The early-stage investors on how they struck gold with some of their portfolio companies such as Ola and Mamaearth. And why their mindset is closer to that of an owner of the business
Rohit Bansal and Kunal Bahl (sitting), co-founders of early-stage venture capital firm Titan Capital. Image: Madhu Kapparath
Early-stage investing is a high-risk game. The odds of a business not being able to scale-up are much more than it becoming a market leader. There is no factual evidence to guide investors. Then what makes them bet on a new founder?
“There is no business most of the times when you meet the team, but to be successful at anything in life requires a certain degree of grit,” say Kunal Bahl and Rohit Bansal, co-founders of early-stage venture capital firm Titan Capital, who are also entrepreneurs and were among the first to enter the ecommerce industry when they founded Snapdeal in 2010.
In part two of an interview on Forbes India Pathbreakers in October, the long-time friends and co-founders of AceVector Group talk about why they donned the hat of investors. “We got into investing primarily to help founders,” they say. “We met some of the earliest founders [such as Ola’s Bhavish Aggarwal] very serendipitously.”
Titan Capital’s portfolio companies that delivered 100x returns include Ola, Mamaearth, Urban Company, and Credgenics. They share what makes them back founders and pick winners. “It's the spark in the founder that makes us tip over because there can be many academic reasons to say yes or no. But the biggest reason to have conviction in whether to pull the trigger or not is some quality that you've seen in the founder.”
Titan Capital does not raise funds from the market for investments. Since Bahl and Bansal invest their own capital, they do not have a fixed holding period or the pressure of earning high returns for their investors. “We are not running a classic fund so we can stay invested for 25 years if we want,” they explain. “I think our mindset when we invest in a business is closer to that of an owner of the business than that of a person who is trading in the stock of a business.” Edited excerpts: