Over the last 30 years, have seen many friends go overseas for ‘greener pastures’.
Never felt any dissonance with the decision to stay back until now when you are unable to find beds and oxygen!
Forget global superpower and $5T, let’s get basic healthcare and education right
Yesterday at
@iitbombay
, the Director asked me about motivation behind giving back. I showed this post (from batch mate Asheesh Bhandari) on how some ‘unknown’ others helped us get access to quality education at very low cost. Now is our turn to help. This is what we paid 👇
A 10 year old startup, Vini Cosmetics, sold majority control at a valuation of $1.2B. Founders owned 62% stake till this sale.
Fantastic example of raising limited amount of capital and stewarding it well.
Congratulations Darshan and Deepam Patel and
@Sequoia_India
Met a friend who manages >$10B in the Indian public markets. After a long discussion on startups and their potential, he asked a tough Q:
"Who is the next Uday Kotak (of 2005) from the ecosystem - someone who is ~40 today and has PAT of $50M now (or in the next 1/2 years?"
Heard from a Founder today:
"Yeh D2C sab Twitter ke liye hai...get a few crores of revenues online, make some noise, raise money and build the real business offline"
Got an internship request from a 14 year old. Claimed understanding of revenue models, cashflows, startup valuations and deal structuring etc.
Prodigy or pressures of a hyper competitive system?
My view - enjoy childhood. There is a lot of time to pursue these 'passions'
Message from a founder where we have been doing DD for 3 months:
"Silverlake has committed $2.8B in India without any DD...what are you doing for $28M. :). "
Seasoned VCs have always said that storytelling is the most important skill for a founder. I always argued for execution, domain knowledge, perseverance etc instead.
No more arguments after Flow.
.
@MyNykaa
appreciation tweet - most VCs missed and it busted many myths:
1. Founder age/background/social media profile
2. Tabs on horizontals will kill verticals
3. Capital is the moat in platform businesses
4. Multiple family member involvement
Insights and execution. Period!
In many family groups, I was surprised by the level of enthusiasm in congratulations on the fund raise news.
It subsided when I clarified that this capital and more has to be returned to where it has come from!!
Heard from an investor just now:
“The party is over. All we are left with are tired legs and a nasty hangover.
..and as the makeup fades and alcohol recedes, the hot ones don’t look as attractive”
A successful founder on why he has consistently resisted chasing investor defined metrics:
“An investor can change his mind, I can’t change my business”
Got many messages on the
@plumspeak
investment. Most of them were about how they thought well of the company and Shankar & team.
The best one though was
“looking different Abhay” with the picture below :)
There are two types of investors:
One focused on the fact that india is a $2000 per capita economy and the other on the fact that it is a ~$3T economy.
The first group is having a real tough time in today’s market!
The framework was created in a Goa bar by a bunch of ex-McKinsey consultants in 2018 (as a desi version of a skill will matrix) and the slide prepared by an analyst who went to HBS and is back at Sequoia India (the green is the firm colour)
Just giving credit where it is due :)
An LP recently asked the question - what does it take for a company to go public in India.
My confident response - ~100cr EBITDA
LP - In your 16 years of investing, how many startups have you seen achieving that?
My response - 🙈🙈🙈🙈
Just got a LinkedIn invite from a profile that reads:
Evangelist | Visionary | Strategic Alliances | Growth Hacker
Please!!! Let the headline say what you really do and rest of the profile suggest the above!
Was talking to an entrepreneur turned VC who said that the VC job looked easy from the outside, but is actually quite tough.
My response - it is something that is easy to do, but very tough to do well.
Feedback from a close friend that I couldn’t push back on:
“You VCs are no different from politicians. You jump in to take credit when things are going well for the co (thrilled/stoked to partner etc) but
go silent when things are not going well or co is facing criticism”
A request to founders/VCs trying to be more transparent about performance on social media - pls do not use phrases like:
1. Grew 3x
2. Reduced losses by 50% MoM
3. Improved margins by 20%
4. Will be profitable in 12-24 months
If you want to talk numbers, talk real numbers pls
Journalists are making investors look really shoddy….asking sharp questions that investors should have asked much earlier!
No wonder - arguably the best venture investor of all time started off as a journalist.
Two messages separated by 4 years - 37cr/annum to 100cr/month. These are most satisfying moments as an investor.
Congratulations
@atomberg_tech
@Shibam3
Manoj Meena
A founder who raised venture funds 10 years ago and is doing his IPO roadshows on what he would tell those raising today:
“If you are building the business for yourself (and not for investors or strategics) and want to go public in India, build a 100cr EBITDA business”
A very tough decision to say “farewell” after 11 terrific years is made somewhat easier as
@Sequoia_India
is in the best shape I have seen it in. Time to pursue my passion outside. Sincere gratitude to the founders I have had the privilege to work with, the team and my partners
Heard this about the 10th year reunion of an IIT batch:
Broader group discussion - Person X has bought a BMW
Smaller group discussion (closer friends) - X lived in his office in early years to save on home rent
Many stories of real struggle/sacrifice don’t get broadcasted
Click farms for DAU/MAU inflation
Bots/shell companies for revenue inflation
Own companies to buy and discount large receivables
Cuts from marketing spends
Dummy cos for recruiting services
2007 is being put to shame!
Have heard many webinars, panels etc on the future ahead. My conclusions:
1. No one knows. Everyone is reading the same stuff. No one can claim that they have seen anything similar
3. Most are projecting their inherent biases to predict a future, e.g., VCs are more optimistic..
Simple request to companies/founders to simplify communication. We get what you are doing. Say 2 instead of 1.
1. We are optimising teams to realign business priorities to accelerate long term growth.
2. We are cutting costs
$7.5T/$2T/$70B - market cap increase in US/China/India in 2019
China added a India and US added 3.5 Indias in 2019!
There has to be only one agenda for the country in the coming decade - Growth. Everything else can wait.
Heard something nice from a successful investor - “Companies that have grown with limited funding are stronger at the core. They are like plants in less fertile soil that have to dig deeper to find nutrients and develop stronger roots.”
#investingbasics
Q. How is more recent performance?
A. Great. June was 2x of May.
It took two more questions to understand than June was 80% below Jan.
It is great to be positive but best to be direct - ‘pandemic crushed us but we are now recovering gradually’ is a totally ok answer.
~$9B of revenues (thanks to B2B commerce) and ~$4B of losses.....and these are some of the best we have. We have collectively massively oversold the India promise and lost focus on real metrics and value. Time to 'Get Real'!
One good advice I got early in my investing career:
Think deeply about why any investment was made by a VC firm; but if you want to sleep well, don’t think much about how they got to the valuation.
Met a bunch of investors over the weekend and everyone is feeling good about their picks. Very few of them felt similarly five years ago. Most felt that they have learnt a lot in the recent past.
The market never gets enough credit!
So far, we were telling our LPs that public markets are not competition for the late venture/early growth segment. Today a 100cr revenue company also threatened us with an IPO during negotiations!!!
Was super happy to notice a founder running a very profitable company, closing a funding round of $150M (mostly secondary), negotiating down the cost of a service from INR 6 to 4.5 lakhs through multiple negotiations.
May this tribe grow and multiply!
Is
#RelianceJio
fund raise ($11B) next only to
#DiDiChuxing
(~$21B) in terms of total capital raised by any private company in history?
What makes it more stunning - done in one round spanning a few weeks. And certainly not done yet!
Captain cool, you have inspired and given joy to so many Indians. Your calmness, grit, determination and humility are characteristics that all should aspire to learn from.
@msdhoni
thankyou for your contributions and best wishes for the future.
All investors in public announcements:
“Delighted/stoked/thrilled/humbled to partner with ABC in their journey…”
All investors in private conversations:
With 3+ months of ongoing fund raising experience, it is clear what is most appreciated by those raising:
1. An engaged discussion (which requires pre work)
2. A quick Yes or No
Important to remember irrespective of which side of the table you are.
In the budget week, have heard many complaints of "how we pay high taxes and get nothing in return"
I just remind people - most are products of a highly subsidised, government funded education system that got you to a position of paying high taxes...help others get there
It is an important milestone for
@A91Partners
(first anniversary of the business) and it is nice to receive warm wishes from friends who have played an important role in our journey.
Thank you
@Sequoia_India
One request to all founders/investors - please use Net Revenue (post discount, returns and GST) when talking about monthly run rates. It gets very confusing at times with different metrics being used.
Our efforts to make accurate 5 year plans for young companies appear more ridiculous when
@salesforce
that is covered by hundreds of analysts beats quarterly estimates by >100% 🙈
Time flies....it has been three years at
@A91Partners
While there are always ups and downs in any new journey, on the balance, it has been a fantastic ride so far. Past memories and credentials fading and new goals and aspirations looking closer.
In the middle of ‘India love’ from LPs, a tough Q that left me thinking:
Name a few companies on the path to $500M of gross margins assuming that is reqd for $5B+ outcomes,
If the list is small, why do many companies raise more than $500M….won’t returns be mediocre?
Watching passengers get up and reach for their bags as soon as the flight lands reminds me of a British airways pilot’s announcement - “pls remain seated till we come to a complete halt as in my twenty years of flying, I haven’t seen a passenger beat the aircraft to the gate”
As they say, "It takes a village to raise an athlete" I'd like to thank one of my well-wishers
@Abhay__Pandey
for his support & for believing in me. 🙏🏻 I hope to inspire generations to come, & also urge other HNIs & Corporates in India to support athletes & the sports ecosystem🇮🇳
Every investor I meet says valuations are crazy but investments keep happening every day.
Simple conclusion - each investor is making sensible investments, others have gone crazy!
Hearing multiple cases of ‘inflated’ revenues in companies.
When GMs are very low/zero, manufacturing revenues is simple.
Finally, time for investors to look below the revenue line.
Congratulations
@i_sakshichopra
and
@Sequoia_India
Nice example of helping build a company quietly and taking it public
Total primary capital in - $23M
Duration of investment - 6 years
Market value at close today - >$2B
Glad that there are no headlines shouting 'unicorn'!
Today's IPO marks a milestone in
@indigopaints
journey that tells a tale of courage, conviction, and outstanding performance. We
@Sequoia_India
feel privileged to have partnered with
@hjalan_indigo
in this dream run
@gvravishankar
May the next few decades be even more glorious!
I asked a successful entrepreneur about the most important thing he looks for in a potential business partner.
His answer: consistency of words and action.
An exciting 5 years where so much has happened - from covid to peak bull run to the present calm in the private markets.
22 founding teams and a small, "well dressed" team - so much to be grateful for!
We turn 5 today.
Lots of gratitude from all of us to Founders who chose to parther with us, Limited Partners who believed in us and well wishers in the ecosystem.
Looking forward to the next many.
A long overdue catch-up. While we spent a lot of time chatting about the fun times in the past, we also spoke about future opportunities and the way ahead.
@singh_sequoia
Heard an interesting take on changing investment strategies of firms:
- Venture firms are looking more towards the 22nd century (moving from consumer internet etc to AI..)
- Growth equity firms are going back to the 20th century (moving back to manufacturing and offline)
100cr per month - a nice milestone in a long journey. Congratulations Vini Cosmetics. Privileged to be a part of it. Over to
@anjana_sasi
and
@gvravishankar
for the next one.
Thanks for the mostly positive messages. Summarised responses:
1. How much: Giving is function(liquidity, gratitude, connect). No right number
2. Is this the best use: don’t know. It is one of many
3. Is money sufficient: No. Time is more helpful. But it is a start
#iitb
The 1993 batch of the Indian Institute of Technology Bombay has pledged Rs 25 crore, the highest ever, for the betterment of the institute. The highest contribution of Rs 10 crore came from Abhay Pandey, general partner at A91 Partners
@Abhay__Pandey
All investors looking at other’s investments - valuations are crazy!
All investors looking at own investments - our investments are sensible except one unique situation.
In summary, 2021 will be a tough vintage.
Most brutal description of a VC role I have heard. Trust
@akm1410
to make it real!
“VC investors don’t lead very exciting lives. After all, there’s only so much joy one can derive out of spending rich people’s money and then being held accountable for it years later”
It has been 3 months. Excited to gear up and build
@A91Partners
. It will be a tough climb but we are prepared as a team.
Thanks again to
@Sequoia_India
for the amazing support over the years. I am certain we will collaborate soon.
A very tough decision to say “farewell” after 11 terrific years is made somewhat easier as
@Sequoia_India
is in the best shape I have seen it in. Time to pursue my passion outside. Sincere gratitude to the founders I have had the privilege to work with, the team and my partners
A good joke I heard just now:
"Two VCs are meeting for half a day to fix problems being faced by a common portfolio company"
...if only VCs were that capable! Also feel for the founder on whom their brilliance will be thrust upon.
Usually see a lot of hype around Unicorn status.
@StarHealthIns
started in 2006, has got to ~$3.5B valuation in private markets and didn't see any social media celebration around it!
There are quite ways of building value too.
When you lead a ~500x growth in business valuation, you deserve a
#Founder
tag!
62% CAGR in profit growth over 11 years - hats off.
Well done Rajeev. Well deserved recognition.
In 2007, we as bankers pitched a $8-10B IPO valuation to a company. They wanted $25B. As bankers our job was to try. The market cleared the price and the stock traded up 50%. Today, the market cap is ~$10B.
Current market feels the same. You can demand a valuation and get it
Looking back at all the plans made in jan/feb and current situation reminds me of these lines:
“शीशे के मकान तुमने बना तो लिए ए दोस्त
लेकिन वक्त के हाथ में पत्थर नहीं देखा”
Spoke to a bunch of friends on whether they are actively looking to invest and most answers were predictable:
Yes but more cautious
Going slower
Looking but tough to diligence
Bar is higher
The one i liked the most:
Not unless we find a company that has found a cure😂
Last week, we saw a crowded hotel lobby with lots of ethnic wear. I asked what it was and my wife responded - this is 'Dekha-Dekhi' for marriages.
Yesterday we saw a crowded lobby with young folks and she asked what it was and I said - this is 'Dekha-Dekhi' for VC investing.
As more FY22 results get filed, the disconnect between numbers and valuations is shocking.
It is clear that valuations are way out of place. Near future is about growing into those valuations and removing all distractions caused by valuation focus...maybe ban the term unicorn!
Both private and public markets have the same playbook to inflate valuation -
Keep marking up your investment with self/friends and family rounds and hope that some large unsuspecting investor will fall for it.
Heard from an investor:
you can buy high quality at a high price or poor quality at a low price
महंगा रोए एक बार, सस्ता रोए बार बार
It is a choice between one time pain and continuous pain :)
A lot of business discussions happen on WhatsApp. In fact, most boards have a WA group. Often times the co/brand name is the profile pic. One founder put this as the profile pic - keeps all of us focused!
India was no different. Luckily funds like
@SaamaCapital
@DSGCPvc
@firesideventure
led the way in the early days and now many new funds are beginning to chase consumer deals.
When I congratulated Manoj and
@Shibam3
of
@atomberg_tech
hitting the 50cr/m net revenue scale, their response:
“We are barely scratching the surface”
The ambition and focus of young founders is truly inspiring. And the size of the India opportunity keeps surprising us!
Not seen a greater divergence between the optimism of the ‘new economy’ players and the gloomy outlook in traditional businesses.
Is it a case of not knowing how difficult it is to make profits or too much of short term thinking?
My status after 3 days of no work:
*ये बेफिक्र सी सुबह , और गुनगुनाहट शामों की ...!*
*जिंदगी बहुत खूबसूरत है , अगर आदत हो मुस्कुराने की ...!
Wonder what it will be after 3 months!
Please don’t call it tech...maybe there is another name like tech impostor or tech masquerader that is right for real world businesses that get valued as tech in the private markets.