From Polo to Venture Capital

I transitioned to venture capital in 2019. It was a drastic change from a fulfilling career in Polo. The startups developing revolutionary technology and the impact that they would create surprised me. I got hooked from the very first day I realized that there was a lot more exploring for me to do. Since then, I have met several founders. To understand their business model, I have developed a methodology that would make it easy for me in a matter of minutes, and I could dig deeper. This method helped me get into the finer details by the end of the interaction. What amazed me is the role polo had to play in this. Polo is referred to as the “sport of kings” given its long history and heritage originating from the northeastern state of Manipur, India. A player’s performance gets measured on four main criteria viz horsemanship, strategy, team play, and knowledge of the game. That I can implement what I learned during my stint of playing full-time Polo is serendipity. I believe that Polo and venture capital are similar in many ways. I can translate the four criteria to measure a polo player’s performance in evaluating a startup: I. Horsemanship a. In Polo, horsemanship is the technique a rider uses to ride a horse. b. In terms of evaluating a startup, I would equate horsemanship to the founder’s ability to grow and scale the company in the future. II. Strategy a. In Polo, strategy relates to the players’ ability to think ahead of the game and be able to arrive at the ball at the correct time and to be alert enough to block the opponent even if he/she does not have the ball. b. In terms of a startup, the tactics of product placement and go to market strategy would be of equal importance. III. Team play a. In Polo, the team coordination and the need to work as a unit is of the utmost importance to win a match b. In simple terms, this relates to the importance of having a coordinated and well-functioning team to keep them motivated to improve (do better) daily. IV. Knowledge of the game a. In Polo, the players’ understanding of the rules and regulations of the game and their ability to bait an opponent to make a foul makes a huge difference. b. For a founder, it is of utmost importance that they understand the industry they are operating in, along with an in-depth knowledge of their competitive landscape, so that they work where the ball is going to be and not where it is right now To summarize, the learnings and skills acquired from playing Polo have broadened my perspective. It has helped me in evaluating startups from different vantage points, allowing me to relate the inner functioning (nitty-gritty) of a company as if it were an ongoing match.

5 Things I Learnt After A Year in Venture Capital

I finally completed a year in a Venture Capital Fund, and I believe I have or am about to earn the right to be called a “Venture Capitalist.” Looking back at the year gone by, I have learned many new skills required for my daily duties. Even though I have been an active investor since I was 18 years old, focusing on investing in listed companies, there is an immense difference in how listed companies and startups evaluated. I have highlighted a few of the key differences: · Lack of primary database: There is no database/screener to filter the prospective company based on your investment philosophy. The evaluation process requires a hands-on approach to understand the inner workings of the venture. · Founder’s background: Even though this is crucial in both listed companies and startups, the need to evaluate a startup’s founder is more centric as the venture has not yet proven that it will have perpetual existence. · Investment risk: Venture capital investments are much riskier as compared to stock market investment as the company does not have a proven track record making a case for the investment proposal. However, venture capital investments do provide a high return when the investment decision is right. · Importance of negotiation: While evaluating the intrinsic value of a stock, there are multiple approaches one can take, such as a DCF (discounted cash flow) valuation model or enterprise value. The process to value a startup is more to do with the investor’s negotiation or bargaining skills to bring the valuation down to the desired level. · Portfolio Management: Portfolio management is by far the most significant difference as it is not restricted to monitoring price movements and the financials of the company. It entails much more as it focuses on helping the company grow its business in whatever way necessary. Even though there are many more differences, it is a great thrill to be working with and evaluating startups. I look forward to my next five years in VC investing and hopefully managing a fund of my own!