In an attempt to truly decode the VC-founder relationship, this Matrix Moments episode peculiarity Asish Mohapatra, Co-Founder of OfBusiness- one of India’s passing tech-driven B2B giving platform, which is also a Matrix portfolio company- in discourse with Avnish Bajaj, Founder and Managing board, Matrix Collaborator, India.

Before setting up OfBusiness, Asish worked with Avnish closely as part of Matrix’s investment team.

This episode follows a role-reversal of sorts, where Asish, in his capacity as a founder, interviews Avnish on topics such as fundraising, early-stage, and VC investing. The discourse embraces questions that first-time founders always “ve been thinking about”, but “ve never” expected a VC.

” The most interesting thing about this relationship is that Asish used to be at Matrix Collaborator, India. He was a venture capitalist before better gumption prevailed. And, actually, better impression has dominated for him multiple times ,” says Avnish, at the top of the hour.

Matrix Moments - Decoding founder-VC relationship

Asish and Avnish

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” This chapter are a bit terrifying because it is Asish asking me, as a founder, questions about venture capitalism. And for those of you who know Asish well, that’s probably a bigger risk that I “il just take” than investing in Asish’s company ,” he jokes.

The witty repartee results into Asish posing some interesting questions to the seasoned investor: how does a VC decide the founder is ready for financings; what if the founder believes in his or her make, and frames all their eggs in one basket; and what are some indicates of a company being VC-ready.

Being VC-ready

Often when somebody is not VC-ready, it has more to do with if the dare is one that can be backed by VC, or more so are they even VC-backable. Citing an example, Avnish says,

” I don’t want to be derogatory, but even a kirana supermarket determines coin. It’s a profitable business. But it is a lifestyle business. So, I find that if the intrinsics are lined up, the reason we may say that this business is not VC-ready is because we feel it’s not a fundable gues, and doesn’t have the hockey-stick nonlinearity ,” says Avnish.

While every founder wants to have a conversation with an investor to understand if they can be invested in or not, Avnish adds the best way to get introduced to a VC is through a reference.

Speaking about an investment Matrix is currently evaluating, Avnish says the team brainstormed for at least six months before making any decisions.

” For me as a VC, during that brainstorming, my belief preserved going up even though the ideas continued deepening and get dismissed. So, I think it’s important to set it up precisely ,” says Avnish.

On picking the kinds of benefactors to invest in, Avnish says,

” I ponder where we have invested in huge founders, where it hasn’t worked, is that the choice of the market has turned out to be more limited than we expected. It’s not that it will never were getting ready. The founders are working very hard, but you are burning through coin. I think some will turn around. But there are the ones that don’t turn around, or the ones that go, let’s say , not so well .”

Earlier, 80 percent of Matrix’s slew flood “wouldve been” young 20 s cohorts; today 70 percent to 80 percent of the administer move is from experienced founders. But there always are learnings even for potential investors, the veteran VC adds.

Team better than one

Is private equity or the investing business just about the founder? Obviously, a great founding team is better than a single founder, and they captivate higher valuations when compared with single founder-led companies.

But it is more about how the team works, says Avnish.

” It generally doesn’t come down to valuation. It comes down to cheque size. You are willing to take more jeopardy because possession has to be equal. I judge my own personal learning is that I used to undervalue A) Followership, and B) Selling sciences, and they are somewhat related- founders with excellent selling talents will get more shoots at the goal, whether it’s because people follow them, because investors follow- mostly people be complied with whether it’s investors ,” says Avnish.

What if some of the founding team separates? For that, potential investors frequently plans in 10 different scenarios. These situations are generally very hard on the founder. There are routes the chemistry in the founding team is also stress-tested, says Avnish.

” But at the end of the day, what keeps the relationship moving is reciprocal respect. I have a genuine interest and ardour for founders ,” he concludes.

Listen to the podcast here.

( Edited by Aparajita Saxena)

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