Pritesh Lakhani@priteshlakhani
Yesterday, I was at an event and met a few VCs, and I can’t believe how lucky I am to have raised via Twitter.
At the end of the event, I asked myself if most of them think like this, there’s no chance a PNEUCONS can be built in India. There’s no room to talk about a category someone has not heard of or seen before.
As a founder, it’s our job to educate about the category, but whose job is it to research and validate the category? They say they come in at early stage, pre-money or ideation stage, but what no one says is they only come in if there’s a parallel or monopoly and FOMO.
I pitched to one guy saying I want to raise $2 Million, and the conversation started like this: a portfolio co of ours scaled their revenue from 1Cr per month to 7Cr per month and grew their valuation from 70-80Cr to 400Cr in 8 months.
It was a 2-minute conversation (because of the event setting), and I was putting my best foot forward. For every one of my metrics, his counter was the scale someone achieved in a parallel. I realised I can’t reason with him because he had made up his mind when he read “Industrial Marketplace” on my visiting card, and now I have to defend myself against the likes of Moglix and IndiaMart.
He ended up explaining the logic of how big the fund is, the XIRR they have to offer their LPs, which decides how much multiples I can get as valuation of my revenue and how big the company can become in 7 years. At that point, I understood what this game is about.
It’s almost impossible for startups at early stage, ideation stage or even seed stage to pitch and pass this formula unless you know someone, have a pedigree or have figured out how to reach Mars in your car.
Their job is to be optimists, but evaluating companies day in and day out has made them pessimists. They question why there is no other Indiamart, and I ended up saying because of you guys.
I have 4 investment bankers on my cap table, and probably all of them have bigger profiles and have worked on projects that these VCs may not be capable enough to imagine. At that moment, I realised what we have unlocked on Twitter.
I hold more respect for founders who have raised VC money without any pedigree, network, generational money or US exposure. Those founders have cracked something that is almost impossible.
