Past Perfect, Present Continuous!
Venture Highway (VH) is 9 years old and we are young in an investing world, known for its excruciatingly long feedback loops. As the year draws to a close, I reflect on our journey against the backdrop of bull runs, Covid, bull runs again, global wars, bear runs – some important lessons and stories of personal growth!
When I joined VH in 2018, just after exiting my start-up, I felt like having moved straight from the factory floor to the corner office – why? Suddenly everyone was accepting my LinkedIn invite! Little did I realize then, the high mental agility and execution chops required to be an investor, especially when Venture Highway did and continues to operate like a Startup masquerading as a VC (This is our real tagline!).
The last 5 years have been ‘coming of age’ for VH, as we earnestly went about building the institution, trying to move the center of gravity from the “people behind it” to the Organization!
The foundational question: Why should founders take our capital?
We are paranoid about this question, however, not for the most popular reason that one shouldn’t miss the next ‘AirBnB’ or ‘Google’! Large outcomes, after all, are an output metric, even if the most important one in Venture math. Our real focus has always been the ‘process’ – how we show up, how earnestly so, how soon, with respect & integrity. One example is our commitment to ‘high ROI for founders’ time’ (Yes we have an internal dashboard that measures #days from 1st engagement to saying “No” or “Yes”)
One incident stands out in memory: We had to, with a heavy heart, bow out of an investment, and did so within 24 hours. In our 1st 3-hour marathon session with this highly experienced founder, we felt the chemistry and shared a deep empathy towards the problem statement. This depth of engagement also made us realise, unfortunately, that some slivers of the offering could compete with an existing portfolio, in the future. “I would have loved to have you guys on board, but a fast “No” is something I value even more”, he said.
Sometimes our real wins have been great founder relationships, even if at the cost of a deal!
“How do you win deals against the popular names in your industry?”, is an oft-asked question by our LPs (Limited Partners). Our answer: “We don’t play the brand card, we play the ‘see our work’ card”. Some of our most cherished investments have been so organic that we failed to realize the line when we crossed over from being “brainstorming partners” to becoming an investor. However, this style comes with its costs, the most expensive being when, after the engagement, we still miss the opportunity to partner with these amazing founders. Yes, we feel absolutely gutted when it happens, fortunately very rarely so, but we would never change our ways – ‘GoodWill’ cannot be hunted after all, it has to be earned!
Part of acting like a startup requires us to reimagine the venture landscape ever so often at a foundational level. Nurturing and growing young talent for the startup ecosystem is one such foundational aspect, we are committed to contribute towards. In the last 3 years, we have had the privilege of working with 37 amazing Student Venture Partners (SVP), students from the country’s marquee institutions. These young girls and boys were part of our structured 8-week ‘all you need to know about startups’ SVP program. At the end of every season, our favourite question to these folks would be “Why consulting and not a startup?” Their recurring answer: “We did not know much about the startup ecosystem, until this program, but consulting is well understood and seniors can help us”. We aim to change this and help young talent discover the world of startups and starting-up early on: after all, two of our portfolio companies were started from dorm rooms!
What is a business, if not its people! One of our trademark questions to founder teams is “What collective skills & attributes solve for your individual blindspots?”. It applies to VCs as well – each of us a product of our biases, heavily weighted lessons from the last failed or successful investment, some of us more intuition-first while some analysis-first. When I look back at all our VH team interactions over the last many years, our diversity covers for our individual blindspots. One of my biggest lessons as a leader is that radical transparency starts with You and being comfortable showing your vulnerability to your team even if it is saying “I was wrong”. At VH, we have always celebrated owning our mistakes and being able to rely on each other’s intellectual and moral support. Safe spaces inside and in our Board rooms, in our view, are fundamental to authentic conversations.
Specifically, as we look back at 2023, perhaps the most excitingly tumultuous year in the history of the world, the Venture ecosystem was also deeply impacted. As Ray Dalio says “the best lessons are learnt in painful situations” – the lesson being valuations, investments, and funding climate are and always will be the variables behind that single constant: that one idea/technology that would be the foundation of a sustainable enterprise, structurally strong and deeply impactful. Anchored with this 1st principle belief, VH has invested in 9 deals in 2023 across areas in fintech, AI, manufacturing tech, and SAAS to name a few. Rajit Mehta, MD of Max India, one of our panellists at our recent founder’s event, which brought leaders from bootstrapped, family businesses to exchange ideas with our funded startups, said “As a business, we think of survival and that we are here to stay, this drives many of our business decisions”.
In a social media world that rewards black & white opinions, the reality of the nuance is often lost – painful corrections are part of evolution and only lead to stronger foundations.
If I were to summarize one big lesson in all these years, it is that:
As an investor, one needs to have loosely-held opinions and very tightly-held values
In this context, while one cannot necessarily model out the bull runs, pandemics, wars, and bear-runs etc. etc., what will always stay is the founders’ thirst to create, innovate and impact. In this world of Creation, as VH learns and grows, we would continue striving to become the most ‘mindful and conscious’ partner to these visionaries.
2024 here we come…