The other side of my entrepreneurial life in the past two years has been the ten-odd investments that I have done in other companies. This has given me a perspective on what it means to sit on the other side of the table. I have a few ground-rules for the investments that I do. Firstly, it should fit in with my core vision mobiles, broadband, emerging technologies, and emerging markets. Secondly, I should be able to add value I do not want to make investments purely for the sake of financial returns. In fact, in every company I invest, I mentally write off the capital the day I invest. So, if it is something I am going to lose sleep over, I’d rather not invest. Finally, I must like the founder or the founding team. The bet is on the management. While the idea is important, from my own experience I know that over time ideas evolve. The people managing the business are what can make it a success. My investment is in them.
I don’t end up discussing valuations much. They need to be reasonable but I will not bicker over specifics. I also don’t expect any special treatment there are no long-winded documents that I create. In fact, there has been no lawyer involved in the investments that I have done (and where I have been the sole investor). I sit across the table with the entrepreneur and make the call. My take on valuation is that if the company does well, all of us benefit. If not, that discussion is irrelevant anyways. So, why bother as long as there is a reasonable, fair offer.
I have done two kinds of investments so far. In three companies (Novatium, Seraja and Rajshri Media), I have helped get the companies off the ground. My day-to-day involvement after the early stage is minimal all the three companies have experienced CEOs in Alok Singh, Arun Katiyar and Rajjat Barjatya, respectively. My best value-add is in brainstorming with the CEOs once in a while on the future direction. The second type of investments have been in existing companies which I have felt are in line with my core thesis. These include Midas, n-Logue, New Horizon Media, PubSub (now defunct), Mobifusion, mchek and ValueFirst. They also help me learn about new areas. A few areas that I am looking at for the future are in energy, education and healthcare.
My one constraint which I have begun to feel now is personal bandwidth. Given that I spend most of time hands-on as CEO in Netcore, it does not give me much time with other companies. Netcore is at a critical stage now as we go to market with the platform and services that we have been developing over the past year. It requires a lot of my time. And then, there is my blog that I need to update (takes up at least 30-45 minutes daily on average) and a year-and-a-half-old baby, Abhishek, whom I need to spend time with. I have not built a separate team to oversee the investments perhaps I should. But I have felt that the value-add in most cases has to be me, and that is hard to delegate.