CRED Investor Explains Mind Blowing Views On Startup Ecosystem!

80 85% of consumers do not buy the cheapest product for each of those companies to give you 150 crores or 200 crores at 5% ownership it means you have to exit all of those companies at a valuation of 4,000 cror India is not the market for the outsized returns that you can probably let's say get in the US if you believe or if you do not believe that a brand plays a role in your decision making nine times on 10 you're not thinking right so let's say the company's reached that point they've raised three to 5 cres from you what do they raise next how much should they raise next the Unicorn founder tells me that bro 2 years ago everyone's being Valu at 40x if I didn't take a 40x deal I'm the idiot I don't fall the founder early investor actually don't even follow the guy who probably gave that valuation at that point of time for the first three to four years of a company's life a Founder genuinely needs a lot more of your time the kind of money we are offering is not earth shattering a lot of Founders who raise half a million dollar from us can actually easily raise $2 million from somebody else but they're kind enough to raise that money from us because

ladies and gentlemen welcome to yet another episode of the numbers game today I have somebody who's a little bit more low profile in the media but actually fairly well-connected and pretty Central to the Indian startup ecosystem his name is Anu thanks R thank you for having me first question right

how did you get started doing this like did you have like an Angel Investing career uh you know what's the path and what do you do today like how do you describe your job uh like everything else in my life I think this happened um mostly by chance um so I started my career in banking I was um an investment banker when uh a random LinkedIn Post in 2012 uh took me to at that point a completely unknown asset class called Venture debt uh this was Silicon Valley Banks India business uh it intrigued me I went and met um the people running it a and venod loved the conversation and somehow and working with AJ and venod was an interesting opportunity it was also the time when the Indian Venture Capital ecosystem was just about to take off so V was an interesting break because um for me I kind of come from a tier four or maybe tier Five Town had limited uh um to zero exposure to the startup ecosystem in my prior life so every single day was interesting getting to meet entrepreneurs U trying to change the way the world Works um most of the times I wouldn't believe them uh which helped because uh Venture that works on um significant amount of risk mitigation but helped me build a network um which was very useful uh in my future life uh one of my early when Venture Deb bets actually my second Venture de bet was a company called free charge uh which is where I happened to meet Kunal and my current partner sandep um and early um early relationship of asking a lot of questions to free charge two years hence free charge got sold in 2017 I decided to shift from Venture debt to venture capital moved to s uh bash um but one thing led to another and couple of chance conversations with sandep uh led me to move back to Mumbai s was one of the co-founders at free charge sandep and Kunal were the co-founders of free charge and sandep and I uh after the exit to snap Deal started actually having more conversations around uh the early Genesis of what we tried to or we are trying to build a whiteboard uh started in 2015 2016 um and it came out of um a coffee conversation with s um so 2018 is when we eventually uh started with whiteboard and yeah now it's been almost six years whiteboard came out of an idea that uh

both of us very firmly believed in um and we felt that um fund like that uh could be interesting for India uh there weren't too many uh of the sort at that point of time and maybe we'll um come to that subsequently on on how we thought of uh whiteboard a little differently but yeah I think that's quick answer to how we got started how much did you guys raise at whiteboard so fund one uh was a 77 CR uh or at that point of time what was almost $10 million um at currency we then raised a fund 1 a uh because some of the fund one companies um did significantly well so we needed some more Capital to fund and we've just closed our second fund at 300 cres wow uh so yeah I think that's between the three funds put together we would roughly have around 450 odd crores of Deployable capital of which fund one and fund a are almost fully deployed fund two is something that we're currently deploying wow so you guys started at a $10 million I mean um a 77 CR fund now it's like nearly 300 crores so it's like it's been a step up for you right yeah interesting tell me one thing Anu what is I mean what do you do on a daily basis so I think at whiteboard I would say if I break my normal day down uh 65 to 70% of my working day uh is spent working with portfolio Founders uh typically it would start normally at 8:30 9 uh with some up conversations uh very quickly moving to some fire in some portfolio company uh which we're trying to solve uh but by Design we are focused more on the building part and lesser on trying to find the next bck thing or Prospect the next big opportunity we've um we've been lucky that I think uh deal flow uh hasn't been such a major problem for us and that help significantly because you're able to actually focus on doing whatever is needed in a business whether it is hiring a new resource finding a co-founder solving a specific issue working on digital marketing whatever the issue may be but uh I would say not just for me but for most of the team uh I think 70 75% of our day is spent on portfolio related stuff and the remaining 20 25% will probably be uh speaking with prospects trying to uh meet investors co-investors Partners um investment bankers in some scenarios uh or at board meetings Etc but that's broadly how I think most of our days are how does one go about raising a 300 CR fund people in the audience might think it's all you know the money of the VC himself but actually you're raising money from other people you have depending on how large a fund you raise you have a specific set of uh investors or LPS or limited partners as we call them who are

willing to bet on a strategy uh with a GP or a general partner to so you are a GP I am a g sandep and I are the GPS and we have a whole lot of LPS whove trusted us with their Capital so about 100 people 200 people something like that uh yeah so I think for in our case I think it'll be probably 50 55 but it could be it could be any number but those investors then provide you with uh so basically you make the same way uh Founders pitch to us uh for fundraising the same way we pitch our strategy uh to those LPS uh so LPS at the upper end of the curve could be anything from large Global endowments to uh to large um uh Global multilateral organizations like IFC to domestic institutions uh like sidb people who've uh who are who have enough um Capital to uh deploy in this extremely risky uh asset class uh and there are kind of two different formats you could have a global offshore fund or you could have an onshore fund like we do where it is approved uh it's a uh alternate investment fund approved by sebi where every single investor has to at the lowest uh contribute one CR uh of capital uh which is again driven by um uh se's uh investor protection regime where they want to ensure that anybody who invests in this extremely risky asset class has enough Capital uh so that even if this uh goes to nothing uh the investor understands the risks associated with the investment so I think that's broadly how you kind of end up um raising a fund interesting so I'm going to say some very stupid things right um let's say I was a VC for a second and then I'm talking about early stage right I know there are multiple stages you have early stage where you know you're investing on a whiteboard idea then there's a series a where the company has demonstrated some traction true then you have you know the later stage as you know the company proves more and more things right so a I want to know how those stages work but B let's say if I was a VC yeah early stage VC one strategy that I've seen all these early stage VCS do is okay I have 300 crores I put one 1 CR in 150 companies and then I keep so 150 crores I've spent the other 150 crores I'm keeping in my bank as Reserve where if one of those because 90% of those companies will fail let's say 5 10 of those companies do very well I have the other 150 crores to keep pumping in their future rounds to maintain my ownership lots of people call this the spray and prey strategy right but you're not a big fan of spray and prey yeah right so I want to know uh what is the mistake that many spray and pray investors are making in your opinion instead of commenting on their mistakes I think let's kind of look at it first principles and why we started white board in the first place right and going back uh for us it was important um it is important to be a part of their Journey with a Founder uh where the thesis uh the space the founder is building in and we've uh been crazy enough to invest in in sectors in spaces um where convention wisdom um uh would necessarily not suggest that an outsized return is possible and if you look at a strategy right a fundamental investing strategy comes from a point of view of if things go to plan what do you expect to get out of it our thesis and where it differs from um uh some of our peers is that India's not the market for the outsized returns that you can probably let's say get in the US there are some fundamental structural things about India uh which make us for ourselves uh question um our ability to generate those kind of exits and and let let's take the maths up right so in conventional logic let's say I was to invest 1 CR in 150 companies and my assumption starting out is 90% of those companies would not play out which means 135 crores Gone the remaining 15 even if I assume that I invested in each of those companies at a post money valuation and post money valuation of 10 crores means I own 10% in each of those companies which byy the is very generous from an ownership point of view it's very difficult to get that kind of ownership today uh with high quality Founders uh but even if I was to play along with that argument uh the broader expectation is that every single company that works out for you ends up giving you 150 200 250 crores as a return now company be earning 10% at Inception High probability by the time an exit event comes around uh because there are subsequent rounds that happen in the company you would be diluted down to a 5% or 6% uh now for each of those companies to give you 150 crores or 200 crores just for easy maths at 5% ownership it means you have to exit all of those companies at a valuation of 4,000 crores till date baring companies that have gone public and flip cart I don't know if any other company in India has given that kind of like has has had a cash exit of greater than a billion dollar for the investors if I keep Flipkart out and the technology companies that have gone public and the outliers like free charge and all the others even free charge was a $400 million exit it wasn't a billion dollar exit uh snapd bought it for $400 million it wasn't billion and $400 million for the whole company so an investor would have received a percentage of it depending on how much they owned and how much they had invested uh so our investing thesis comes out of our belief that we are not sure if that match necessarily holds up in the Indian context and I'll also add a couple of qualifiers here that we've by Design chosen to invest in a few sectors that are not necessarily the most um lucrative for exits crazy in terms of growth I think they're lucrative for exits for example consumer Brands is one of the places where India is probably seeing the maximum number of exits but the amount made per deal may not be that high but they are not necessarily or crazily spoken about companies because an exit may even be a $200 million exit or $150 million exit if you think of it in real Indian money context 1,000 CR exit is not bad but when you are investing in many companies hoping to get 150 200 250 crores from a single company it is not enough it is reasonably hard to get that outcome until unless the outcome itself is 3,000 4,000 5,000 crores in cash because what I'm not counting here is exit through stock um exit through any non-cash means because that still doesn't come back to you may get shares of another company which may be valued significantly higher but at some stage that stock has to convert into cash for you to return to your investers so for us the strategy has been to go deep on our own conviction on the space uh create enough reasons for us to want to back anybody building with the right parameters in that space and then work closely with the uh with the founder to try and make it happen but um the multiples at Exit we work with are reasonably subdued because for me I'm happy to put 5 6 7 8% of my Fund in a single company so you're saying you're okay with putting let's say about 25 crores in a company if you think it's going to win over a period of time yes I would probably start with a 3 to 5 CR check but if the company is showing all the right signs to me uh I am more than happy to double down on that company so that um see this business right is also all about ensuring that if you know you have a winner you bet hard on it because you do not want to miss out on ownership in that winner uh in favor of a company that may or may not play out so if in uh 18 24 30 month period I find a portfolio company to be uh in significantly top desile of not just my but my co-investors portfolio as well it makes all the sense in the world for me to stay invested for longer uh rather than try to look for a new deal at that point of time because uh doesn't happen very often and that's the reason why we were willing to take fun to all the way up to 300 crores uh largely because I needed to I wanted to ensure I have enough dry powder to keep investing behind winners as in when those winners come through rather than losing my stake at the cost of dilution because I did not have Capital to invest which is uh one of the um one of the issues I faced in fund one so I wanted to ensure that if I was getting uh to go to 300 crores thanks to uh the trust of LPS it made a lot of sense to go to that number so that I have higher amount of dry powder to put behind my winners as in when those companies start proving out their potential so and tell me what you so you guys are a very early stage fund let's say you guys comeing at the earliest stages so you're putting roughly 3 to five crores check in a company and then like let's say about 50% of your fund you're deploying and the other 50% is just Reserve so in fund one we ended up deploying approximately 65% uh in the first check but that was also because the fund size was significantly smaller fund two uh of the three so the way again the VC maths works right is that of the total fund raised there is a portion of the fund that goes out as management fees which fundamentally means that money is not invested but it goes out to the fund manager or fund manag that's 2% a year uh yeah it is between 1 to 2% um so I think if I take let's say again 300 crores of 300 crores in our case approximately 30 crores because we are at a 1% structure uh 30 crores will go out uh and will not be invested 170 crores is the amount that will be invested of the 270 120 is what we will invest as a first check into companies and 150 is what will be kept as reserves to be invested into any and all companies that perform uh as per our standards set by those companies but yeah that's the rough match so 120 first check 150 follow on and 30 crores of approximately 30 crores of management fees and roughly in every new uh company putting 3 to 5 crores so it would be yeah so in fund one that number was smaller but yeah in fund two the numbers move between I would say 2 to four five is an exception for us but two to four crores is what our preferences as I said earlier almost all of our companies are at pre- Inception pre-product ideation stage when we come in so at that point of time for the 2 to four CR we able to get meaningful enough ownership for us to want to work with the founder to try and make the company or business more successful yeah okay

tell me one thing this is you are an early stage fund yeah and I assume there are funds Beyond this yes so your responsibility is to take the founder to what Milestone and then what are the Milestones beyond that I think the first uh and the most important responsibility is to work with the founder to build a product that works because as I said we come in a pre-product stage so having a minimum viable product whether it is in consumer Brands Financial Services technology B2B whichever sector there is a so typically what we do when we invest is we uh create a document internally uh and agree on so there's a commercial term sheet uh which for us is a significantly simpler document but this second document that I'm talking about where the strategy of what are the success metrics that we have to hit uh in a period of time are the ones that actually take longer for us to agree with the founding team on uh and those are more important for us than the commercial terms where uh we work with the founding team uh we share our thesis they share theirs we we've now so we've come to a point where we've decided to invest in a business so at that time we would actually sit down with those Founders and put down our definition of what success will look like now in some businesses uh it could be what is called Product Market fit uh for the product in some businesses we explain that for the audience yeah of course so um so for a business to get to a point of scaling with additional Capital you need to prove that whatever you've created whether it's a tech product or a physical product is needed in the Market at the price that you're selling and people will willing to pay for and people are it at a reasonable scale so for example we funded U men's inware brand in 2018 October by the name of the mench um where our conversation with G and anurag was all around at what scale of return on ad spend and what basically means is if you are if you're a website uh you typically spend some money uh marketing over Instagram over Facebook over Google to try and bring consumers to come and try your product out uh so on every 100 rupees spent if you're able to get let's say 200 rupees of Revenue uh from customers through purchases it means your return on ad spend is 200 by 100 which is roas of two so we had an roas number in dious case which was one of the success metrics uh given underwear is not a very high repeat category people buy once but not come back again people no people typically would buy like it was after a consumer service we realized that we would customers would buy twice a year because we used to sell our biggest selling SKU or stock keeping unit was a pack of three which means if youve bought two packs of three or six underwear in a single shot high probability your next purchase will only come three to four quarters from then so we couldn't put repeat as a and again if I was to kind of uh compare that to let's say Tria which is a subscription hairfall Solutions company there the core metric for us was the repeat metric that if you bought the first kit how many customers are buying the second and the third and the fourth uh because it's a subscription kit the customers belief in the product is only evidenced by them buying the kit again and again so to come back uh to the question right so in every company we would put together these success metrics which to us are the primary responsibility where it's an arrangement between us and the founders that first we to achieve this once we achieve this then we will figure out what the next Milestone should be and typically you would take anywhere between 6 to 18 months depending on so in a hardware company where you are actually building a fairly sophisticated Hardware product um you would maybe take 12 15 months to first get the product Out and because in Hardware you have to be very right with your first launch itself so you give it enough time before you bring it to the market whereas in a demen or a tria you may have a faster path to Market but your success metric may be different um but uh as you mentioned earlier right so there's a bunch of investors who are typically right after us uh who will invest in businesses after they see early signs of a product Market fit uh so getting the company to that point and ensuring that you are able to within the broader realm of investors partner with the right investors um and uh given of been around in the space for now 12 13 years have a reasonable uh view uh correct or incorrect doesn't matter but I have a view on for which kind of companies what kind of investors uh probably make more sense than others because uh we've seen investors invest in all kinds of stuff but we've also seen investors who've been more helpful Vis less helpful for certain types of businesses so um so I think our as I said primary responsibility is to get to early signs of pmf try and see if we are able to bring additional Capital into the business to get to the next level of growth doesn't a responsibility doesn't stop there but that's kind of the first step uh at which point we are able to confidently state that something in this business seems to be working and then you obviously keep building on top of it because uh Building Company right is is a continuing process of improvement so uh so you keep changing your uh success metrics as you go along but defining those success metrics actually I think is or right is I think uh one of the biggest things that we try to bring to the table to ensure that between the founders and us there is this there's complete agreement on where to get to so let's say the

companies reached that point theyve rais three to five crores from you what do they raise next how much should they raise next let's say it's a d2c brand so in a d2c brand you typically the next round would be anywhere between I would say one and a half to $3 million so anywhere between I would say 9 to 20 that's a seed uh so seed prea so there various terms that you typically would use and as I said depending on the stage at which the company is you would you if they if they've shown more progress than you expected the round will be closer to 2025 crores if they've shown lesser progress and you would have liked the round could actually be between 8 to 12 crores um another key Nuance about d2c brands for example is that d2c brands are high margin product sales which fundamentally means that business intuitively should need lesser Capital to scale and what I say when I say lesser it is relative but lesser as compared to a consumer play or a hardware player so if I was to uh compare a DCH and a mintra uh mintra is a platform which is trying to bring significant amount of traffic to the website um it would need a lot more Capital to bring meaningful enough traffic whether it's a mintra or a Nika or a first cry or any of those Marketplace plays because they are uh one of the core metrics for them is the traffic that they've been able to bring to their websites and how much of the traffic converts and how much sales are they able to get so for them traffic is an important parameter whereas in um on the demen website uh traffic doesn't matter conversion matters uh what campaigns are working matters as I said earlier return on ad spend matter so a d2c brand because you have between 65 to 85% gross margin on anything that you sell in most d2c brands uh the amount of capital you need to scale up to a certain size should not be that high because thanks to all the innovations that have happened over the last 7 eightth 7 years with uh with website creation being eased out with g2c payments being streamlined with a whole bunch of you don't have to do any of the hard work you don't have to create it for yourself there are enough tools available which you just plug in if your product works and consumers need that product at the price point you're selling it at that should be the only core thing you should be focusing on can I ask you your digression here of course do you think like d2c at least and actually many other spaces do you think it's becoming more about brand than anything cuz even the product technically can be commoditized no or has started becoming commoditized let's say with earphones right there are like 50 manufacturers from China you can reach out to on AliExpress and they'll deliver for you and same with d2c products right I'm sure the some moisturizer is a I mean if you do 10 minutes of research you can find who's the supplier then it's about packaging and the brand so academically speaking right um d2c should always have been about the brand uh and and again let's keep d2c side for a second let's think of our purchase behavior in general 10 years ago 15 years ago there was no d2c but even then when you went to buy a t-shirt or pair of jeans watch you always bought a brand that you liked and you felt was appropriate for you when you are a colleg goinging student uh a different brand uh feels right for you when you are in your 30s a different brand feels right for you but you're always shopping for Brands so if you think of it whatever form of product Commerce you take there is and this is not India alone right the world over there is significant premium or value that is placed on the brand how the brand is built so see d2c is only a channel uh I can choose to sell this t-shirt on the Whiteboard website I can choose to sell it onaz sell it on Amazon I can choose to set up a store outside and start selling it I could choose to take place in one of the malls in koramangla and end up selling it there but what you'll come to me for is the name if you feel whiteboard is aspirational enough whiteboard has communicated something to you which makes you believe that I need to own a white boot t-shirt is when you will come into my store so and it's not just in commodity as or commodity type spaces as you said in in earphones right in every single category of d2c Brands um it should always be brand first and that's where the dichotomy starts brand building is a process of patience venture capital is all about impatience M finding results fast brand building is a gradual process building trust takes decades yes because by spending $30 million in a month you're not going to make me believe your proposition that easily until and unless there is some element of trust aspiration that you are able to communicate along with that very strongly the capital you spend is only a means to an end so that's where for but I tell this to many consumer brand Founders right uh a consumer brand company starting with a significantly large fund raise eight times on 10 in my view will go through some issues later in their life if there is too much money early too soon because there are things about that business that you just cannot hack with extra Capital it takes 5 10 years to build that brand anyway yes and if you think of it as a consumer you're able to see why like trust is not something that can be bought by buying all Holdings on a road that is not how trust manifests trust has many layers depending on the category you're selling in but if you inherently understand that it will take time only then will you also understand that the biggest raw material is actually not Capital but the thinking behind why the brand needs to exist why should a consumer move from um their existing underwear comp existing underwear company to demen or their existing natural product to Nat habit or their existing Fan company to atomberg uh or their um or their existing skincare regime to a different skincare regime see each one of those are shifts in consumers view towards the better so you're saying ultimately you build a brand because you're trying to shift a consumer behavior and you only make real money when you shift a consumer Behavior so saying all of the entire Venture Capital game is purely about shifting consumer behavior in a way that benefits your company so I wouldn't say shifting consumer Behavior I would say giving a consumer something that either has not been given earlier so some differentiated product either some differentiated product or some differentiated positioning uh to kind of as I said I'm if I take brand examples right atomberg came into a reasonably commoditized fan market and offered initially as a B2B prodct a fan that saved electricity now intuitively speaking you would believe that fans are not such a big energy guzzler why should I care all of a sudden you come in with a technology play where you've said that I have made a brushless DC motor which ensures that this happens and fans the product especially in the hotter markets you use lose a lot of now all of a sudden atomberg when it shifted The Narrative to energy saving as a feature for a fan everybody else followed suit the much larger Brands uh started also following suit with their own energy efficient products those companies had been in existence for decades and it is not that they couldn't have introduced the same thing it is just that probably the felt we're not sure if this needs to be introduced atur came brought in a very significant change to the market Dynamic all of a sudden consumers started gravitating towards that and every other old school brand also had to innovate and come up with offerings of their own um and Tria uh we came up with a with an online test a diagnostic test that you take to figure out if you have hair fall at what stage of airfall you are there stages one to Stage seven if you're in the stage 1 to 4 we would actually give you a diagnosis real time and send you a kit of products which have ayurveda allopathy and some Diet uh restrictions to help improve uh or reduce hairfall for you and there's significant amount of literature and we actually appointed a hair coach who will talk to you on a regular basis and help you get through the Journey over and that's very different from you just going on online and buying like a regular hair product yes and that's a company where we built it on the philosophy that we will never be successful selling on marketplaces so 99% of our Revenue even today at a significantly scaled up number it's from your website it's from our own website can I ask you a question why do you say that you don't make money selling on marketplaces because of the tax that Amazon takes no no in in tri's case because of this diagnosis that you need to do and sell a subscription there is a significant amount so the customer actually spends 8 and a half minutes on our website first filling that questionnaire up basis which you give a diagnosis post the diagnosis the product is given e-commerce marketplaces are built for Pure product shopping they're not built for that experience so in tra's case we had to kind of shift the game and um also I think that's this is one um one line uh of Brands which is product there are there is also significant brand building when it comes to whether it's a financial services play whether it is a Tech play in fundamentally if you believe that or if you do not believe that a brand plays a role in your decision making then you're not nine times on 10 you're not thinking right because 80 85% today of your service decisions are also driven by your view on brand what do you mean by service let's stay cult fit now you're willing to pay a premium because of the brand because of what you what the perceived value cult gives to you as compared to any other neighborhood gym now it has over a period of time proven to you as a user me as a user that this is quote unquote higher quality and actually in service right higher quality is even harder to measure you're willing to pay a higher fair to a certain Airline versus another one you are willing to pay higher room rental to a certain hotel chain versus another one if you look at all of them every single decision that you are taking with respect to how much I spend on what part fundamentally comes from how you feel that brand is going to impact how I am perceived so it's not just the brand it's if I buy this brand how will my brand improve in my pe's eyes exactly that's ultimately and all of us right are behaviorally playing that game where there are a certain like all of us uh and this is I'm sorry I'm kind of probably going into a very unrelated Loop right but 95% of us I would say if not higher are fundamentally playing for relevance in front of somebody our peers or could be peers could be parents could be spouses could be girlfriends could be boyfriends could be kids could be grandparents so all these brands are sort of a way to hack the social game for yourself yes and you're able to create your own presence in that social sphere where whatever is relevant to you whoever all of a sudden feels that your game is worthy of their attention so I'm just going to summarize

this right so far Venture Capital early stage Venture Capital where you come in is build the product build a differentiated product then every round of capital beyond that is build a brand build a team and obviously the team is helping build a brand once you've built an established brand then it's harder for somebody to come and disrupt you and the therefore the ultimate goal of venture capital is to build Brands not necessarily companies and the company's a side effect of the so I think the way I would probably go about it is you especially in the consumer fair so and again in some spaces in every space it'll probably be a different answer but if you are not if you're not a relevant enough brand you are going to die the company side of it which is the numbers that come with it the financials may not be as permanent as the SE so you'll have a good this year but you've not built a brand so your next year is bad so so an emphasis remains an emphasis for a longer period of time because over a period of time brand emphasis becomes more important than the financials underlying it so the classic example right uh Maggie the brand became so powerful that even after a one and a half year ban they came back and the year after that the numbers were stronger than even before the ban at the end of the day it's a noodle anyone can make a noodle anyone and anyone was making a noodle when Maggie was banned everybody every consumer company and their uncle had come up with a noodle brand and I'm sure they sold as well but the moment Maggie came back the it remained King now imagine this right it was a food brand it was banned for allegedly reasons of food not being safe enough and it's still and it came back and the same consumers who were buying it bought it with extra amount of Vengeance which showed in their financial performance so the company is a vehicle where the financials reflect how big the brand has gotten I have a question here right is this valued somehow the brand because I guess the financials are a reflection of that brand and so I know that the later stage you go as a venture capital firm or when you go raise you probably use a technique called DCF which is discounted cash flow right you're saying this is how much money the company is making this year this is how much money we expect the company to make over 10 years therefore this is the valuation of the company but this the brand is not baked into this no so I think there are two ways to answer this right so I think there's a there's enough amount of work done in the field of valuation uh where actually brands are valued IPL is valued all of your IPL clubs uh are valued and there is a significant premium P now if you just flip the argument a little bit the revenue that you make today and you'll make over a period of time has significant Reliance on the brand itself because the reason why you're willing to pay more to a Hotel versus any other hotel is because you believe Taj is giving you the service that is worthy of the money that you're providing to them so it's anyway reflect in your fin so in a way the reason why Taj can charge x amount per room night per customer is because there is a brand premium that is already associated with that because the basic costs of a hotel operation after the fixed costs the variable costs do not change significantly can I make an inference from what you're saying can I say that your brand is reflected in your gross margin premium against peers may or may not reflect in your gross margins because there are businesses that may operate on a premise where they believe that high gross margin is not good for business what is a brand right if you go down a brand is a belief system where I have a belief that I want to buy the most uh or the best value for money product for myself if that is what I'm looking for probably Dart is the place to go now by design dmart has chosen a model where they're able to every single time prove to me they the value for money is what they've chosen now in that process in their early days they may have taken a call to give up on their gross margins but they have created a position in my mind where dmart is very difficult to replace when value buying is important to me and this is not just true for product not true for service actually true for everything you and I have spent money on yeah so we've

summarized that venture capital is sort of builds a brand and we've seen this with companies like opena and all right like even if you build great technology eventually competitors come and now opening ey is having a hard time because perplexity is sort of starting to build a brand so is uh you know Bard and all the others right but you're also of the belief that VC in India does not have product market for at least patches of fit right and what that means is even Venture Capital as a product you're offering money to other people but you're saying that might not have product Market fit what does that mean so as I said earlier right I think first is by product Market fit we fundamentally mean that somebody's willing to buy your product or service at a price where it economically makes sense for you to do that activity now in Venture Capital we deal in money M which means let's say you an investor in my fund once you commit a certain amount to my fund given this is the riskiest part of your portfolio I typically promise you 3 4 5x on your money now for me to have product Market fit across stages of company building I need to have seen or exhibited enough number of exits where somebody has made that kind of money for me to confidently believe M that it works now in the Indian context as we kind of spoke about this earlier between a few companies that have gone public and flip cart and probably two three others we've not seen too many large cash exits which means that kind of money has not gone back to limited partners for them to have the same confidence that India can become a machine that generates that kind of cash for them to keep deploying that kind of money into India by the way there are also some structural reasons for that belief because I don't think India is as efficient as of now as a market even from a consumer uh standpoint as let's say the US is because of various differences in how our economies are structured the inequality in India and the number of halves so in India is a much narrower window as compared to the total population so we may be a country of 140 150 crores only 7% of us even have a passport so which means if you're building an outbound International or in like travel business right you can only work with the 9. 6 9. 7 CR people who have a passport M last year 2 CR Indians traveled abroad now once you start narrowing the pool all of a sudden you start feeling that for you to be a profitable business you need to make more money from the halves but you cannot count the broader population by Hales you mean people with the money because they are the ones who will actually be able to pay and that's why now all VCS have started differentiating India into India 3 India 2 India one yeah and everybody has their own definition somebody defines a part of India as Singapore and somebody defines it as London depending on what our our respective uh GDP per capita in those markets is but if you look at that right it is a fairly narrow Spectre now the reason why is it relevant it is relevant because a venture capital business for it to generate four five6 billion dollar of exit value on a single investment is increasingly hard in a business like in a country like India where the total number of companies in the listed universe so I'll give you again a data point to my knowledge there are around 520 to 530 listed companies in India that are that have a market cap of more than a billion dollars and we have a 125 to30 Private unicorns that are valued more than a billion dollars the definition of a unicorn at some stage these 125 companies have to prove their worth by giving exit to their investors how many of them do you think will actually give reasonable exits controversial question but now let's assume and I'll not name companies here but at least name contexts here now let's say a company today is doing 100 120 crores of Revenue H is still making losses through VC capital and is valued at 8,000 crores now anybody will tell you that it'll take a significant amount of time for that company to as we use the phrase in our VC World grow into their value valuation H because a 100 CR 125 1502 200 CR company valued 8,000 crores means it is 40 times Revenue you do not see that in many places even the hardcore Tech plays are valued at are not valued at these kind of crazy multiples now within the universal set of these 125 companies that are already valued at 4050 30 20 times Revenue you know that they have a long way to go before they can meaningfully evidence their ability to return on the other hand there may be companies at 1,000 2,000 3,000 crores that are valued at 15,000 crores and fundamentals that are improving year after year you know that those companies will eventually deliver so I think that emotionally I would like to say I would I seriously hope that at least half of them return at least a billion do or higher uh Jan 2024 sitting where we are I am not able to practically see that what number do you think will actually return a billion dollars companies valued a billion dollars returning at least a billion dollars current uring cons I'd probably say yeah 20% so you're saying there are only 20 real unicorns in India the other 80 are sort of there but yeah unicorn in itself is mythical right so yeah so I yeah I can't as I said because I'm basing this on financials of some of these companies that I've been able to see after theyve filed fi 2 23 numbers I so is that why you say that VC especially later stage VC doesn't have pmf because they're the ones that came in last put in the most amount of money valued the company at 40x cuz I've spoken to some unicorn Founders about this you know what they say the Unicorn founder tells me that bro 2 years ago everyone's being valued 40x if I didn't take a 40x deal I'm the idiot right my VC is like but I don't fall the founder at all I don't fall the early investor I actually don't even fall the guy who probably gave that valuation at that point of time because there's so much competition because there was so much going around at that point of time um that it is easy for us to sit today and find flaws in that argument but at that point of time all of us were flying the same cloud and in my mind I think the more important question is what did people do with that money there are significant number of Founders in this whole category that I know personally who were very cautious once money flew in which also means that the those guys have already planned their plan B's and C's and D so they may take like today's evidence I may say that number is 20% we meet 12 months down the line 20 more may have grown into that valuation because you also have to understand those guys do not need to raise that kind of money anymore because they've been careful enough in keeping that money in the bank they've been careful enough to cut down their burn to keep Capital with themselves but I fundamentally believe that in the next 36 months or so what is the ideal fund size for a venture capital fund is a question that will get discussed way more than it is discussed today where n LP may continue to find a GP very compelling interesting and and very high quality but the question around what is the right amount of capital to raise for what strategy will become a question that will get discussed uh I know uh from private conversations with some of the GPS who raiseed large amounts of money they are asking the same questions as well but now it's too late right yeah it is for this fund but you can fix it on the next one you can fix a strategy you can find answers there are still strategies that may get you over the line can I ask stupid question why can't the GP wire back half the money they can and cut down the fund size maybe you'll see some of that happening as well and for those listening the reason the fund size matters is you the rough math is you need at least one company to return the fund so if you're raising like billion dollars as a fund and you're investing in 30 companies you need at least one of them to give you a billion dollar exit and for dollars as an exit and if at exit you're owning 10% the company has to be valued at $10 billion at the time of exit which is not something that at this point of time for the next 3 to four years we are going to see too much of it may happen it hopefully it happens in a few scenarios but I don't see it happening in 15 companies for example so I do see some of those not playing out which is why I uh and by the way to your point on returning uh the fund I think GPS always have that Liberty uh in other Market markets I'm not sure in India I don't know if enough examples but in other markets GPS have done that in the past as well whenever markets have turned uh they have returned money they have shut down funds they have decided to give away money because they've not found enough opportunities in the space that they are building in uh so it's happened it's not that it's not happened uh what it also has an impact on is the fee pool that you have access to so there are operating constraints as well that you have to keep in mind so you take 2% to run the your so you as a VC you probably have to lay off people either lay off people reduce how much you're paying people like figure out an economic model that works and that's the other thing right I think over the next 3 to 5 years between right sizing as see the same way we kind of talk to Founders about right sizing their cap table I think GPS will right size fund sizes as well and even the fund economics the way it works today the 220 which is kind of taken for granted I think that'll go through its own journey of evolution as well because it is predicated on the return profile that tech companies in the US have shown if we are not able to show that kind of return profile we'll still be able to raise money but there will be hard questions as they should be from from LPS on what is the right economic construct for running fund is there something outside of fund size that you disagree with other VCS on I think one thing that um and I've had this conversation with many VCS on is um how much time should you give to a portfolio founder and I'll try to explain this with some context right so the context here is that a lot of my peers in the Venture Capital World feel that Founders should have all the answers and most of the times Founders should be able to figure Solutions out rather than necessarily coming to an investor for help advice suggestion whatever uh category you want to put that in uh um and I've had this conversation with many of my friends in the Venture Capital ecosystem that I fundamentally believe that for the first four years three to four years of a company's life a Founder actually genuinely needs a lot more of your time uh over and above the capital uh which is also why a model like CS where the kind of money we are offering is not earth shattering today a Founder a lot of Founders who raise half a million dollars from us can actually easily raise $2 million from somebody else but they're kind enough to raise that money from us because they're also able people and and there's a uh there's a split down the middle where there are more people on the other side who fundamentally believe that having Founders who figured it out are better than Founders who need help uh um I think that's one uh and the second again I think it kind of stems from this but it's more a 1B where we have a very firm belief in incubating or co-incubating or creating businesses which a lot of VCS again feel uh because you're not I mean my observation right from my interaction with you because you're not as concerned about irr maybe you are I don't know but I think you also enjoy it like creating a business I do as I said right I think the reason for starting whiteboard for both sandep and me came out of that personal need to try and build a few companies Co that we could that you're proud of you point of time be proud of that we were a part of this and which is also why right we've quasi incubated businesses I gave you earlier the example of upna Club it's a quasi incubation because s the original business had shut down um one of the co-founders had to move on because she wanted to take up another job so it was only Shruti and me and we kind of worked through various ideas before we were able to bring in somebody I knew as a co-founder and creator completely different retail model by the name of Apna club which had no correlation to what we were building out in s uh so those are the things like if you were to ever kind of catch me and discuss things that I would say over the last six years that I've been very uh I think those are the things that a lot of my VC friends feel uh is they're not sure the same way I'm not sure of the pmf of late stage investing to some extent they are not very sure if there is pmf or scalability around what I'm doing with my in investing in an idea St stage or trying to incubate a business where it is a lot of my thought that has gone into building it along with the founders so they may feel like because your thoughts are there with the founders but you're not going to be there running the company I'm and I may not be there for long and I may what happens three years down the line will the founder be able to think on her own like there are a lot of those questions which are very fair questions I don't think we are at a point where I've been able to answer them because it's too early hopefully I'll have better answers but I think those are places where we uh healthily disagree on interesting hey so what do you look for in Founders like what's something is there a template for founder success someone who can give you like a th000 crores 5,000 crores outcome I think it's a mix of founder market fit in the sense that is the founder built so in isolation right every founder we meet we have very high amount of respect for but is every founder built for their market for a specific business that they're building the fit is not always that clear or that straightforward um I think the other part that we look at uh more than everybody else is uh for me it's very important to spend enough time with the founder to understand where she's coming from M why are they doing what they're doing M uh as I was mentioning earlier in our conversation right that to me entrepreneurship is the second most illogical choice so why are you making the illogical decision the reason like to understand that why do you want to go after that extremely illogical decision why do you like and what is it that drives you because when things go bad or when things look negative the only thing that keeps a Founder going is the passion that made them start it at times somebody like me just needs to remind them when I met you four years ago 5 years ago this is what was your driving passion is that passion still there or not if it's not there the business can't go anywhere and if that passion exists I am not worried about six bad months 12 bad months 18 bad months eventually we'll come out of it so I think the you need to be really passionate about what you're doing yeah so understanding the person and their motivation is something I try to spend a significant amount of time on sometimes

successfully sometimes unsuccessfully I know a bunch of VC's early stage and I think this is a good thing right where they're like Founders good yes but also markets like for example you've been very clear that at least for your investing philosophy like something like a high-fi tech thing might not work yeah and I kind of see why now like 10 years later I I'm starting to see you know your the VC point of view right um You Think markets are more important than Founders markets are important uh and we've learned it the hard way uh We've made mistakes uh with Niche markets um so I wouldn't underplay but I also think that if you've with the right Founders yeah we've also seen us navigate our way through what seemed initially like a niche market to become a bigger play so I think at times the founder quality offsets it not always you have to be lucky in equal measure uh to actually be able to get that trade off in your favor markets do matter so there is no doubt about it but I also think that how you approach the market matters a lot so you need to have an Insight yes something that on which it's built now for example uh and I'll take maybe 30 seconds here we we've been looking at businesses in OT content for four years spent a lot of time trying to research what works what doesn't work we were reasonably clear we wanted to do something in Regional content we came across two businesses with very different underlying philosophies one the philosophy was that the average Indian user wants a quote unquote lower priced experience so I'll keep my content cost slow and I will offer this subscription of this Regional OT service at a lower price and I came across another founder whose view was that whether a customer is sitting in a small town near jalander in Punjab or sitting in Bangalore that customer still wants high quality product because the exposure to content today is more or less homogeneous internet's fairly cheap everybody has access to the same amount of data so you cannot tell a customer sitting in a tier five town I'll give you a worse lower quality content experience because you don't deserve better now there's no right or wrong answer here we've chosen the second one and we are we we've invested in a regional OT platform which we've launched in Punjabi we are going to launch in a couple of are you pish on Regional OT platforms I'm actually very surprised that they worked like I know I've heard some success stories stage and all the others right yeah so stage is the one on the left that I mentioned and chapal is the one that we ended up investing in um and for me the chaal strategy fundamentally works we have now almost uh three lakh paid users at uh a higher arpu than hot star you know that was a big googly for me I if you would ask me to bet on Ott content I would have said no nobody would pay for it unless it's like soft you know bad stuff yes but um so this is and as I said I think some of this has been learning for us as well that was our assumption too as we went deeper into those markets and went into those consumers so I think knowing where you are placed in a consumer so for example in chopa we very clear we'll probably be a customer's third OT product we'll not be the first but that's okay we okay with that because we see like the shift we see happening and that shift is very visible if you look at the number of setop boxes being removed every month that over a period of time people's Reliance on setup boxes is going down everybody is moving to different forms of Ott for their consumption needs so even if you're the third screen or you're the third Ott app on somebody's phone it's absolutely fine doesn't matter over a period of time there'll be a large enough market created with this third OT screen as lesser and lesser people consume the old school old media content which is kind of which comes to us through setop boxes and and cable TV because that number is falling every single month so it's a it's I would say a more uh medium to long-term view that over a period of time uh wherever a consumer is the dependence on OT for content and entertainment will be extremely high now what you need to ensure within the regional ecosystem then is that for the markets you're serving you need to be the content Leader by a distance you need to have for example in japal 70% of all Punjabi content released m on chal but tell me this right tell me in terms of like you're not very bullish on software as a service or super deep Tech from India uh neither are you bullish about consumer social why so one by one right so consumer social works on ma uh but the ma to monetization Journey going back to our discuss for the audiences uh so basically you have these monthly active users who actually come to the platform and you have a lot of users but to actually make money goes back to our earlier discussion on the Indian demography being a little narrower skewed in terms of people who genuinely are the halves or can pay which fundamentally means that you need to have a premium service for the top two CR top three CR top four CR Indians to pay for it but the bottom 100 CR of India will use the service but not pay yeah may may watch your content but it's difficult for you to monetize either through advertising or otherwise from that user so I think this like the social play right fundamentally works on your ability to be able to monetize the top and for the top if somebody comes up with a very differentiated social experience yes it can work um I have actually seen most of the social products that at least have been pitched to me have been volume plays have largely been sold around High m use M the proportion of monetizable audiences from that high monthly active users in my narrow view is not that high which is why I have skepticism with respect to revenue generation also I have a thesis around building a social network for the top right I mean we kind of that was the original thesis of my last company it's um you're competing directly with Instagram and Facebook and Twitter yes and it's just so hard those Network effects I mean even mark threads now right with Instagram and WhatsApp behind and still not working because it's like it's really really hard yeah and see network effects right again goes back to that can you explain Network effects for the audience so fundamentally a business with high Network effects fundamentally is a business which um where the growth Loops of the business are directly dependent on how strongly the existing Network um communicates using the product and is able to bring more and more users to the platform so fundamentally you're able to build a vicious network of people who cannot um for whom a part of their life depends on their ability to be able to use that Network and again I think I'm not saying it's an it won't happen as whiteboard I doubt that a Founder who's building a very strong Network effects business will raise money from white board and I I mean we haven't seen one single success of social media top tier social media in India we haven't and and as I said I think even if we see the amount of capital that business will require uh even to get off the ground is probably 100 million is yeah is going to be in at least tens of millions which takes me as whiteboard out of the equation uh I I hope it gets built out of India but I don't think it's the most relevant space of inquiry for me given my constraints of of my fund size and what kind of deals I can do and we should have seen at least one success P good Founders have tried a lot of very high quality different things have been tried a lot of uh high quality models that worked in other geographies have been attempted and as I said as you rightly said by Founders who are extremely high quality as I said never say never but I do I do think that there is a whether it happens or not I'm not too

sure what about SAS software as a service where you're selling a software product for $9 or $20 or $100 I think in basic sense right I think and SAS just kind of to Nuance it slightly further software as a service can be sold to Enterprises small and medium businesses can be sold to individual consumers uh can be sold to creators like you uh as well as individual users uh canva is a very good example of a software product which started with a certain kind of users so my my view on that again goes back to We Are by Design um programmed to see size in an opportunity uh as capitalist as Venture capitalists we are supposed to see quote unquote large outcomes we discussed that uh in the earlier section now for that large outcome to happen in an SMB or small and medium business scenario the number of businesses you require paying you that kind of money selling to India I think is a very difficult task there are some businesses in our portfolio that are SAS platforms selling on Shopify ecosystem some selling in the US I see the opportunity sizes there but I also think it's a very hard grind for every million dollars of annual recuring revenue or ar as we Define it to come into those businesses now does it mean none of them will play out I don't think so but if you again look at it mathematically you need a $100 million of annual recurring revenue for again given same business valuations for a business to be valued at a billion dollars to get a $100 million of annual recuring revenue so even if it's $100,000 so you actually for 100 million of Revenue you need thousand customers that in itself is hard now all of a sudden if you change that $ 100,000 to $100 then and do the maths on how many people you need to sell this too to become a and again there have been successes in that space and hopefully there'll be more successes that will come out of the space I basically think that Genesis of India as a technology ecosystem has come out of our cost Arbitrage and services potential which means that I can hire somebody an engineer here for like three and a half four lakhs ANM at a services company and that engineer will be able to deliver similar or maybe slightly inferior offering to a company which is offering so I think all of us probably have read some stuff about how ecosystems come into play right so the Indian technology ecosystem started with the infosis the vipro the tcs's of the world which were built around our operational and service efficiency they were not necessarily and I'm saying I'm again I'm making a brushstroke remark but I'm just saying they were not high-tech product companies H so a lot of like basically see it's it's that Circle right of where your high quality Talent comes from if it is from process efficiency Services businesses you fundamentally understand that that's something you'll do really well but how many high quality tech product companies we've seen one second 80 85% of the Indian high quality tech product Talent chooses to work in the larger Global Western companies so I think that the shift towards us being able to create extremely solid viral products will happen but I am not sure if that is something that will happen in the next three years maybe it'll take slightly longer and what do you think about selling Enterprise deals to India what I've learned like software Enterprise deals to India is they eventually become services companies like I've seen this like actually you can see like some companies like Darin box are doing fairly well tally is doing fairly well and not just them right like plenty of other companies once you start digging and double clicking you'll find quite a bit of a Services I think the the question right and I think that's a metric that I think now is globally accepted I think one of the things that you should always look at right is how strong is your Revenue per employee M so if you are a tech product company and you have 8,000 people working clearly the two are not jelling because you don't need 8,000 people to run a product company if you are a tech product company most of the global tech product companies are very thinly stuffed the revenue per employee is huge is massive and I am again I'm saying this with enough amount of ignorance I'm sure there are businesses in India with very strong Revenue per employees but a lot of the larger grownup companies that I have seen in the software side have also had a large number of employees for the revenue that they bring in and if Revenue per employee is not uh high enough it basically means there is some part of your business which is not fully productized for which you need a service delivery team to handle customer queries responses whatever that means as I said I am um confident that there are and because I keep talking to a lot of my VC friends who have a uh who have a strong view that India SAS from India whether it's for the world or for India is a very large opportunity and I see the macro Trends but for me to see a company genuinely deliver the metric of Revenue per employee for a scaled up company will be a very interesting metric to see I'm not not gone deep enough on that but probably as a followup to this conversation I will I'll actually do that and try to see which are the companies with very strong Revenue per employee for me to kind of see that they could be the next product Heroes software product heroes from India

awesome so I have one last question for you okay sorry for keeping you for so long but just the rate of insights is pretty High last question for you have you Angel invested nope what do you think somebody who's looking to Angel invest should think and do I've been Angel invest in a few companies I've just lost my money on all those companies very small checks compared to a VC so I think first step of Angel Investing is knowing that whatever you invest will not come back should be okay with it second there are categories of people who Angel invest uh people who work in a professional space people who uh are full-time Angel Investors uh people who run syndicates so depending on where you are from so if you for example working somewhere and you have some knowledge that you can like Angel Investing only to make money uh I think it's very hard to make profit from Angel investing as a career people have done it but if you'll meet 100 of them maybe two three four would have been able to Strong survivorship by us yes but the but if you come from an industry and you come with learnings that you think can help a Founder build better but you're in a position where you for various reasons do not want to be a Founder yet you should Angel invest in areas you understand just to get some insight just to get insight share insight learn with collecting wisdom again not investing for the sake of making money so you invest let's say a few lacks but you're getting to learn a lot more you're getting to teach have conversations with somebody who's interested in similar spaces as you are for example you very high interest in AI you find a Founder who you think you can jam with on Concepts that you've not thought through or concepts that you want to discuss so you invest more the same way you will invest in a course for yourself to up skill to be able to directly text the founder and be like yes and to be able to have a conversation which you feel enriched after but if you invest for the sake of making money I think it is um it is very difficult the law of averages a lot of times plays against you what's the minimum number of companies you need to invest and to start seeing a return like a 100 no so I think bare minimum I would say 20 uh so if you and again the one thing which is very important if you genuinely choose to Angel invest and you have let's say a corpus of money which you're okay to lose let's say that Corpus of money is 1 rupees that you're okay to lose fully then if you're going to make 20 Investments you need to be disciplined enough to say I'll make 20 Investments of 5 lakhs each M you cannot pick and choose and say this one I'll put 25 lakhs and the other one I'll put 2 L in because genuinely speaking you don't know which one will work H even if you have high conviction it doesn't matter see at your level until unless as I said you have some significant information Arbitrage if you are a where you know they crack some government or where you know that this specific technology given your domain experience you have a very strong view on this will be the next big thing and you're willing to bet your house on that different but as a rotine angel investor invest the same amount in every company so that you don't suffer by your own decision making because now think of it this way you invested 20 lakhs in a company it goes under you invested 2 went to 10x but it still return 20 on a portfolio of one CR you're still under because genuinely speaking and I'm saying I say this as somebody who's running a fund it is I'm not even say hard I can't tell you that I invest which of my companies will work I believe hope all of them work it doesn't happen so and I do this 24/7 or whatever number of hours I work in a day even then and I've been doing it for 6 years and I've been seeing this for 12 13 years I still have uh whenever I make an investment I'm extremely nervous because I'm not sure if it'll work so I think that discipline in investing and discipline in exiting are the only two things that I've learned some by doing the right things wrong things if an exit is on the table and you choose not to take it you should have thought long and hard about it doesn't matter whether it's a 3X 5x 6X 7x whatever because it can become zero yet again H so if you've not considered that possibility then you are fooling yourself so staying disciplined as an investor and probably the same advice you'll hear from a lot of public market investors every single investing book starts with the word discipline ends so ensuring that you are disciplined about your approach interesting what's the paint the positive case for whiteboard where does it go if everything works according

to plan next seoa not at all I don't think we'll ever raise a fund greater than the current fund size because I think I have an Excel sheet model at this point of time on the basis of which I can give the returns that I promis to investors on this size I don't have one for a higher amount because what sandep and I enjoy is investing at this stage that is like I'll never take the fun out of what we do so which is why we'll always invest at this stage so the positive case for me is that we are able to build a few companies that are remain relevant for a longer period of time uh we create some Brands both online and Offline that stay beyond the size of our funds and obviously uh needless to say we able to return whatever we've promised to our investors but uh the best case scenario for whiteboard probably is maybe three more funds of the same size what's a failure case I mean one thing we do in this pod which is like very weird is like a lot of people believe that Founders or VCS or whatever haven't thought about the failure case you know when the media comes out and says oh these people are fa or these people will fail or kunara has raised so much money you know what where is the profit model the company is going to fail it's like every founder I met they know that there is a failure case but sometimes them annunciating enunciating the failure case on a podcast is just very useful so I have two failure cases right so uh the easier uh failure cases I don't have a I don't raise a next fund that's still easier uh the harder failure case is that I'm not able to build a single high quality company from the current capital that I have M and again as I said there are failures always in Shades so I think this is extremes uh but in extremes if I'm not even able to build one company two companies that I'm proud of from this fund uh that's a significant failure case us not being able to raise the next Fund in itself will be a reflection of this but uh but I think in different shades both of them are kind of failure cases uh for whiteboard I yeah but I think I can't kind of think of anything else awesome thank you so much I'm I learned so much perfect thanks a lot Veron for having me I think sorry for me taking two hours of your time and just like slamming you with questions no i' I've never done this before you mentioned that at like right at the top I've never done this before I I'm not sure if I'll ever be able to do it again so no it's lovely you should do it again 6 months later we'll have you on again all right ladies and gentlemen hit subscribe bye-bye