to Snapmint. Uh so. we're big fans of fintech. Uh [snorts]. banks. have become legacy, right? So you can. see digital assets really scale. >> Yeah. And so I I'm very bullish and we. will continue to invest in uh fintech.

companies whether it be uh payments. businesses. You've seen how big they've. become. You know there's several of them. are multi-billion dollar businesses. Many of them I met when they were just. starting up and see whether whether it. be Razor Pay whether it be you know M. Swipes the world everyone has done. really well. >> Okay. So that's why you continue to. battle. Don't you think it's been. oversaturated? >> Well there's always new innovation. We. even now we're seeing new companies with. a new new edge. there enough pain points. in in the businesses that they're coming. out to create and more like we have.

thesis across multiple years. >> fair and then health tech I think this. is completely under under penetrated. India anything in India with health. whether it be hospital beds which is. infrastructure physical infrastructure. to digital health uh mental health the. penetration levels of health in our. country are abysmal so the need for more. health whether you call it health tech. you just call it health related. businesses uh is immense. [clears throat].

>> Isn't it one of the hardest sector to. crack? >> Yeah, it's very hard but like I said. earlier in the in the conversation we. love hard problems. >> We love hard problems. That's why we. wake up in the morning to crack hard. problems. >> Fair and then AI and technology. What do. I say? Why like full money you have put. here isn't do do you think this bubble. >> you know there will be lots of companies. that will die Raj because like any hot. category will always have entrepreneurs. who are opportunistic or have the right. reasons but have failed so there's and.

there's too much money coming in but. this will be the biggest. >> category of my career it's it's almost. infinite time it's giant it's the. largest TAM I've ever seen in my life. every company will have to have some. version of AI whether it be firm like K. capital Capital whether it be your firm. any company in the world without an AI. strategy and execution of AI will not. survive in the years to come right now. there's a lot of negative negativity. like oh but company's not really using. it and so forth I agree but it'll come.

and when it comes if you're not ready. god forbid and so that if you read. anything about any company in the world. today which company is not an AI company. today there is no company left that. cannot have an AI strategy. >> yeah So like I said there will be some. burnout. There is happening burnout. There will be deaths. That's part of our. lives. But that category AI and tech. combo is very very very exciting. It's.

huge and as VCs we are very excited to. be part of that journey. >> Tell me one specific startup idea or an. opportunity which a young person can. take it from you and build it today. Well, now take I'll give you an example. of one company we just did recently at. the beginning of the year, Super Living, right? It's young founding team, amazing. founders. They had found a market fit. because they came from Misho. >> So they knew how to sell to that TG. >> and uh my partner Sita was leading the. deal. She loved the founders from day.

one when she met them and you know the. rest is history. We funded it. They work. with small towns. Think of it like an. open AI for small towns. you know they. consult people with government this. issue this related issue yeah they're. entrepreneur that TG is not comfortable. using a let's say a fancy AI like chat. GPT or whatever but they're much more. comfortable here and those guys. understand that TG TG is paying it's a. phenomenally exciting company and it's. already exploded light has already given. us $7 million.

>> in the business it's literally exploding. and we call it consumer AI that's our. thesis we are big fans of consumer AI. companies because the larger companies. in the US so globally not interested in. this market. >> yeah very small for them. >> secondly the entrepreneurs understand. this market much better than any of them. would understand there's edge why should. cave in the deal and why should the. entrepreneur win in their respective. categories so consumer is something we. love. >> what is a personal problem that you're. going through today for which you'll pay. someone if they solve that problem for.

you. >> I'll answer that and before that I'll. come back to your original question in. an ideal world I know it's late but I. believe India ideally needs a large. language model of its. So if some founder is willing to think. very big and willing to go out and say. okay you know what I need 50 billion I. need 200 billion I will do it there is. money available somewhere in the world. I'll go do it and build an Indian you. know deepseek or whatever that will be. amazing because India needs sovereign. power around this because other. dependent on global companies we're.

dependent on Chinese companies so I. would love to find such an entrepreneur. maybe we may not able to get into the. deal because they may require lots of. money but I'll be clapping on the. sidelines for for such an entrepreneur. >> Got it. >> And pain point. Oh, there's so many pain. points I have. You know, for me, painoint, if someone can, you know, launch a a software drinks. I love. drinks. So, I like uh you know healthy. drinks, low calorie drinks. So, I don't. see enough options in India. I love to.

drink all kinds of uh drinks which are. healthy but lowal. So I'm now I start. just phoned up [snorts] Nirj at Hector. Beverages. They've created this very. healthy soda. >> Okay. >> So I love it. I'm drinking four or five. bottles a day now. >> Oh, interesting. Did you try Zero by. Karan Ola? Karan Bhai launched it with. VBA founder. >> Yes. Yes. Try care. But it's I've heard. very good things about the company. I. check it out. [clears throat]. >> Interesting. Give me an idea which has. not been built and you think is a. problem that somebody should solve.

>> The pain I would talk about is mental. health. H. >> mental health is got a big stigma in our. country. Having said that in the last. few years slowly people have started to. talk about it but I have known people. who've gone through mental health issues. in our country and uh the level of. support and help is nowhere near where. it needs to be. >> Agreed. >> So that's the one I would look at is. mental health and say for God's sake. that we need thousands of more mental. health specialists in our country and. entrepreneurs going to build companies.

around mental health. I think can be. incredibly successful because it's a. pain point not just for you and me but. for millions of people around the. country. >> I absolutely agree and I'm so close to. it because I've seen it in my family and. there's absolute no support. >> You agree? >> It's it's horrible. >> So you can see what a big opportunity. >> it's a big opportunity. Plus if. someone's going to someone's actually. building a good thing I would fund it. regardless of whether it works or no. I. I would put my money behind it because I. want it to be. >> That's what I was thinking. I got so. many but this is the one I would say.

number one. >> and I would fund it like I'm sure you. would too just. >> in a minute. >> just for the. bet that it should work it should exist. because it will make the world better. >> That's right. >> Thank you so much. >> my pleasure. >> Thank you. It was pleasure having you. Thank you so much for doing this. >> Thank you boss. >> What's up sir? See you once again. [laughter]. >> Beautiful room by the way. >> Thank you. Thank you. We're trying.

Of course, it's an understatement, but. it's amazing story. [laughter]. Nice. One day already. We are just exactly the point. It's phenomenal. >> Thank you. >> Great journey. Thank you for watching. this episode till the end. We would love. to know what you liked or disliked about.

this episode and which guests you would. like to see on the show. Let us know in. the comments. Your feedback help us. improve and make every episode a little. better. I'll see you next time. Until. then, keep figuring out.