Get All Access for $5/mo

Here's What One of India's Oldest VCs Looks For Before Investing Given market diversity and a whimsical regulatory framework, one must build businesses for the long term in India to build significant value, says Ventureast's Sarath Naru

By Debroop Roy

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

Ventureast
Sarath Naru, Founder and Managing Partner, Ventureast

Ventureast believes in building businesses having significant value and for that they need to be operational in the long term.

"We believe that in India, to build significant value, one needs to build them for the long term, given the heterogeneity of our market, the infrastructure friction, and regulatory whimsy," said Sarath Naru, founder and managing partner at venture capital firm Ventureast.

Hyderabad-based Ventureast is one of the oldest VC firms in the country, dating back over two decades. Founded in 1997, the firm's investments include the likes of popular quick-service food chain Goli Vada Pav and Little Eye Labs, an analytics firm that was Facebook's first acquisition in India.

Naru says it is important for fund managers to retool the fund structure models currently in play to cater to investors in terms of providing them optionality for "times' of exit. "To get a quick decent return at exit is very rare in India. So if you have such an opportunity, do go for it. But balance it against a much bigger payoff if you have the stamina to go all the way."

Backing Entrepreneurs All the Way

The firm spends time with entrepreneurs they invest in to make sure that they have the ability for intellectual give-and-take and are fearless when it comes to answering questions, according to Naru.

Following pre-closing discussions with them, Ventureast sits down with them to convey that the firm will always back their decisions, he added.

Balanced Approach

When asked if it was fine for investors to take control of companies they invest in or if they should maintain a higher moral ground and let the entrepreneurs do their job, Naru says the argument is equally applicable for their investors, who have entrusted them with money.

"The investors who backed us expect us to do our best, in thought and effort," he said.

However, if the firm only cares about investors, it wouldn't be attracting the best entrepreneurs to its fold.

"We look at the trade-off of these two guiding principles constantly, so that the overall stakeholders will best benefit," Naru added.

Debroop Roy

Former Correspondent

Covering the start-up ecosystem in and around Bangalore. Formerly an energy reporter at Reuters. A film, cricket buff who also writes fiction on weekends.
Growing a Business

How to Overcome the Challenges of Remote Work in the Professional Services Industry

Some businesses need to meet in person, but for many service companies, the question is whether being remote has advantages. We look at what the challenges are and how to overcome them.

Science & Technology

There's No Margin for Error in Cybersecurity — Here's How to Build a Strong Online Defense through Everyday Habits

Learn how everyday habits and practices can enhance your organization's security posture.

Leadership

He Didn't Want to Lead His $1 Billion Business the Same Way Anymore — Here's How the High-Stakes Switch-Up Paid Off

Advait Shinde, co-founder and former CEO of educational software company GoGuardian, was ready for a change. So was former COO of LegalZoom Rich Preece.

Science & Technology

How AI Is Being Used to Improve Cybersecurity for Businesses of All Sizes

Discussing the role of AI in cybersecurity, the challenges that cybersecurity teams are facing and future trends that governments and businesses need to be aware of.

Growing a Business

How I Simplify All My To-Do Lists With This One Simple Practice

Focus on continuous, high-impact tasks that drive growth to simplify your startup's operations into a few clear, actionable sentences.