‘Pune’s role as a startup hub will only get bigger in coming years’

What is the percentage of startups in your overall investment portfolio?

Startups currently represent only a very small part of my portfolio. However, I can increase my share given the performance of my portfolio. About half of the companies in my portfolio are in various stages of fundraising in their next cycle.

Any success stories from Shark Tank India Season 1?

My solo investment in Rare Planet is the biggest achievement of Season 1. When they launched Season 1, they were in four stores with ₹70 lakh sales per month. Since then, their scale has increased 8x in number of stores (to 32 stores now) and their sales have increased 6x, to ₹4 crore per month. This activity proves that social impact and profitability can coexist.

For the rest of your portfolio, how do you allocate the money between assets – stocks, debt, etc. ?

A significant portion of my allocation is in equities, with debt making up around 10% of my overall portfolio. I am a value investor with a long-term view of my equity investments.

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How do you monitor your portfolio companies? How often do you engage with them?

I wouldn’t call it oversight because I believe in empowering founders and letting them know I’m available to them when they need me. That said, I try to schedule meetings with the founders if I am traveling to the city where they are or if the founders come to Pune and I am there as well. I have a team that regularly connects with the founders, gets quarterly updates, and helps them with marketing, finance, distribution networks, recruiting, and fundraising.

How long is a typical outing for you? How long do you stay with an issuing company?

I’m one for the long haul once I’ve invested. It takes several years for an entrepreneur to evolve and get on the path to profitability. I believe in staying with my founders for the long term and helping them succeed.

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Do you try to diversify sectors or choose companies closer to your own field of activity?

I am a 4F investment executive – Founder, Foundation, Finance and Fit. I developed these concepts in my book “The dolphin and the shark”. As long as a company falls within this framework, I invest in it regardless of the sector to which it belongs. However, I am especially excited when I see presentations in the field of health and presentations by women entrepreneurs.

How long do you have to evaluate a pitch before it is presented to you on the show?

None. We don’t know anything about the companies in advance. Once the founders walk through the door, we make our decision in an hour on average. This is, of course, followed by a structured due diligence process.

Once you made an offer, were there any occasions when you backed out?

Most transactions are accepted. The only ones that aren’t are when the team discovers something during due diligence, which brings out facets of the business that weren’t apparent in the original pitch. Also, often founders want to make deals that come to them after the show airs, where their company gets a significantly higher valuation than our offer on the show.

What is your IRR (internal rate of return) on your start-up investments over the past 5-10 years? How does this compare to your other investments?

Too early to calculate the IRR. So I can’t comment.

How do you see Pune’s role as a startup hub?

Pune is already home to several unicorns including three – FirstCry, XpressBees and GlobalBees – founded by my friend Supam Maheshwari, whom I interviewed in my book “The Dolphin and the Shark”. This momentum for startups will only grow in Pune with easy access to the right talent, presence of high-quality R&D infrastructure, and availability of a good ecosystem of mentors and incubators.

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