The Desi VC with Akash Bhat

Ankita is the founder of Sarvaank Associates. She brings with her a rich experience of having worked with prominent law firms as well as leading the legal and transaction team of Indian Angel Network (IAN), Asia's largest Angel Group with more than 450 HNI Investors.

While at IAN, Ankita was responsible for closing of the deals from start to finish. She played a pivotal role in handholding the Startups in further raising of funds and supporting the investors to get the right value of money. Prior to IAN, she has worked in leading law firms and gained extensive experience in advising clients on investment / restructuring transactions, mergers and acquisitions, joint ventures, exit transactions, company formation, debt transactions and company law matters. She has also worked with some of the IT juggernauts and the government together in the UIDAI Project colloquially Aadhaar.

Ankita's experience includes advising clients across sectors including amongst others, telecommunications, information technology, renewable energy, power, manufacturing, hospitality, FMCG, food, defense, space, real estate, logistics, fintech, healthtech and deep-tech companies.

Ankita is a practising lawyer since 2011 and is a qualified company secretary.

In this episode, we will cover:

1. What is a term sheet?

2. Nomenclature associated with TS for first timers

3. Who should set the term sheet?

4. Pre-money vs post-money

5. Cap-table construction early on

6. Common shares vs preferred in the term sheet

7. Exit scenarios and how to approach it in the term sheet

8. How can investors protect themselves through  favorable clause sin term sheets

9. Structuring Pro-rata rights

10. Super pro-rata and why it’s exercised

11. Conflicts with ROFR / ROFO

12. No shop clauses

13. How can founders protect their own equity

14. Voting rights & board structure on term sheet

15. Why shouldn’t founders haggle over board observer seats

16. Wrt the term sheet, what should founders be open to negotiating and letting go off?

Siddharth Mody is a Partner at Desai & Diwanji, one of India's leading law firms focusing on core areas of commercial and finance activity across PE and Venture capital among other asset classes. Siddharth has spent over 17 years in the industry and has had the unique experience of watching the startup ecosystem evolve to where it is today.

Glossary:1. Double-dipping: A liquidation event where the VC receives their money back and then gets a share of the remaining proceeds.

2. Promoters: Founders / entrepreneurs.

3. ESOP: An employee stock ownership plan (ESOP) is an employee benefit plan that gives workers ownership interest in the company.

4. ROFR: Also known as first right of refusal, is a contractual right to enter into a business transaction (in this case rights to participate in a deal) with an entity before anyone else can. If the party with this right declines to enter into a transaction, the obligor is free to entertain other offers.

5. ROFO: Also known as right of first offer, requires an owner of an asset (in this case the startup who is providing equity in exchange for capital) to negotiate the sale of an asset (equity sale) with the holder of the ROFO before offering the asset for sale or lease to a third party.

In this episode we will cover:

1. Why startup law (3:49)

2. Why do startups need a lawyer from Day 1 (8:54)

3. When should a startup first engage with a lawyer (19:49)

4. What to look for in a lawyer (25:02)

5. Should you compensate your lawyer with equity? (31:06)

6. Red flags associated with your first term sheet (36:18)

7. Template for an awkward conversation (42:35)

8. When do deals fall through wrt valuations (49:54)

9. Where can deals go wrong with ESOP construction (58:30)

10. How do you negotiate predatory behavior from VCs? (1:06:42)

11. Red flags wrt to deal negotiations – experiences from Siddharth’s career (1:15:12)

12. How to request exits from your investors (1:22:40)

13. Advisors to Emerging Fund Managers / first time fund managers (1:26:28)

Anvesh is a Managing Director at MassMutual Ventures (MMV) and co-heads MMV’s investment efforts in Asia. Prior to MMV, Anvesh was a Director and Head of Investments at Openspace Ventures, where he was part of the founding team. He started his career at Citi in the TMT Investment Banking team, during which he spent around 8 years in Hong Kong and Mumbai on M&A and financial advisory work with clients in the APAC region. Anvesh holds a BE in electronics and communications engineering from Anna University and an MBA from T.A. Pai Management Institute.

Anvesh currently serves as a Director on the Boards of Biofourmis, Lynk, See-Mode, Milieu Insight and Qapita.

In this episode, we will cover:

1. Has the second wave of Covid in India impacted MMV’s investment thesis? (2:00)

2. Learnings from interactions with portfolio founders during covid (3:50)

3. The rise of the enterprise tech ecosystem in Asia (8:00)

4. Leaving investment banking for venture capital, what did the landscape look like back then vs where it is now (14:37)

5. What is it like looking into different South East Asian marketing from a VC lens? (17:49)

6. How do VCs help frame regulatory structures in frontier markets? (24:01)

7. What does the LP appetite for Asia today look like? (28:54)

8. Where and how does the the fund fit into MassMutual’s macro ambitions? (32:10)

9. What could the future thesis for MMV look like? (37:18)

10. How does MMV look at the healthcare landscape across SEA? (44:04)

11. Which is a better bet – a startup in a developing or establish market? (50:05)

12 Role of regulatory framework in fostering customer loyalty (53:09)

13. Evaluating similar business models across multiple geographies (56:45)

14. What startups don’t understand about SEA markets (58:39)

Raja Ganapathy is the Founding Partner at Spring Marketing Capital, a skin-in-the-game marketing capital firm with investments in companies such as Byju, CureFit, WakeFit, Practo, 1mg among several others.

Raja has worked with founders for most of his working life of 24+ years. First with Ogilvy and Brand David, where he worked with founders including Muruga of Bharat Matrimony and Siddhartha Lal of Royal Enfield. His defining stint was with Sequoia India, where as CMO, Raja worked with founders from different stages – Byju Raveendran (Byju’s Learning App), Vikram Chopra (CARS24), Amrish and Jitendra (Citrus Pay), Virendra Gupta (Daily Hunt), Jaydeep Burman (Faaso’s), Kunal Shah (Freecharge), Sameer Maheshwari (Healthkart), Amit Kumat (Prataap Snacks), Alan and Nami (Truecaller).

The founders he worked with at Sequoia brought a variety of diverse opportunities and challenges to the table and helped Raja decide what he wanted to do with the rest of his life – work closely with founders and founding teams. His raison d’être is to look at business challenges through the lens of marketing with a skin-in-the-game, long term approach to help build the brands of tomorrow. And that’s exactly what he seeks to do at Spring. Raja is an eternal optimist and believes strongly that creativity and entrepreneurship can change the world. He is thrilled that Spring has an opportunity to work with founders who hate the status quo, believe in positive impact and are never satisfied with the past

In this episode we will cover:

1. Insights from the pandemic (3:14)

2. How did fundraising differ during the first fund vs the second, which was set largely during the pandemic months (7:00)

3. Selecting LPs: What is the right strategy as a fund manager (13:51)

4. What’s motivating Spring’s LPs to join them beyond return of capital? (18:01)

5. How did Spring’s thesis come into being? (25:41)

6. Challenges that come with Spring’s thesis (32:10)

7. Where are founders in their ‘brand journey’ when they come in contact with Spring? (41:28)

8. What don’t founders understand about branding? (46:40)

9. How and why are celebrities thinking about venture capital? (50:55)

10. Why aren’t Indian celebrities more impact / value driven? (53:10)

Vaibhav Domkundwar is the CEO of Better Capital, an early-stage venture firm that builds & invests in category-defining businesses. Prior to his investor journey, Vaibhav was an entrepreneur, having founded and successfully exited a venture-backed startup Roamware (acq. by PE firm Audax).

You may follow Vaibhav on Twitter here.

In this episode we will cover:

1. Learnings from investing in 2020 (1:45)

2. Covid impact on decision making (6:36)

3. What value does Better bring to the table? (9:36)

4. How are founders buildings startups today vs twenty years ago? (15:31)

5. What kind of exits do pre-seed stage investors look for realistically (19:53)

6. Why did Vaibhav decide to be a solo GP in a fund as opposed to having partners? (23:34)

7. Fundraising challenges as a solo GP (31:11)

8. Retrospective insight: Building a foundation for Better Capital (36:06)

9. What is the vision for Better Capital? (49:00)

10. A little more about Vaibhav, beyond his investor persona (53:13)

Pearl Agarwal is the Founder and Managing Director of Eximius Ventures, micro venture fund looking to create a thriving global entrepreneurial community and nurture young talent in India. Prior to founding Eximius, Pearl has spent time in PE and Investment Banking in the US and UK, and holds a Bachelor’s degree in Economics and Corporate Finance from The University of Texas at Austin – The Red McCombs School of Business.

You may follow Pearl and Eximius on Twitter.

In this episode we will cover:

1. Experience raising capital and managing a fund during two different phases of Covid lockdowns in India (2:54)

2. Learnings from conversations with portfolio startups (10:10)

3. Covid impact on a fund’s investment thesis? (14:29)

4. Why did Pearl decide to launch her own fund (19:20)

5. What does a young emerging fund manager today need to know about the investing landscape in India before thinking about setting up a fund (28:36)

6. How welcoming is the ecosystem to new comers? (32:19)

7. What does Pearl mean when she says Eximius is an agile micro fund? (36:00)

8. How do you be agile in VC? (41:35)

9. Why does Eximius have a dedicated HR person on their portfolio support team? (51:53)

10. What kind of support should founders provide so as to maximize their VC’s efforts? (59:48)

11. Advice to founders when fundraising (1:08:01)

Anjali Sosale is a Partner at WaterBridge Ventures, an early-stage VC firm based out of Bangalore and Delhi. Anjali began her career at EY, going on to becoming the Vice President over the course of a ten-year stint, before moving on to Myntra where she led their Brand Accelerator Program for three years.

In this episode, we will cover:

Impact of the Covid second wave on investments (2:20)

Challenges founders are facing especially wrt their workforce and bench strength (7:25)

Anjali’s journey into VC (15:11)

Thesis evolution in general within the consumer world (27:33)

Covid induced trends within consumer sectors (32:00)

Learnings from building communities in India (43:36)

How does community “fit” into a fund’s thesis? (50:01)

Fund-raising during the second wave and thesis development (1:00:43)

Red flags during fund-raising –– for founders (1:07:01)

Monica heads the Wadhwani NEN and Inspire programs of the Foundation. An education entrepreneur (2000-2009), she completed her MBA from Thunderbird School of Global Management. Prior to joining the Foundation, Monica was a Director at Omidyar Network, where she spearheaded the education/skill investments and grants in India. Monica has also been the Founding Partner at Kaizen Private Equity, a $70 Mn fund, where she drove investments to the tune of $25 Mn in the education and skilling sector. Monica has also been the board member for reputed institutions like Akshara Foundation, Mount Litera School, Varthana, Aspiring Minds, Kalorex, to name a few.

About Wadhwani Foundation: Wadhwani Foundation is a not-for-profit, founded by Dr Romesh Wadhwani, with the primary mission of accelerating economic development in emerging economies by driving job creation in India and other emerging economies through large-scale initiatives in entrepreneurship, small business growth, innovation, and skilling.

Salone has 14+ years of experience as an interactive media VC investor, game entrepreneur and ex M&A banker. She has seen companies from different vantage points ranging from seed to IPO stage. Prior to Lumikai, she was a Principal at LVP, Europe’s pioneering seed stage games VC where she was involved with multiple companies in the gaming ecosystem across content, platform and technology bets.

Salone was also Co-founder and CEO of TrulySocial, a venture backed gaming company for female audiences out of Europe and India. She was responsible for product vision, overall commercial strategy and new market growth striking up novel partnerships with global strategics, celebrities, influencers and brands.Earlier to that, she worked across global financial institutions as Vice- President, Global COO Office at Barclays Bank and M&A at Morgan Stanley, amassing $10B of M&A transaction experience.

Salone has been recognised as Top 30 Women in Mobile, Top 100 Asian Stars in UK Tech, Iconic Women Leaders by WEF and Jury Member, Bafta Games in 2017. Salone is also a renowned thought leader on “Innovating in New Game Genres” and “Building Games for Female Audiences”. She has an MBA from IESE Business School, Spain.

. . .

In this episode we will cover:

The year 2020 at Lumikai (2:12)

The impact of a fund’s thesis on the fundraise (4:43)

Challenges of raising a fund during a pandemic (8:57)

Salone’s journey and the genesis of Lumikai (13:31)

What’s hot within gaming in India (18:51)

How do you solve for monetization at scale within gaming in India (28:23)

How do you devise an India strategy if you’re a gaming startup (38:25)

How are LPs looking at gaming in general? (53:00)

What role will the later stage funds play in the gaming ecosystem? (59:08)

What role do VCs play in drafting the regulatory framework within gaming in India (1:01:00)

Fantasy and gambling: Game of skill vs game of chance? (1:04:35)

Kunal is a serial entrepreneur & investor with 20+ years of global experience. His previous ventures include Carnation (exit to Mahindra Group), Laurus Labs (IPO NSE & BSE), Aptuit Inc., InfoPro Solutions Inc. (exit to Aptuit), Razorfish and Vodafone. Kunal has completed his Economic (Hons) from Delhi University, MBA from FSM and MS from Northwestern University’s Kellogg & Medill Graduate Schools.

In this episode we will cover:

1. Learnings from 2020 (2:40)

2. Where are the opportunities within the mobility sector (9:02)

3. The future of EV in India (22:50)

4. How can VCs influence regulation within the mobility sector (40:50)

5. Opportunities and pitfalls within the last-mile and middle-mile delivery sector (51:07)

6. Why did Kunal decide to become an investor? (1:07:40)

7. Importance of sector focused funds vs generalists (1:15:00)

8. Rapid fire (1:28:02)