"Adaptability is the Key for Entrepreneurs" According to Vikram Gupta, founder and managing partner, IvyCap Ventures, startups who lack clarity, focus, and capital-efficient growth will face difficulties, irrespective of the market condition.
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IvyCap Ventures is clear about its investment philosophy- execution is the key to success, and that adaptability is the key for entrepreneurs seeking funding. According to Vikram Gupta, founder and managing partner, IvyCap Ventures, startups who lack clarity, focus, and capital-efficient growth will face difficulties, irrespective of the market condition, "Investors now seek startups capable of effectively communicating their value proposition, market potential, and competitive advantage. Successful startups exhibit deep market understanding, addressable pain points, and scalable solutions for transformative impact."
In this ongoing slow and low period, will he and the firm be recalculating the valuation of its startups? IvyCap Ventures' valuation approach is rooted in the careful assessment of the potential startup's performance. "As a VC fund, we place a strong emphasis on maintaining accurate valuations that align with the true potential and market value of startups. Our aim is to provide ongoing support to these companies, equipping them with the resources they need to achieve their long-term objectives. That being said, we also acknowledge that market conditions can impact investment decisions," Gupta shares.
He feels that in the current scenario, entrepreneurs are facing a unique challenge while seeking investment. However, the stages of Series B and Series C are the difficult ones. "Series B funding is a pivotal milestone for startups as they strive to scale and solidify their market position. However, valuations become a central concern at this stage, demanding both entrepreneurs and investors to carefully evaluate the company's financial outlook. Similarly, Series C funding marks a critical juncture for startups as they transition from growth-oriented strategies to building a sustainable business model. Investors become more riskaverse at this stage, emphasizing the need for startups to exhibit tangible progress toward profitability," adds Gupta.
On asking if there are any companies that they would want to safeguard with capital, he shares that the companies who focus on profitability are their priority, "Our approach revolves around nurturing and supporting businesses that demonstrate a clear commitment to financial sustainability. A key aspect of our approach involves encouraging these companies to prioritize their expenses and costs, with a strong focus on core areas of their business." The firm believes in taking proactive measures to address the situation. So, what does the year ahead look like? While the core investment sectors are healthtech, agritech, climate tech, and AI/IoT, the firm is also open to the fields of edtech, fintech, and consumertech that have progressed beyond the Series A stage.
No. of startups invested in: (Since inception)- 42, (In FY22-23)-5
No. of exits: (Since inception)-10, (In FY22-23)- 2
Focus sectors: Sector Agnostic (healthtech, agritech, climate tech, and AI/IoT)
Fund Size: Assets Under Management (AUM) INR 4500 cr
Ticket Size: In Seed to Series A, INR 1- 50 cr