With Over 50 Company Portfolios, This Investor Believes in a Family-office Setup
For Damani, if the investor has taken the role of a lead or mentor in the start-up, then it is their duty to be involved in the business
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Unlike other private equity investors, Apurva Damani, Director of Artha India Ventures, works in a family-office culture along with her brothers, Anirudh Damani and Animesh Damani. Her job at Artha is to manage the firm's portfolio of more than 50 companies in India and the US along with deploying capital into 12-15 new ventures every year.
She feels working in a family-office arrangement is a perfect setup for them as individuals and as a firm. "We trust and understand each other. This helps all three of us to excel in the different roles we handle for the office. I can just pick up the phone and ask one of them for help, bounce off an idea or just blow off steam after a tough day."
For Damani, investment did not happen by chance. "Making the decision to invest is a choice, as is choosing not to invest," she says while adding, "We have been receiving good deal flow only because we have built credibility over the past five years and have developed deep relationships with the angel networks, investors, incubators and of course, entrepreneurs."
If the investor has taken the role of a lead or mentor in the start-up, Damani feels it is their duty to be involved in the business. "They should actively monitor the start-up, conduct periodic meetings, nurture them and help them plan," she added.
Giving an example, Damani shared that Artha conducts surprise audits at their startups to confirm the veracity of their statements. "We conduct monthly meetings and quarterly visits to their premises to ensure that they are on track."
The VC firm, which has a portfolio of about 54 companies that includes Oyo Rooms (exited), Exotel, NowFloats, BabyChakra, Tala, and SuprDaily, is likely to invest in a startup if it has been referred by a co-investor or an entrepreneur. Its average ticket size is about Rs 15 to 30 lakhs.
While evaluating the deal, Artha tends to focus on the founding team, which the Damanis believe should be well-rounded along with a strong understanding of the space and has a well-thought-out plan to execute the idea
"The idea should have been validated and the team must prove that clients are willing to use the product/service -even better, pay for it!" she shared.
Additionally, before closing any deal, the team prefers conducting a thorough due diligence to put measurable milestones and key performance indicators (KPIs) in place, and gauge the team's ability to engage with important stakeholders and implement recommendations.
However, learning from their investment experiences, Damani says the trio avoids investing in a space they do not understand or feel have unrealistic valuation along with ideas that need high capital expenditure on research negative unit economics, complicated team ownership structures and teams with questionable integrity.