Co-investing can mitigate high risk of early-stage funding, says Sanjay Nath, managing partner, Blume Ventures
Early-stage VC fund Blume Ventures, started by Sanjay Nath and Karthik Reddy in 2010, has been active this year, closing around 7-8 investments this year itself, all as a co-investor. Though sector-agnostic, the fund clearly has a preference for start-ups with niche products.
In an interaction with Techcircle recently, Nath elaborated the early-stage funding scenario in India. According to him early-stage funding has its advantages as it provides the flexibility to move out of the portfolio company when a bigger round happens, without having to wait for acquisition or IPO of the company.
By investing in tranches, working primarily on a co-investment model and choosing companies that have a proper team in place, the high-risk factor can be somewhat mitigated, according to Nath.
"We like the philosophy of co-investing," said Nath. Blume's investments in product review platform Reviews42 with VentureEast, gaming startup Rolocule Games with Mumbai Angels, online taxi booking site TaxiForSure with Accel Partners and Helion Ventures and many more vouch for the effectiveness of its co-investing philosophy.
(Edited by Prem Udayabhanu)