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Venture Capital

Entrepreneur-Led Venture Capital Funds

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With the nations worldwide slowly starting to open up their economies, we’re seeing a rise in startups gearing up for funding.  Just this past week, over $448.44 Mn were raised by the Indian start-ups across all domain. Founders are facing a difficult environment for funding and seeking support, as the pandemic is also becoming a major reason for investors everywhere playing safe and not writing as many bold checks as before. 

When it comes to situations like these, it is a good time to let the light shine on the entrepreneur-led VC firms. Since they’ve been founders before and been there in your shoes, they’d know exactly how to navigate through the rough waters, when they come in and go. 

In countries across the world, entrepreneur led VCF are extremely popular and successful in driving in founders with ideas that can change the world. On the other hand, the VC industry in India is still in its growing stages, with already established names leading the game. However, we’re noticing a promising change with many high-profiled entrepreneurs and prominent businesses launching their own Funds in order to fund and support budding entrepreneurs. Windrose Capital is also one of the first-generation entrepreneur-led VC firm in the country that leads with the ‘Founder-First’ approach in all its operations. 

In the past few years, many successful entrepreneurs launched various funds and schemes to support like-minded budding entrepreneurs, providing them with funds, guidance, emotional support and first-hand knowledge about the industry. Although this trend is not yet fully caught on like in the other mature economies, we’re seeing a rise in preference of entrepreneurs led firms over established VC firms. Studies reveal that many founders would rather work with a firm that is led by or has an entrepreneur in the team. There are obviously many reasons to this, being entrepreneurs ourselves, it becomes natural for us to identify, take risks and realize potential in unconventional ideas that could add a lot of value in the eco-system.

For many founders, picking a VC is more than just money, it’s the support and stability that matters as well, after all VC is a source of capital but VC Portfolio Management goes beyond money management. Partners here take a bet on the founders more than anything else and stress upon the founders’ problem-solving capabilities more than the business model. With COVID-19 changing the business dynamic, right now more than ever, stress lies on the relationship a Fund manager has with his founders. They have to pivot their offerings to suit the market conditions, and this can be a very tough call to make. With fund managers or partners who’ve been at the same place before, taking this call becomes a little less complicated. They’re often more empathetic, supportive and better placed to realize the potential of new ideas and guide the founders through rough patches.

Fund managers who have built and scaled businesses themselves, are cognizant of the fact that things don’t flow smoothly most of the time. They can teach versatility in dealing with operations that are quite beyond control and can teach the importance of frugality, when you’re running a tight ship with limited capital and resources.

As a firm that was started with the intent of leading with a ‘Founder-First’ approach, we are confident that the country will see a significant rise of such firms in the future. The level of deep relationship entrepreneur turned VCs have with their founders can help scale the business and learn valuable skills. Connections that these Fund Managers have within their network can also be leveraged for various aspects of their business such as business expansion, strategic alliances and more. With COVID-19 already disrupting the norms, we’re bound to see such firms being sought after by budding entrepreneurs for support, guidance and reassurance.

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