Quick question: Would you give someone your money for ten years if they promised you'd get back roughly what an FD would give you? And they'd also take 2% of your money every single year, no matter what happens, plus 20% of any profits at the end.

You'd laugh them out of the room, right? Well, that's venture capital.

Peak XV lost three of its partners. Ashish Agarwal who backed Groww, Ishan Mittal who invested in Razorpay and Tejasvi Sharma who bet on Cred. These guys crushed it and they still walked out over "disagreements on economics and payouts."

That's when we realized: this isn't a Peak XV problem but a VC industry problem that nobody wants to admit. So we brought in Mayank Bansal, a hedge fund manager who pulled the actual numbers: Crisil data, Peak XV's fund performance, small cap index returns, FDs. All of it. Joining us is also Arundhati Ramanathan, deputy editor at The Ken, who's been tracking these partner exits closely.

Mayank's take? "What is happening in the VC industry currently is they are charging the profit shares of that Medallion fund while returning less than index funds, which is blasphemous."

Most Indian VC funds are charging 36% profit share to deliver 12% returns while a small cap index fund gave 13.35% over the same period which you can withdraw anytime. So why do the smartest investors in the world keep putting money into this? Why does two and twenty still exist?

Fair warning, this episode is number-heavy. We've linked the reports in the show notes so you can follow along. But the punchline is simple: venture capital in India might just be an overpriced underperforming asset class nobody's willing to admit is broken.

Listen to find out why the exits are just beginning.
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Additional resources:
1. Accel India's fund returns (Newcomer, paywalled)

2. Crisil's AIF Benchmarks Report

3. Indian VCs’ boss wants them to take a pay cut by Arundhati Ramanathan

4. India's VCs are getting disrupted… by India's tax-payers by Praveen Gopal Krishnan

5. The invisible whale that capsized India’s leaky options boats- Two by Two episode 51
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This episode was produced by Uddantika Kashyap.

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🚨The Ken's Zero Shot podcast is hosting a live event! This is a speculative yet realistic discussion built around one premise: what happens when AI agents take off in India? How will they rewire existing habits, business models and profit pools? Since nobody knows for sure, we won't pretend to have all the answers. Instead we are going to break the narrative. Click here for details.