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Tag Archive : attention

Artha Corporate Connect

During my 3-week, 3 continent tour I fell out of the habit of writing my daily blog posts. Even after I returned I kept putting off restarting until “tomorrow”. Then last night on the drive home, I heard Shashi Tharoor’s interview on the radio, announcing the launch of his latest book. During the interview, the RJ asked what advice he would give to budding writers that are just starting out their careers. His answer encouraged me to climb out of the procrastination vortex and start writing again. His exact words were, “the only advice I would give to a budding writer is to keep writing”.

So, thank you, Mr Tharoor… and here we go again!

Today Artha will be publicly testing out service for our 57 (soon to be 61) startups to connect with

  • Larger companies
  • Other startups in our portfolio
  • Legal, compliance and service professionals

Over the past 3-4 months, we have been testing this out internally with excellent results for the startups and companies that we connected them to. Now I am making a public announcement to invite companies of all sizes to look through our portfolio and see if they want to work with one or more of our companies. If you are interested, reach out to us on corporateconnect@artha.group specifying which company you are interested in working with, and we will be happy to facilitate the connection.

This initiative will be led Artha’s very own networking ninja aka Sanjay Gandhi. He will be backed by the support of the Artha India Ventures & Artha Venture Fund investment teams.

53/2018

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The Funded Entrepreneurs Group

I just got back from my trip to Kolkata which was planned in order to introduce the founding team of an upcoming investment to Mr. Aditya Ladsaria of Chaibreak (an Artha investee) and Mr. Miftaur Rahman of Wow Momos (a fantastic venture that I deeply respect but unfortunately didn’t get a chance to invest in). The objective of the trip was to give the new founders the chance to learn from two sets of successful founders that had no previous background in food, yet managed to fund their respective successful food startups from customer capital before raising venture capital. I especially admire Aditya & Miftaur’s razor-sharp focus towards addressing the customer’s needs through constant innovation in both, the product and operations.

I was a mute spectator (for the most part) in the conversation between the new founders and the experienced ones, but thoroughly enjoyed listening to their detailed discussions about operations, product innovations, customer loyalty management, HR, etc and all the other topics that concern building a business, except “how to raise money from VCs”. This experience gave legs to an initiative that I have wanted to launch for the last 8-12 months i.e. the Funded Entrepreneurs Group.

The idea is to put a group of founders that have already raised money (seed, angel, pre-series A, series A, etc) into a conference room for a couple of hours every 4-6 weeks to talk about matters that only another founder that has raised money can relate to – ‘how to build the venture!’ The discussion shall take place behind closed doors with no recording so that any founder from any stage of the business growth cycle can ask questions – no gyaan sessions only mutually beneficial universal learning.

I strongly believe that when a founder learns the solution to a problem from a fellow founder who has faced a similar issue and managed to overcome it, the solution seems more do-able and the problem less enigmatic. This will also help form a stronger and more cohesive ecosystem for all entrepreneurs. Going forward, the group can also share business leads or transact with each other and the possibilities remain endless, but for now, lets stick to getting a first meeting done.

Artha helped organise a meeting in an open discussion format for angel investors under the age of 50, with a minimum of 5 investments with a similar objective of learning from each other’s experiences. Those meetings have successfully been going on for the past 11 months with beneficial results for all the participants. Currently, the discussion has graduated to deal sharing and evaluating each other’s investments.

My team and I are excited to be able to organise the first Funded Entrepreneur Group meeting for the founders of our ecosystem. The meetings won’t be sponsored by anyone so that the attendees’ independence will be maintained, but there will be a thorough scrutiny of each person that attends to ensure the sanctity of the event. The exact costs of the event shall be shared between the attendees but I do not expect the cost to exceed 500-1000 per attendee inclusive of tea/coffee and a snack.

So, if you are an entrepreneur who

  1. Has raised outside capital
  2. Are willing to share your experiences to help another founder
  3. Are interested in meeting other founders to build your business

Then email us on feg@artha.ventures with

  1. Your full name
  2. The name of your venture
  3. Link to the article announcing your latest funding round
  4. Your mobile phone number(s)

If there is enough interest, I would love to organise the first FEG meeting in 2-3 weeks (based on everyone’s ability). Email us as soon as possible!

30/2018

Desperation is the Name of the Game

If all things are equal between two candidates that want me to be their mentor, what would be the difference, that would make all the difference? No, it’s not how equity you will give me or how much respect you have for me… The correct answer is – desperation.

I am not referring to the desperation to get time, money or references, but the desperation that burns through the eyes and words of the prospective mentee to succeed. The desperation that cannot be dissuaded by failure, drowned out by rejection or simply because they didn’t get an immediate response from someone they attempted reaching out to for help. I am referring to that desperation that will make a person turn the world upside down to get what they want – yes that desperation.

In a world of unlimited opportunity, this is the kind of desperation I look for, to decide who I should devote my limited time (a precious resource) to. A person must innately want to achieve the skill he is seeking my mentorship for, and not only be attempting to achieve it because he ‘has to’. This distinction leads to a visible difference in the amount of passion and desperation a person exudes.

The lack of this type of desperation and conviction in the importance of achieving that skill doesn’t bode well for my ROTI (Return on Time Invested).

So, if you think I’m being arrogant, standoffish or aloof to your call for help, I am only checking to see if you are as desperate as you are making it out to be.

29/2018

Magnum Ice-cream Ingredients!

As I pulled open the wrapper for an essential part of my movie-going experience ie the Almond Magnum ice-cream, the whiff of chemicals that went up my nose almost made me vomit. Surprised that my innocuous ice-cream smelt like a chemical lab I investigated the ingredients that made this marvel – they induced a second vomiting episode.  

Ever since I read The Wild Diet by Abel James I have started an inquisition into the foods I regularly consumed. What I have found out is nothing less than startling. The more I read into I regularly eat, the less I have been eating of them. The “empty calories” consumption has been replaced with nutrient-dense foods and has led to remarkable improvement in my energy, metabolism, attention span and (most importantly) my waistline. However, I did not expect the Magnum bar to disappoint me as it just has 

Here is the list of ingredients in an Almond Magnum Bar from their website: 

Screen Shot 2018-03-04 at 5.29.37 PM.png

On first look, many of these ingredients look harmless. However, when I started researching each item I realised how creative writing has made the dangerous look harmless.  

Take for example the “permitted natural colour (beta-carotene)”. WebMD explains that Beta-carotene is one of a group of red, orange, and yellow pigments called carotenoids. Beta-carotene and other carotenoids provide approximately 50% of the vitamin A needed in the American diet. Beta-carotene can be found in fruits, vegetables, and whole grains. It can also be made in a laboratory 

The explanation taken at face value made it appears that beta-carotene was good for health. However, there is a catch. The beta-carotene in this ice-cream bar was used to make the almonds appear redder than they are therefore this beta-carotene was lab produced and did not occur “naturally”. So, what are the side-effects of this lab produced supplement?  

There is growing concern that taking high doses of antioxidant supplements such as beta-carotene might do more harm than good. Some research shows that taking high doses of beta-carotene supplements might increase the chance of death from all causes, increase the risk of certain cancers, and possibly other serious side effects. In addition, there is also concern that taking large amounts of a multivitamin plus a separate beta-carotene supplement increases the chance of developing advanced prostate cancer in men. 

And if you are a smoker you should be reading this:  

In people who smoke, beta-carotene supplements might increase the risk of colon, lung, and prostate cancer. Don’t take beta-carotene supplements if you smoke. 

All this just from the colouring used to make the almonds look better! 

To go through all the other ingredients in detail would take up 3-4 pages so I made this table explaining the ingredients in that single stick of ice-cream. 

Ingredient  What is it made of?  Side effects  Source 
Vanillin  A petrochemical i.e. phenolic aldehyde, which is an organic compound with the molecular formula C8H8O3  Allergic reactions, digestive disorders and migraine headaches  
  1. Melt Organic 
  1. U.S. National Library of Medicine  
E322 – Lecithin  Lecithin is a fat that is essential in the cells of the body. It can be found in many foods, including soybeans and egg yolks  Lecithin is LIKELY SAFE for most people. It can cause some side effects including diarrhoea, nausea, abdominal pain, or fullness. 
  1. WebMD 
  1. CureZone 
E471 – Monoglycerides & Diglycerides   Monoglycerides and diglycerides are food additives commonly used to combine ingredients containing fats with those containing water, two types of ingredients that don’t ordinarily combine well.  They are similar to triglycerides, the predominant fat in food according to the Harvard School of Public Health, except they are classified as emulsifiers rather than lipids 
  1. CureZone 
  1. LiveStrong 
E410 – Locust Bean Gum (Carob Gum)  Locust bean gum is a galactomannan vegetable gum extracted from the seeds of the carob tree, mostly found in the Mediterranean region. 

 

It is a thickening agent and a gelling agent used in food technology 

Carob is LIKELY SAFE for most people when taken by mouth in food amounts or as a medicine. There don’t seem to be any unwanted side effects. 

 

Pregnancy and breastfeeding: There is not enough reliable information about the safety of taking carob if you are pregnant or breastfeeding. Stay on the safe side and avoid use in greater than food amounts. 

  1. WebMD 
E407 – Carrageenan   Carrageenan is a common food additive that is extracted from a red seaweed, Chondrus crispus, which is popularly known as Irish moss. 
  1. Research has shown that exposure to carrageenan causes inflammation and that when we consume processed foods containing it, we ingest enough to cause inflammation in our bodies 
  1. Drug investigators used carrageenan to cause inflammation in tissues to test the anti-inflammatory properties of new drugs 
  1. CureZone 
  1. Dr Weil 

 

E412 – Guar Gum  Guar gum comes from the seeds of the guar or cluster bean plant. About 20 percent to 40 percent of the guar seed consists of galactomannan gum, which forms a thick gel when mixed with water  Guar gum is LIKELY SAFE for most people when taken by mouth with at least 8 ounces of liquid. The water is important because it reduces the chance of choking or developing a blockage in the intestine. 

 

Side effects include increased gas production, diarrhoea, and loose stools. These side effects usually decrease or disappear after several days of use. High doses of guar gum or not drinking enough fluid with the dose of guar gum can cause blockage of the oesophagus and the intestines. 

  1. CureZone 
  1. LiveStrong 
  1. WebMD 

 In a nutshell, my ice-cream included petrochemicals, thickening agents, seaweed extracts and so many things that I shouldn’t be in an ice-cream. I couldn’t bring it upon myself to put that chemical experiment in my mouth, so I threw it away. I suggest you do too.  

28/2018 

KISS for your Investors

Imagine that you have been invited for a stand-up comedy show of a well-known comic. You are excited about the show, arrive well dressed with a date in arm, get your favorite drink and are sitting in the front row with bated breath. Then your comic comes on stage, everyone starts clapping (including you), the atmosphere is full of excitement and anticipation. Just as the comedian begins to speak, you realize that his act is in Russian, Spanish or Klingon i.e. whatever language is completely foreign to you and the audience. For the first 3-5 minutes, you try hard to understand what he is saying then look around to see a similar look of bewilderment on everyone’s faces. Some people leave almost immediately, and the remaining make heckling sounds, the artist looks bemused but act continues, rooms starts emptying out and finally you, who has checked out mentally a while ago, decide that it had been enough and join the beeline to the exit. How inclined are you to attend a show with that comic in the line-up the next time around?  

Unfortunately, several founders are guilty of being that incomprehensible comic. Using acronyms or words that only your peer group understand may give the smart founder several accolades at startup events but leave investors (like myself) flummoxed about what the business really does. In fact, I feel that if a founder cannot explain what they do in layman’s terms to someone who has no knowledge of the technical jargon of that industry, then the business is too complex for me to invest in. A founder may feel short-changed because as an investor, I am supposed to be “in the know” but the truth of the matter is that I am not supposed to be the knowledgeable person in the room about their industry, the founder is!  

This video from the show Silicon Valley aptly explains what I fear as an investor 

A founder that is unable to explain what their business does to me in terms that I understand, is running a business that most customers won’t understand. To educate a customer entails a long sales cycle, and I find it is best to avoid such long-tail plays. However, when a founder is able to explain a complex model in simple terms, it gives me immense confidence in the fact that prospective customers will understand it too and therefore not hesitate to adopt it. Not only that but also the founder will easily be able to train lay people on selling his/her product or service and achieve targeted sales without hiring expensive talent. For the investor to have such confidence has tremendous value.  

Here are some of the tools that founders can use to explain complex business models:  

  1. Paint a picture of what their target customer currently does to solve the problem and how their product/service will change their life  
  2. Dumb things down by using simple everyday terms that anyone can understand 
  3. Use check-backs like does that make sense? to ensure that your audience hasn’t lost you 

There are many other techniques that founders could use to present an impressive but comprehensible pitch. The best way to test a pitch is to present to the most challenging audience i.e. people that wouldn’t understand their business at all. These unfriendly audiences will force you to KISS (Keep It Simple Stupid) for the investor, which is exactly what we are looking for!

So, don’t try to challenge the intelligence of the mere mortal investor and just KISS for us!  

23/2018 

Why We Must Become that Asshole Investor (from time to time)

2018 started off with a bang for Artha India Ventures. 4 of our portfolio companies successfully raised new rounds with pre-money valuations of more than $5 million. As a team, we are very happy with the solid multiples that we received on our investments and it validates our thesis of getting in early, building solid value and increasing wealth for all shareholders. These are the times when we look forward to celebrating with our founders for a job well done and to wish them luck on the new journey that has just begun (with the incoming investor).

However, there are a couple of founders that bring forth disturbing issues at the time of signing documents that hold up the entire round of investment. Usually, I can classify the issues that force this reaction into two buckets. The first and most contentious issue is the diktat issued by the incoming investor to disallow any of the previous investors from participating in the new round.

As an investor who invests in multiple stages, we have specific clauses in our investment documentation that allow us to participate in future fundraising rounds of a company. Whatever the logic the new investor can provide (more on this in a later post) we as the early backers of the venture expect the founders to stand up for us and remain loyal to their word and contract, that were negotiated and signed when we initially decided to back them. While many founders ensure that we get to participate in the new round (thank you to them), we do not have sympathy for those who behave this way even without being coerced by another investor.

At the time when these founders needed the money, they eagerly signed the documents with these terms clearly being stated, but when it comes to actually following through for a follow-on round they want to cry foul. To completely sell yourself to the incoming investors and screw over your earliest backers doesn’t bode well for our ecosystem. Firstly, the new investors will only put in stronger clauses to ensure the same doesn’t happen to them in the following round and secondly, the later investors will be way more cautious and hesitant when considering the opportunity to participate because of your past behavior towards investors.

Unfortunately for them, Artha does not respond well to oppression tactics and while we can understand the occasional tough spot a founder finds himself/herself in, the founder cannot always cry wolf.

To be involved in a bitter conflict at a time when we should be celebrating victory is a situation I want to avoid at all costs, but founders need to understand and respect that just like them we too are running a business and to deny us the rights that we mutually agreed before entering the relationship, tinkers with our business model. Just like they would not like to tinker with a business model that is doing well – neither do we!!

21/2018

 

 

6 ways a founder can get our attention

On a given day there are at least 10-15 investment proposals in my inboxes at LinkedIn, Facebook and Office365. Dhiral and Nikheel have almost the same (or more) flooding their inboxes and in fact even our recently added superstar, Apurva, has her hands full with sifting through the proposals in our pipeline. The team tries very hard to give due justice to each application and each founder wants their venture to be looked at with priority.

If we made everyone a priority, then no one would be a priority! So, until now we typically screened and sorted the applications using an internal scoring system but the flood of proposals has made that system redundant.

I would like to provide some method to the madness by making it open to everyone how we rank for priority the applications that come to us for funding so a founder can help us help them.

A referral/recommendation is the best way to walk into a sale whether you are selling widgets or shares in your company as the buyer is warm lead instead of a cold call. A warm lead brings down the customary wall of distrust and makes the job easier for the seller.

Right below, you will find (in order of preference) the referral (or recommendation) waterfall to get our top priority.

 

  1. Founder referral

A founder’s referral is gold to us… we take them very seriously!

When we have backed a founder to buy shares in their business and then they vouch that you are the next big thing, we are going to give you a priority pass to the top of the pile. With 51 investments (and 3 in closing) there are over a hundred founders that know us. The founder ecosystem is small so find out how you know them and get them to write an email introducing you to us and why they recommend you.

Our list of investments is updated regularly at this link

 

  1. Co-investor referral

The next person we trust after our founders are our co-investors. These are the people that been with us on multiple safaris of the startup amazon where we were the hunted or the hunters so we trust their opinion of you and your venture idea.

Our co-investor list runs into the hundreds so there is a good chance that the investor you are speaking to knows us and all you should do is convince them to write an email introducing you to us and you will make it to the top of the pile!

 

  1. Incubator/Accelerator Referral

Incubators and Accelerators play an important role in our ecosystem by nurturing napkin stage ideas into coherent business models. We respect their opinion and are in regular touch with many incubators and accelerators. If you were part of one of their programs, then you should ask them to recommend you to us and we will be all ears!

 

  1. Fund Referral

There are many funds that find ventures that do not fit their investment mandate because they are too early or too late for them (or a host of other reasons). In my opinion an entrepreneur is a salesman selling shares so he/she has to make a close at every sales call.

Therefore, if a fund gives you the shaft, ask them to give you a recommendation to Artha… we will gladly nurture you till you are ready for the big boys!

 

  1. Business Partner or Family referral

Within our extended family and their various businesses, you may find a link to get through to Artha. Be advised that coming through such a referral puts all three of us (you, the referrer and us) in a very awkward situation.

Whilst it isn’t the most preferred avenue for approaching us, it isn’t the least preferred road. If you cannot find favour amongst the top 4 options, you can always bank on our extended family and their business partners! J

 

  1. Come through an angel network

There was a time where a deal recommendation email from an angel network would make me drop everything. The proliferation of angel networks, the conflict of interests in their recommendations and founders opting to stay away from networks have reduced our reliance on angel networks for deal discovery.

There are still a few good angel networks who we trust so get a good network to recommend you to Artha… it is better than coming in cold!

 

If you don’t know any (really!) then you can apply to us directly by clicking “Apply Now” on our website but when you claim that no one knows you (or will recommend you) then you can imagine how difficult it would be for us to take you or your sales ability seriously.

Getting a referral is a big deal so take it seriously, get your sales cap on and get someone to recommend you to us!