What Investors Expect from Start-ups Before and After Pumping Capital

Archit Vijoy, associate at DSG Consumer Partners, talks about the mindset of investors

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Since its foundation in 2013, DSG Consumer Partners has been making early-stage investments in consumer-focused companies, primarily operating in India and south-east Asia. Oyo Rooms, Veeba, Epigamia and Raw Pressery are some of the companies that have received funding from this venture capitalist firm. Entrepreneur India caught up with Archit Vijoy, associate at DSG Consumer Partners, to understand the investment strategy of the firm.

What Do Investors Look for in Start-ups While Investing?

Before investing in any start-up, Vijoy says he looks first and foremost at the qualities of the founder and team. The other factors that Vijoy looks at include competence of founder, ability to hold the team together and the history of success. He adds one of the most paramount factors is to analyze if the founders are operating ethically or not.

Qualities of the founders are one part of the assessment process before investing. The other part is evaluating the market. According to Vijoy, “After we have become comfortable with the founder, we look at the market size, whether India is ready for the product or the service.”

He explains that consumer experience for the product or service also helps them tap potential investments.

What Have You Learnt from Entrepreneurs?

When it comes to learning from entrepreneurs, Vijoy shares that there are a “bunch of things”. He is particularly inspired by how entrepreneurs have to juggle several hats and that so much needs to be chased in the journey of entrepreneurship.

He shares the example of Rohan Mirchandani, co-founder and CEO of Drums Food International, which hit headlines after its yoghurt brand, Epigamia, tasted success in the market as well as among investors.

Vijoy says Mirchandani taught him how a counter-intuitive approach can become a disrupter in the Indian business ecosystem, “He started a Greek yoghurt company in a country where people are still accustomed to make dahi at home.”

He says that sometimes obvious answers don’t provide the best of solutions and inadvertently, counter-intuitiveness becomes a key disrupter.

Focus for Future

Vijoy says that focus sectors for investment will definitely include hospitality, travel and tourism because he “enjoys” being a part these sectors.

He says the sector has immense potential as consumer behavior towards this space is also tilting favourably, “Indians are arriving at place where they want to pay for premium services.”

The other space is alcoholic beverages. “The era of whiskies has passed. Millennials are today looking at innovative cocktails.”

He says he is on a lookout for home-grown craft, gin vodka brands which “will take the country by storm”.

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