Inside the Life of a Venture Capitalist
Free Book Preview: Coach ’Em Way Up
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
All the buzz that has been around Venture Capitalists in India for some time now discussed the prerequisites a venture capitalist seeks in a project before investing in it. The conversation primarily revolves around what goes on in the mind of an investor while making an investment decision. Let’s take a broader look at the challenges and the journey of one such venture capitalist highlighting how he does what he does.
Amit Anand, founding partner at Jungle Ventures-a leading technology investor in growth markets, along with answering a few questions also shared his journey into the investment market and his tryst with entrepreneurship.
‘I Became an Accidental VC’
A computer engineer by degree, Anand began his career at Tata Infotech but moved through several jobs throughout his career in parts of Asia donning a different hat with each job. He was often dubbed an HR’s nightmare, following an unconventional path, but his mentor thought otherwise, ‘You have a portfolio mindset’, meaning one which does not settle for the ordinary and finds comfort in change.
He decided to take a leap in his career and built a startup causing him to meet venture capitalists across India and share his ideas. The startup failed and both Anand and his investor lost money leaving him at a junction between going back to corporates versus not looking back.
Failure is the Greatest Teacher
“Successful entrepreneurs become investors. Failed entrepreneurs become mentors.” Taking his mentor’s advice, Anand took lessons from his journey and started to mentor other entrepreneurs, making sure that others don't go through the same ordeal he went through. Mentoring entrepreneurs allowed him to put his learnings to work. He says “I felt greater excitement being a coach than playing the match myself.”
The experience gained during his stint guided Amit Anand to understand what gaps needed to be filled. “The quality and diversity of mentorship in our region is fairly limited. Also, entrepreneurs in Asia, particularly in India are at fault because we in our aggression forget to actively listen to the advice we get”, says Anand, “We bring quality advice and mentorship to people, helping founders become aware so that they ask the right questions.”
The Thrill Lies in Challenges
“When I failed to be a successful entrepreneur, I had every right to be dejected and not take a chance again but thankfully, my mentor pressed me to keep moving. ‘’This is not the end of the world. You need to take positive lessons and understand where you went wrong,’’ Anand recalls his master. My cofounder saw beyond my failure and took the next step with me, Anand reminisces. “We have a long way to go. We are motivated to give a chance to those who do not come from a pedigree with resources, support, and capital yet they believe that they can change the world. Guiding such people gives me happiness.”
Does he miss entrepreneurship? Not at all is his prompt reply. I have the best of both worlds. I couldn’t have designed a better job for myself. Being a venture capitalist is highly satisfying and rewarding because I get to do something new every day ranging from strategic decision making with a board of 20 plus members to philosophical discussions to guide my mentees.”
What Defines Failure?
On asking, not many investors talk about failure but how does Anand define it? To this, he replied, “We need to differentiate between failures and learning. It is okay to have learnings because you don’t know everything. There is always something new and unless you do it, you wouldn’t know if it was worth it or not. Focus on the learning aspect rather than success or failure.”
Entrepreneurs often face a dilemma early in their careers when their startup is offered a buy-out for tempting returns. One may think of making good money and pursuing other ambitions or retain and grow the business. But what does a venture capitalist think while playing the role of both an investor and a mentor?
“This is a recurring situation that I have to face a lot of times. My personal advice to one such young entrepreneur was not to sell the business as they were a good team who could learn, build, and execute their ideas well. But that young man’s motivation was the access to better resources and markets that could help them scale significantly faster. This was not an exit strategy, rather it was a growth strategy and that’s what convinced me that they are doing the right thing.” Anand says.
“Therefore, it is a subjective issue and the answer to it starts with questioning the motivation behind the decision. I always encourage a positive motivation and help them gain better clarity around their decision.” He adds.
A lot of times, investors let go of certain companies due to lack of conviction which later turn out to be a winning company. “The philosophy that helps us move forward is to ‘never look back’. Choosing or letting go a company is a decision based on parameters with context to situations at the time of the offer and we make the best decisions out of it. There is no fixed definition to making it big and success is often a relative concept so, you can never really be sure. The key lies in making concrete decisions and trusting in them.”
Jungle Ventures has over 40 companies across the region in its portfolio with five exits in last five years. It is looking forward to startups in enterprise technology focused on becoming regional or global leaders in their own category.