Founders must have their skin in the game, yet find time to unwind
Entrepreneurs must ensure that they never become bureaucratic in their approach. A strong team is essential for success. Human capital is a key part of the entrepreneurial journey. While founders must lead a frugal lifestyle, they should go for an occasional break/vacation. Work-life balance can be achieved through regular exercises and by decreasing work-related commute.
At GHV Accelerator, we follow a scientific procedure for evaluating investee firms. We focus on T.E.S.T. (team, execution capabilities, scalability & tech) and PoC (proof of concept) before making an investment decision. We look for a strong team with stellar execution capabilities in all our startups. Human capital is a key ingredient of success. In startups with strong tech play, it's imperative to have a seasoned techie as co-founder. We typically like to invest in startups that are in the pre-seed stage and past the idea/beta stage. We've been a sector agnostic investor up until now. However, we have a preference for startups that have a strong tech play. Several things can go wrong in one's entrepreneurial journey. Sometimes, even the best strategy can backfire. There isn't a one-size-fits-all approach. What works for one startup, might not for another one.
Bootstrapping and cash burn
Entrepreneurs must have their skin in the game to shore up investor confidence. Though bootstrapping may seem limiting, it is vital, especially in the initial days of the venture. Again, there cannot be a one-size-fits-all approach. Yes, high burn rate of cash is a matter of concern for the Indian startup ecosystem. At the end of the day, the balance sheet has to be healthy. Investors need to see growth in revenue and profits. Burning cash can otherwise be a never ending process. I have noticed that several startups which command higher valuations in the initial stages end up being cash-strapped. These are unhealthy signs for the industry and could lead to a doom-like scenario.
Reduce your daily commute by working from home. Entrepreneurs end up spending time in stressing over traffic and other commute-related woes. An entrepreneur cannot afford to lose energy in commuting. It would make him/her less productive. I recommend all our investee firms to live and work from the same place. Yes, the juggling act may be difficult to manage initially. However, when the commute time reduces to under five minutes, entrepreneurs realise how much more they are able to pack in. I also recommend regular exercises. To be 'bitcoin' rich one day, you've got to be 'fitcoin' rich today. I personally believe in being frugal.
Comparisons with the west
Americans are ahead of us in innovation. While we are not really reinventing the wheel, Indians have the virtue of 'jugaad' or the ability to think frugally. The US has economies of scale while India has economies of human capital. However, there is a huge difference in the work culture of both countries. We are sadly stuck in a very bureaucratic way of working. I see a lot of extremes. Several Indian entrepreneurs are only interested in defining themselves through what they do and what they make, unlike the west where people take up proper hobbies and go on vacations. Entrepreneurs must work hard but give themselves enough time to party harder.
Angel investor Vikram Upadhyaya is chief mentor of Green House Venture (GHV) Accelerator. Launched in October 2014, GHV provides seed-stage capital to Indian startups. It has plans to on-board 25 startups by early 2017. GHV has already invested in tech firms such as FitMeIn, PickMyLaundry, MyTaxiIndia, LazyLad and FoodPort. As an angel investor, Upadhyaya has put money in LogiNext (which recently raised $10 million from Paytm), Druva Software and OrangeScape among other firms. He is also a founding board member of IAN Incubator.
As told to senior assistant editor Adith Charlie.