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Decoding life as a junior VC
Nitisha:
Welcome everyone. A while back we were just discussing what is the role of an analyst or a junior at a VC fund and i think this has been a perennial topic in all my conversations with my friends and colleagues in the ecosystem or people who want to join the ecosystem and clearly, right, you’ve donned like multiple hats throughout your career. So starting with your Apple job and then doing your Masters and then starting your own startup Baazee and then of course co founding Matrix Partners.
So i think it’ll be best to listen from the horse’s mouth as to what does he feel about it.
Avnish:
So first of all, Nitisha, thank you. i’m so happy that you not only raised this topic with me but you volunteered to say that let’s do a podcast together. i think it takes a certain level of initiative and i really, really appreciate that. i hope it’s useful, i think to your point we’re trying to answer questions for people who are junior VCs who are thinking about VC or currently in VC but also female participation in VC. So i’m very excited to be here and in this kind of a setting and all of us here together and looking forward to answering whatever you throw at me.
Nitisha:
Yes. Really excited for this one. So for starters, right, let’s talk about what do you think is the role of a junior VC in a fund?
Avnish:
So, you know, let’s go back to why did we -- so typically if you look at the US which is where the Venture Capitall industry kind of started. it’s a very top down industry, there never used to be analysts, associates. Until very recently if you ask me it’s always been partner driven. What is the -- if you look at the last few years you’ve been here a few months, what is the average age of a founder that you interact with?
Nitisha:
Probably somewhere between 24-27.
Avnish:
What is the average age of the VC partners in the VCs.
Nitisha:
Do you really want me to say it out?
Avnish:
Therein lies the answer. So increasingly it is and by the way now also there’s a dichotomy, there is a set of experienced founders maybe my age somewhere in that cohort, late 30s, 40s, and there is a set of junior not junior younger founders. And we have to cater to both and the networks are very different. Also this is a disruption business an innovation business and technology changes very fast. And i’m hazarding a guess that you’re on instagram reels, you’re on Snapchat, i’m not.
Nitisha:
Yeah.
Avnish:
So if you ultimately see what is a Venture Capitall business it’s about spotting trends and then it’s about networking with the founders. We have to do both at both ends of the spectrum of age and therefore unlike the US and i believe the US and some of these mature VC markets have evolved to this now that you have to have both. That’s how the thought came, this was like maybe 4-5 years ago. i remember it came a lot from the iiT, originally it used to be a lot of this iiT ecosystem.
So iiT Bombay actually a lot of it was iiT Bombay initially. And now obviously thankfully it has evolved to female as well as non iiT, non engineering backgrounds, but that’s where it came. Trends and networks, and both are relevant at different maybe vintages, ages, whatever you want to call it. And so the core role is are you abreast of the trends in your cohort. What is happening in your cohort?
i’ll give you one more example, like in Fintech credit cards is something that a older cohort uses, younger cohort uses BNPL a lot more. So things like this and then network, so i think that’s the core part of the role. But you’ve been here now for a while so what do you think?
Nitisha:
No, i completely agree with you, Avi. i think analysts definitely bring a fresh perspective to a lot of things. i have been in those meetings wherein like especially you’ve called out that, Nitisha, how do you feel about this product. i think you have been privy to this sector or probably this part of the tech more than me. So i do believe that there is a certain level of aggression, i mean not talking about myself but like i would want to believe so. There’s a certain level of aggression, some hunger like really go there and like find whatever it is and just do it right. So i do believe that, maybe it’s with the age factor, because this is the first job and it’s like a do or die and you just want to make everything out of it.
Avnish:
Yeah.
Nitisha:
But i completely agree with you.
Avnish:
And i think coming back to this perspective and i know somewhere here we will just go with the flow of our discussion i know you were going to ask me about one of the books. You know, there’s a book that i swear by and i know you know it’s called Super Forecasting. And the core part of that super forecaster is if you’re a super forecaster -- so just for everybody’s benefit a super forecaster is a person who will have a judgment about the future which is more accurate than anybody else.
And they’re not geniuses, there is a certain approach they take and the approach they take is very open minded, very outside and very curious but very diverse. Very diverse point of view. And i think that younger female non engineer background all of this adds to a diverse point of view. So it’s for better decision making.
Nitisha:
Yeah. i think this brings us to my next question which is actually the recipe of the trade like what does one need to do to crack into the VC ecosystem. So i remember i think your interview even when i was interviewing for Matrix was the most interesting one including some puzzles also, some role plays across like different, different positions that you can have. So just for the benefit of viewers who are currently not in the VC ecosystem but want to be there someday what do you really think are the 3-4 qualities or traits that they need to nail for being able to crack into this world?
Avnish:
So Salonie is sitting over there so i have to always plug other Matrix Moments so there is a Matrix Moment on intrinsics and extrinsics and i think it would be beneficial for people to listen to it because that’s where it comes from. But i’ll tell you the single best definition of a Venture Capitallist, not of any other investor, of a Venture Capitallist that i’ve heard is wide angled polymath. And you have to unpack each of those words.
So polymath is somebody who has reasonable amount of knowledge about various fields. And wide angle is somebody who has a very wide perspective generally meaning open minded. So are you born with that or can you acquire that?
Nitisha:
You can acquire that definitely.
Avnish:
So how would you acquire wide angle, how would you acquire polymath kind of skills. You’re just very, very curious, you’re always learning, you’re always reading. Ultimately this becomes over a period of time a pattern matching business. i’m sure you’ve read the outlier’s book which talks about 10,000 hours. You can if you do the Math 40 hour week times 300 days a year, 40 weeks a year, 45 weeks a year that you’re working. Typically if you do the Math that’s 5-6 years. You can do 80 hour week and it’ll be two and a half years, it’s as simple as that.
So if you put in a lot of input into the right places, read a lot, try to think about what is happening, keep a very open mind i think anybody can become a VC but that’s where it turns. Often what happens and by the way you know that you mentioned i was an entrepreneur, actually entrepreneurs often make the worst VCs because they think they know the answer, they have done it before, they’re investing in themselves not in the founder.
Nitisha:
Was that a learning curve for you as well?
Avnish:
Yeah, yeah. i mean look at my first 5-6 investments, actually don’t look at them. So that’s the number one trait, insatiable curiosity. Now EQ, networking, all of that it matters because we said spot trends and then spot founders and find founders. So networking, EQ, being able to meet people. Now everybody has a different approach to it by the way. You don’t have to be a back slapping ra ra kind of a networking person. You can be a content first networking person.
i know you have had an experience with some of the founders where they reach out to you because they think that you’re adding value to it. So there are different formulas but i would say number one would be of the nine traits that we have in that intrinsics podcast hunger, hustle, great, all of that, yes, all of it is required. if there is one thing that differentiates a great investor from a not great investor it’s curiosity. if you talk about Warren Buffet he still says he reads i don’t know how many books a year. You talk about Charlie Monat he will say i’m still learning.
So the second thing is this growth mindset, willingness to learn, willingness to be wrong, which is very hard initially. And especially by the way i would love your thought on it. You know when you’re starting out in your career anywhere you want to be right, you want to show i figured it out, i knew the answer. if i say i was wrong my boss will think. i think it’s very tough for a younger person to accept that because the reality is you will catch only 20-30 percent of the good deals, like 70-80 percent of the time you’re going to be wrong. if you’re not acknowledging that you’re never going to grow. So how do you think about that?
Nitisha:
No, i completely agree. it’s just as a young or an early person into this particular profession every time there’s a message that okay this deal happened net and i swear there’re like chills down the spine and i’m like how could i miss this. i mean had this just been happening like a week back things would have been so different, right. As if this deal was the thing that was going to make my life. So i agree, i think that’s the case with this 24-25 year old archetype that you were just talking about wherein we think that every particular deal in isolation that we’re seeing is what makes or breaks.
Avnish:
But you know i will tell you that the best investors -- so i think a lot of us even right now at the firm and other firms also lot of us operate out of FOMO. And we have to differentiate between FOMO investing and conviction investing. And i think if you read a lot, if you form a point of -- you know, we want to be more thesis first. We want to be more network first, right, so if you spend a lot of time really forming a point of view, you, me and Dada have done a deal together we had a very clear point of view. We moved very fast in that deal.
Nitisha:
Yeah.
Avnish:
There’s another one where we maybe didn’t have a point of view and we still moved very fast because of FOMO and we’re having concerns also. So you never know, but the formula here is top down, thoughtful point of view. Then the less of this thing met, not met. it’ll be not met but i’m clear why not met and i think that --
Nitisha:
i mean you take your bets and you’ll be happy with it.
Avnish:
Yeah. And in a deepening market there’s going to be enough going around so we have to find our own formula.
Nitisha:
i completely agree, right, and it’s been like one year three months for me at Matrix and i’ve absolutely loved every bit of it be it meeting the founders, forming thesis, spotting the trends and like learning from so many key people in the ecosystem. But like given our discussion earlier, right, i do think that there are some early hiccups or inhibitions which do trouble me sometimes and when i discussed it with my fellow colleagues in other funds i realized that there’s a pattern to it especially for the early investors in the early stage VCs.
So would probably want to touch upon like one or two points from there and would love to get your views. The biggest problem that i face is around validation, right, the feedbacks cycle here is so long. How do i know if i’m doing the right work or not. A part to it could be like if i did a deal and there’s like a good markup to it and whatever next couple of months then is that a validation but then that may depend on like bunch of external factors. How does that tell that i have been doing things in the right way?
Or it could be like how sometimes we say that you focus on the process and if the input is right and the quality of the input is right then things will automatically happen. So how do i benchmark my performance, how do i be happy with what i’m doing, what’s the validation?
Avnish:
So first of all backing up you said you’ve been here one year and three months so first of all i want to acknowledge not just you, your entire cohort, Divyanshi, Samarth, all the people who joined, Tanvi joined around the same time, who else joined, Harshad was already there.
Nitisha:
Rahul joined, Harshad joined.
Avnish:
At that time?
Nitisha:
Yeah.
Avnish:
So you guys joined during Covid so hats off to you guys because i don’t think we met in person until maybe recently, until you were a year into it. So i think the fact this is one of the hardest times, you’ve entered a hard business at a very hard time, at the probably the hardest time. So i think kudos to all of you guys, you’ve done a fantastic job in navigating this space and hopefully we’re -- i don’t know if we’re done yet but hopefully we’ll all navigate this safely going forward.
i think look in terms of validation that was the hardest part for me and partly you had asked earlier how do you decide this is the right career, what are the ingredients. i’ve been an operator, and when you’re an operator an entrepreneur you get results like this. input, output, input, output. Problem in this business is it’s input, input, input, input when are you getting the output. And when you get the output it’s at the right signal, right, how do you separate the signal from the noise, i really struggle with it.
You mentioned that you have to focus on process so i’m -- you know, Dhoni is probably one of the best captains of the indian cricket team, he’s a process guy. i really believe that you focus on the process and the inputs and the output takes care of itself. But there are markers, so if you look at the VC investing flywheel let’s say it does start with thesis, point of view, trends, then it is about networking, then it is about evaluation, then it is about actually investing and getting into a good company and then you watch the progress of the company and are you able to help.
i think at each stage there are markers, you’re doing B2B for example, you’ve made an investment in agri, what is the trend in agri, there is farm laws, there is agri exports, are we ahead of those trends, that’s a marker. if stuff is happening around you where you feel that. that means you’re potentially behind. i’m saying you meaning the person. So networking, i know even in the last year a lot of times you are telling us about what is happening in your sector externally, that’s a marker. if you didn’t know that’s a problem, right, so you do get some markers but the ultimate validation will obviously come with value creation and exit, the other markers.
Tell me i know that in the last year there are moments where you’ve been very excited and i don’t think that is driven by me saying anything positive which i don’t normally do or Sudipto saying -- what are those moments that excite you?
Nitisha:
Like for the simplest of it like maybe a thesis discussion like the Monday catchups we have and i’m presenting my point of view after doing like three weeks of work and when there is like a good Q&A against it and like i’m able to defend my point that this is what i thought it was and this is what i’ve been tracking and hence this is the area we want to invest. And i get like one approval, not just approval, i mean like one buy in.
Avnish:
it’s the quality of discussion.
Nitisha:
Exactly. The quality of discussion gives me a high.
Avnish:
Or a differentiated point of view the fact that somebody is sitting there and people are sitting there and saying hm-mm i didn’t know this, let me discuss or debate with you.
Nitisha:
Yeah. But, Avi, to that point is it okay -- so for the first 7-8 months there were two, three pieces that i worked on and the point of views were also like they were pretty fertile and we had like good discussions around it. But then somehow we couldn’t spot companies around those thesis and there was no investment in that particular area. is it okay for the person to be a little frustrated that we’ve done so much work but then where is the investment? Because ultimately is that something that gives you a high.
Avnish:
it’s always okay if you want to be frustrated, that’s your problem. So let me tell you the framework, the framework is and it’s not coined by us it’s the concept of a prepared mind and i think Accel, maybe Jim Breyer has coined it. So what you’re doing with all those thesis is you’re preparing your mind. Next time a deal comes and you know right now it’s a very hot market.
Nitisha:
Yeah.
Avnish:
if you have a prepared mind today every time you have to move very fast, our competitors are moving this, that. if you have a prepared mind you’ll make a better decision on that investment.
Nitisha:
That i agree.
Avnish:
That’s when you’ll get the validation. is it natural to be frustrated, absolutely. And is it okay to be frustrated, yes, because the reality is all of us are achievers, we’re all used to getting results and this and that. So it’s normal, it takes some time to realize. Once you do a few deals in focus sectors it takes some time to realize that oh, wow, i had a prepared mind on this and so we could move so fast. Therefore and the other thing i would say is don’t just wait for validation in your own sectors in your own beats.
Around you you will see that i just saw Sarthak walk in and out. We had a thesis on checkout, we met a few companies in that space, we didn’t like them but we had a prepared mind. We saw Gokwik, we were the first ones to --
Nitisha:
We immediately -- yeah.
Avnish:
So you can see that the process works and so my only advice and input to others is don’t just wait for results for yourself you can see it working around and then you trust that it will happen at some point.
Nitisha:
Got it. That’s a very fair point.
Avnish:
But coming back to validation so you said the thesis stuff excited you when you had a good discussion, there’s something else which was externally which i know that that validation meant a lot to you.
Nitisha:
Of course. i mean when there was so much of pull, right, like when people were reaching out to me that, hey, --
Avnish:
Who’s people?
Nitisha:
The founders. i mean that’s the ultimate level of happiness that i can get, right, like founders are reaching out and they’re like heard that you’re working on this so like what have you learnt from this particular thing, anything that can be helpful for us. And then there’s like a continuous catchup that keeps on happening every two weeks and i think that there’s so much value that i can add to them.
Avnish:
And by the way on a separate note which i know was somewhere in the questions i actually believe we’re living in a very special time. if 20 years ago when you were 5-6 years old, if 20 years ago or 30 years ago somebody said that, hey, i’m going to give you an opportunity where you will interact with Mr. Birla, Mr. Tata, Mr. Ambani, Mr. Mahindra so on and so forth, the industrialists of the time. And you will be interacting with them, you’ll be chatting with them, you’ll be doing all of this stuff you would slay to get that job. So this is that job, this is that role where these people that you’re talking were reaching out to you these are the digital industrialists.
People in our portfolio and outside whether it’s a Bavish, Ashish, Jithen, i mean Dipender, there’s so many of them. Ten years from now we will look back and we will say we were there when these people were building the country digitally. We’re lucky and privileged that and therefore that’s the validation that matters to me. When these founders, these kind of -- so at every level the ultimate validation is we’re in a very special privileged situation where we’re working alongside people who are building the nation digitally.
Also look at how it’s transforming our daily lives. Zomato, Swiggy, Ola, Ola Electric hopefully, Country Delight, you know, these are becoming things that we’re starting to consume. And by the way in B2B what that B2B investment the agri investment after farm laws it’s changing the country, it’s providing market access. So i think it’s just a massive privilege and we’re all very lucky and the next decade and decade and a half is going to transform the country and we’ll be able to say that we were there when it was happening.
Nitisha:
That’s completely true, Avi, and thank you so much. Actually that point made a lot of sense, right, that your validation should not be just restricted to the mark ups and the material facts, right, there’s just so much more to it which gives you that aha moment and actually now that i recall there were a lot. So i completely agree with that. On the same point of innovations, right, there’s this other thing also which i feel that of course the role is very unstructured. So how much time do you spend on like meeting founders versus working for portfolio companies versus meeting the right notes?
Because you may end up working like 20 hours a day and you may get like nothing out of it and sometimes just like a very random meeting say with like an old school friend of yours might just get the portfolio the crucial hire that they were looking for. So there’s just so much luck, for a better word.
Avnish:
Serendipity.
Nitisha:
Probably serendipity, right, there’s just so much of it. So how do you manage your time, i mean like for people who just get into the system that’s just so lost, where do we find time.
Avnish:
Yeah. So i’m going to make two, three points there. it is very easy in this business to confuse activity with productivity. You know, there is that rocking horse which is and people there’s a saying which says motion is not progress. You keep moving up and down but you’re in the same place. it is very easy in this business to fall into that trap, okay. GV of Sequoia actually had put out a blog post that i really liked and i agree with that concept which is about i believe that you create serendipity, i believe that you create luck.
The question is how do you and i think i forget exactly how he had put it but it was something about you have to increase the surface area. Ultimately you have to catch luck but you have to be kind of increasing that surface area to catch it and increasing that so the way i think about it is be very careful about not being busy all the time. You should be thinking about am i increasing my surface area.
So i’ll give you an example. Let’s say you go to Delhi, let’s say a year from now you have five portfolio companies, you go to Delhi, you meet those portfolio company founders you come back. You’ve been very busy, you haven’t increased your surface area. You’ve met people you already know. increasing surface area is putting yourself in new situations, meeting new people, reading about new things. So i really like this concept and i think that’s where serendipity comes.
So i would say what is that filter to keep in mind it is borrowing from GV’s framework are you increasing your surface area or are you just doing the same thing repeatedly. And i think that’s where the balance comes, as a firm we’re trying to evolve to respecting that. Because often people get measured on hustle.
Nitisha:
company. Yeah. Which is such a wrong word. i think people think of it that way, it’s not even the actual truth.
Avnish:
But i can see the market is evolving, when the market was shallow you had to just hunt in all places. When the market is deepening there’s so much coming your way you have to pause and focus on what is your edge, do you understand the sector, do you understand the founder, do you have a good network to evaluate. So i think we’re also learning and heading in that direction.
Nitisha:
i completely agree and i think that’s going to be my motto for the next bunch of months to increase the surface area. From this, Avi, i think another point and this is i think the most real inhibition that i’ve faced which is around founder evaluation. And us being like founder first and like everything is around the founder eval so would love to get your views on that. Say there’s a founder that i’m meeting, right, and he’s like spent 10,000 hours on this space, super deep in terms of his experience and knowledge of the domain. So i could like generally people could end up into either of the two buckets.
One could be like this guy is so smart and i probably do not understand this market well enough and there could be like an imposter syndrome wherein i’m too anxious about whatever i’m going to say or whatever i’m going to ask and i may end up in a bucket where i just don’t know what to do about it. Or the other one could be like because of my early bias or whatever my whatever companies i met earlier i’ll probably just overlook whatever are the key factors and that way result in a pass of a company which probably was a huge opportunity.
So how do you tread between these two things in a very balanced way because ultimately so how do you make that decision or the judgment call and I know that we have like a proper playbook wherein for the first couple of months we were just trained on like how do you get your founder eval right. But it is just way too complicated.
Avnish:
So when you figure it out please tell me. This business is not a science.
Nitisha:
It’s an art.
Avnish:
Well, it’s somewhere between but we like to call it art but there is some science to it.
Nitisha:
But, Avi, I was just saying that sometimes it also, you know, it’s a factor of your mood also. What I mean is say you had a good thesis discussion in the morning, right, to give an example, wherein what you thought got a buy in. In your head you’re like okay you have been able to spot the right thing, everything is going right. And that might just sync into the meeting also.
Avnish:
So I wasn’t planning to say this but actually maybe we should talk about that. See, I have a mental model concept that there are three areas to the brain. There’s the lower brain, there’s the middle brain and there’s a higher brain. Lower brain is technically by the way if you do neuroscience it’s called Amygdala, that’s where our emotion, fight or flight, emotional reaction it comes. Frontal cortex middle brain, planning, action, execution. Higher brain, judgment, thinking.
Often why do people say I slept over it, why because your higher brain kicked in. Meditation, music, exercise, all of these are tools, Vipasana, to unlock the higher brain.
When you did a good thesis in the morning and you’ve met a founder and you suddenly felt oh, I get it, your higher brain was at work. This business, a lot of the tools we talk about, thesis karo, network karo etc it’s about getting the best part of your brain to work. If all of us could do it all the time we would all be geniuses, it’s very, very hard. So I don’t have an answer to your question, I still struggle with it.
But I will tell you that -- I’ll tell you what Paul Ferri who was the founder of Matrix when I was starting Matrix for India I asked him what advice do you have for me. He said your problem is you’re too smart. And you will think that you’re right and you’ll try to be the smartest person. It was the best advice I could get because he was absolutely right. He said you will try to be the smartest person in the room. Your job is to find the smartest person in the room and invest in them, not be the smartest person in the room.
That’s our job, so our job is not to -- they have 10,000 hours, our job is to get that 50, 60, 70 percent of knowledge where we’re smart enough to ask the right questions that we can spot that genius. We don’t have to be the genius, that’s where the gap is sometimes. When we do thesis it is not to form a view ki kya hoga we can’t make that future happen. It is to be able to ask the right questions so that that person, suddenly we realize oh, wow, this person gets it. So I think that’s mota, moti, the answer. When we’re not able to do it is when we don’t know what questions to ask.
And I’ll give you one probably the best point I heard, this is from Oprah Winfrey, where and by the way I don’t know if you guys caught the royals like a year ago there was this big expose, which show was it on? Oprah’s show. So the people asked her why is it that people come on your show and they say things that they’ve never said ever in their lives. Do you pay them, is it all setup and by the way it’s not setup.
Nitisha:
It’s the right questions.
Avnish:
So she said I do two things. One, I make them feel very comfortable, two, I ask them the questions that nobody else asked. You know what that is, follow-up question. What happens is I have a script here, actually, I’ve not followed it. You have not followed it because we’re following the train of thought. What happens is smart people we’re all type As, we’re all alpha, we go in yeh poochenge etc, you have to get into that person’s brain not show them your brain.
Nitisha:
Yeah.
Avnish:
That’s the difference. So I think the best people are and which is where curiosity and open mindedness comes in. They’re so good with saying let me figure out this person’s train of thought, let me not project my train of thought. But you need a starting point, you gave me this great list, it was a starting point. This was a kind of a thesis but at least after that everything flowed. So you need that starting point. Then I think if you do it well, if you ask the right questions you’ll get 80 percent of them figured out. But there is an art to it, we’ll still get it wrong.
Nitisha:
No, that I completely agree. Like unless you have the right questions to ask the founder how do you get the right answers. I completely agree. But following the same train of thoughts, right, like I think we talked about what does it take for an analyst to get into a VC then what are the success factors. Now I think everyone is pretty curious to know because in everyone’s head there are just some traditional parts that a person can take exit to from VC. But from your experience of the past batch of analysts at Matrix I believe and I’ve heard that they’re doing bunch of amazing things in very, very different areas. So how do you think of the different exit options and like --
Avnish:
I think it’s a great question, Nitisha, and sometimes whether it is friends’ kids who are asking me for advice so first of all it’s very hard to break into VC so let me not -- you know, you know the criteria and you know that they will come to female in VC question. You’re here on absolute excellence and your track record of achievement and not based on any that we’re trying to hire women or anything like that. So it’s hard to break in but if you break in sometimes I get asked that where do I go from here. You can go anywhere from here.
So what have we seen in the past I know you want to do an MBA so we have seen people go all the way to Harvard. You pick the HSW we have seen them go there. We’ve had analysts start companies and we’ve invested in that. We’ve had analysts get promoted and they’re here. We’ve had analysts go, I was just told that one of our analysts has made 25-30 crores by joining a company that -- actually he joined Zomato.
Nitisha:
Cool. Yeah.
Avnish:
So there you go. So I just think it is the most wide landscape of opportunities that comes. So I think if you can break in this is a --
Nitisha:
You can break out to anywhere.
Avnish:
You can do whatever you want and it is again going back to what it takes to succeed it gives you such a wide angled view of the world that I think it sets you up really well for whatever you want to do.
Nitisha:
I think that’s very fair and I think post this people should not really have those apprehensions that once you’re in VC you can only go for a startup or like where else would you land up. It’s just the world’s open and you can --
Avnish:
And also think about the fact that if we’re saying its digital nation building I don’t know if you’ve discussed in this one but we also talk about the fact that trillion and a half, two trillion of market cap is getting created which is about 60-70 percent of India’s GDP today. You’re getting trained in that piece of the economy you should be able to do anything you want.
Nitisha:
Fair enough. From this, Avi, I think to the point that we have briefly touched upon in our conversation but like would love to discuss it in detail and we’ve spoken about it earlier
Avnish:
Oh, no, this is the female VC.
Nitisha:
Yeah. Let’s hit it out and do it.
Avnish:
I’ve been warned to be politically correct on this but you know that I never am.
Nitisha:
There are going to be all the honest answers I’ll make sure that there are all the honest answers. So, Avi, I think everyone knows, right, in the VC ecosystem probably female representation on an overall basis is not more than 5 percent and if I have to talk about like senior people it’s literally I can name them right now. It’s very handful, less than 1 percent. I cannot blame it on the input pool at least like the colleges that you’re picking from or even the consulting or whatever, everywhere the ratio is improving.
Do you think that that is also translating into the VC world as of now, if not then why, why the numbers are so poor?
Avnish:
So, Nitisha, you and I discussed this in Bangalore the other day and I told you I have a daughter who is hopefully going to be as driven and achievement oriented as you girls are. And to me I think of it a little bit differently which is you don’t want to be at Matrix because we were trying to hire women, you want to be at Matrix because we were trying to hire the best for the role and you made that cut. I’ll tell you where we changed our thought process, because 4-5 years ago we didn’t use to hire from non IIT, IIMs.
Then I remember having a discussion internally saying why aren’t we seeing female candidates. But with the filters we were using like five filters.
Nitisha:
The IIT filter cuts it.
Avnish:
Not just IIT but females IIT mein bhi hai then it was coming down. But then within that you want the topper, right. So the minute we widened the pool today there are 3 or 4, they’re all junior admittedly. So I think it is but and you know this is a politically incorrect part that I’m going to say, we’re not looking to hire women, we’re looking to hire the best investors. And you and I discussed this, you don’t want a quota system.
Nitisha:
Not at all, that’s the worst line when somebody reaches out we need a woman hire. You better not hire.
Avnish:
Yeah. But I’m glad that there’s Vani, there’s Sakshi, there’s Harsha, so there are -- people have done maybe a better job than us but it’s not for lack of trying I will tell you that at our end.
We want -- and by the way I think those firms have also hired basis excellence. Now I actually believe at entry just look at the pool. The reality is even in the founders it’s a very small pool.
We’re looking -- I’ve asked you tell me how we should do better, and we will come to the second part of it which is once you’ve hired, once you’re in a VC do things need to be different, I believe so.
But at entry I don’t think the person entering should want things to be different because then you know that you will come in thinking this is not purely on excellence and your peers will also have that.
Nitisha:
And that’s the worst.
Avnish:
Now when I said we’re not looking to hire women we discussed super forecasting earlier. I believe diversity of backgrounds, diversity of context, diversity of opinions makes for better winning teams. And therefore women, non engineering graduates, CAs all this adds to the diversity. So it is a very, very important objective. Like I said it’s actually a mandate to -- so what we did change was, you know, that we’re looking in the wrong places and we started looking in different places and now we have more and more people coming.
To your point about seniority why are people not senior some of it is vintage. If you were here five years ago you would have become more senior. It is also the pool, look at the founding companies, how many female founders. But like I said I have a daughter I want her to succeed so I’m very clear more has to happen but in my view its on the second part of it which is once you’re here and we were discussing it that day. Should there be a different approach to helping female VCs versus male VCs, yes.
Because the reality is a male by definition has thousands of role models that they can go to, they’re not facing some of the issues you and I discussed. Late night drinking party in Delhi, is that the approach to networking, should there be a different approach to networking. Absolutely you should not feel compelled to do that and there should be a different. But I don’t know that answer, so there has to be -- so I think that’s where we have to do a better job, industry has to do a better job, the ecosystem has to do a better job.
But I think what all women listening to this should know is that absolute commitment to this because we think that it makes for better decisions and for winning. And we think that excellence, absolute excellence exists. If we have to do and you said we will solicit input also I would love to know how we should do things differently and look in other places. But I think we’re both in agreement that quota system should not be there.
Nitisha:
Avi, I completely agree that quota system is the worst. I mean just calling it out is like you know, it’s just the worst that anyone can ever do to a female applicant. But on the point of even lesser representation on senior levels given we know that it’s literally like how we call for companies, right, there’s a category creation. So on a senior board with the women coming there’s going to be a category creation. Do you think that a direct hire there probably would help that person to be able to form the policies because she will be on the board right and hence able to nourish the junior female VCs better and create like a way for them to be able to really do better.
Avnish:
I think I don’t know the answer, Nitisha. I’ll tell you that it’s been debated and the worry is so when you’re deviating from something from a formula, when you’re taking risk our, at least my thought process is do things in a fashion that set people up for success. If for example we were to do this lateral and they come into and first of all coming as a female in a industry which doesn’t have females into a new industry which they have to learn from scratch.
Nitisha:
And that too in a senior position. It’s hard
Avnish:
That too in a senior position, I just feel its too much risk and then I wonder if that doesn’t work out well then where does it go. Do we get so burnt that we won’t do it again. So I see your point, I don’t have a good answer but I’ll tell you that that’s where the thought process is versus grooming younger people and where I agree with you is if you need better ways of grooming younger female VCs.
Nitisha:
You need to have a senior.
Avnish:
No. Then we need to learn how to do it. You need mentors, you need a female who can relate to you and say that I understand these issues and let me and maybe you feel awkward about surfacing them internally and I’ll figure it out. That we have to figure out but for that a lateral hire is the right answer I’m not so sure. Because if we get that wrong I think it’ll set us back in this goal.
Nitisha:
I completely agree, that methods can be different. Any particular VC or like any investing organization that you think has done a good job at it globally or in India?
Avnish:
Globally there’s a lot. There’s I forget the name but lately there are actually female run VC funds in the last like two years that have been setup. See, I think there are a bunch of them but see remember again look at the percentage of female founders in the US also, it’s bigger. So it’s coming, you know, I was talking to Rupali earlier saying what is your point of view and she’s like at home females run the house which I agree. They run the budget, they I think will be better investors.
I don’t disagree with that point of view.
Nitisha:
Yeah, that’s true.
Avnish:
So I don’t disagree with that. She said we will lose lesser money than you guys whatever. So I can see that point of view and the point is understood and the push is appreciated but the answers are not clear. We’re working our way through it.
Nitisha:
No, I agree. At least it’s amazing to see the VC funds in India are actively when they’re looking for senior positions they’re trying to as we were saying broaden the canvas, right, maybe let couple of filters go so as to make sure that at least the sample size is bigger and then you make decisions based on merit. Of course it has to be merit but I completely agree. So that, Avi, that brings us to the last section of
Avnish:
Which I have no clue, what that section is.
Nitisha:
So we wanted to make sure that given this is like the journey of a junior VC so we wanted to keep it like fun and full of fire. So we’re going to do a rapid fire with you today. And the request is to make the answers quick and not how generally VCs do after a long of think you hire somebody.
Avnish:
I suck at this because -- anyway I’ll try.
Nitisha:
The questions honestly have been framed in a way so that people, the younger audience, they can just learn from your experience. So actually you answered this in part but would love to know even beyond that particular name that you took. So the books that every young investor or a beginner into investing world should be.
Avnish:
So Super Forecasting we discussed which is very, very tactical, Intelligent Investor which is impossible to read as a book. But you have to skim through it because it gives you the fundamentals of investing. I believe like I’ve said before that everything comes down to this mental model and in the mental model there’s a book called Mind Hacking, there’s a book called Positivity, there’s a book called believe it or not, it’s called the Thriving Child. And the Thriving Child basically talks about how the brain develops and you realize that the children have the best simple brain which was always higher brain and we then along the way screw it up.
So all these things about the mental models, to me investing is a judgment business. Judgment comes from unlocking the best part of your brain. Anything you can do and read to unlock that is what will make you a better investor.
Nitisha:
I agree. What would you tell your 25 year old self to do something differently or probably adopt any trait or let go any trait?
Avnish:
Be less intense which I don’t think -- I’ll still. So I have I would say in the last 5-10 years done what I should have done earlier. Because I have just always run too hard and not enjoyed the moment. Like I never enjoy an achievement, I just enjoy the chase. And that is not a good way to live.
Nitisha:
And that has changed in the last 10 years, is it?
Avnish:
I’m trying to.
Nitisha:
Hard to believe.
Avnish:
Thank you. I thought I’ve evolved but clearly not. And Salonie is also laughing over there.
Nitisha:
You seem to (47:51 Inaudible) One habit that you adopted as an investor that totally changed the game.
Avnish:
Meditation. Now I do meditation in a different way but again it is back to higher brain unlocking. I have a I think almost every work day there is a routine I follow which is a 1 to 1.5 hour routine which includes exercise, prayer, meditation, gratitude, at the end of which my day is crystal clear to me, what do I need to do, what are the thoughts behind that. So it has just been a unlock of a different level.
Nitisha:
I remember we talked about it, like for some people it’s the exercise and the rigor of it, for some people it’s just literally doing nothing and just walking around not observing anything. So that’s a beautiful -- I’m trying to get it into my routine as well but hopefully some day. One thing that you love and one thing that you hate about VC?
Avnish:
I love the, you know, the digital nation building, the founder -- I mean we spoke about all of this. I would pay to do this, don’t tell my investors that, I’ll want to get paid. But I would pay to do this job. I mean how many times in life -- I think it is a privilege or you’re extremely lucky in life if you can say that I’m doing my life’s work. Because then you’re not chasing anything else. So that’s what I love about VC.
What do I -- I guess very little I hate about it because otherwise I -- see, also and this is a little bit of a separate thought around Matrix. If we hate something we should change it, we should not say I hate this. Change it, change it in your life, you’re in charge. Now what do I hate, it has taken too long to get results all of that but it’s all changing.
Nitisha:
I was warned that you’re going to dodge this question and that’s how it’s been played out.
Avnish:
No, I believe that.
Nitisha:
So one thing that you hated and you changed.
Avnish:
Okay, so one other thought I’m going to leave people with because it’s one of the themes of our offsite it’s called founders mindset as you can see I’m very passionate about. So founders, how do you think founders think differently from others? How are founders different from a manager, or an employee.
Nitisha:
They just want to do something to solve whatever they’re seeing, the mind does not stop.
Avnish:
Very well put. So the framework I apply is a manager and employee they will say, okay, give me a goal, give me resources, I’ll do my best to achieve it. A founder will say I have a goal, I will generate the resources to achieve it. That’s the mindset we should all have in life, my view. And therefore you can’t hate something, change it, because then you’re externalizing, right. You think I’m dodging but that’s what I believe.
Nitisha:
Basically you’re a VC with a founder mindset and hence you cannot hate anything.
Avnish:
Well, okay. If that’s how you put it. But I really believe that it’s liberating when you start thinking like that. It’s owner’s mindset whatever, right. Stop whining, stop complaining. What did Mahatma Gandhi say, be the change that you want to see in the world.
Nitisha:
Be the change that you want to see in the world. No, I completely agree. I won’t even like say that you dodged but actually this was a very good answer. So what would you advice if your child tells you that he wants to get into the VC business.
Avnish:
My children think this is the worst job. They say you work the hardest and everybody else makes money. What would I advice is the same thing -- so there is another podcast which is around this passion, skill set, opportunity which is -- there’s a book called Ikigai which by the way is the other book people should read. Which is about why Japanese people live so long and one of the core parts of that is that they are in that Ikigai, what is the Ikigai, it is the center of their skill set, their passion, their opportunity and some meaning and impact in life.
That’s not what I would tell my children that’s what I tell them that you have to find your Ikigai. If your Ikigai happens to be VC that’s great but do it for the right reasons. Why are you passionate about it, do you have the skill set for it, are you finding meaning in it? And I think in life if we find -- which is why I said I feel grateful and privileged that I feel like I’m doing my life’s work because I believe it’s my Ikigai.
Nitisha:
Did you find Ikigai and VC before you started this or did that happen couple of years into this?
Avnish:
No, it’s a great question and Sudipto also covered this yesterday. So a lot of decisions in my life have not been thought through, this was thought through. So after we sold Baazi we made some money, could have become an entrepreneur. Technically speaking could have retired not that the money was that much but it was beyond the needs, right, money is the gap between your needs and your means. So I actually didn’t know the concept of Ikigai but I did come up with it which is the passion, skill set, opportunity framework which is what is my passion, do I have the skill set, is there an opportunity.
And really the debate became between becoming an entrepreneur again and versus being an investor. And the reason I picked this was because it was much more horizontal, got to interact with very smart people in different fields. So it keeps you intellectually very sharp.
Nitisha:
[0:53:39] [Inaudible] got it. And, Avi, this is the last question actually and this has been crowd sourced from a lot of people in the other funds and I think they’re dying to hear this answer.
Avnish:
More pressure but okay.
Nitisha:
So the question is that -- and I was asked to particularly ask this to you that what do people need to do to get invited to Matrix poker parties?
Avnish:
Lose money to us. You will get a lot of invites, right now we lose money. No, but that is excellent, we would love to encourage more participation, it is a lot of fun. I know you’ve made the effort to very quickly learn and you’ve won money. So you’re not getting invited again. But I think it’s a great point, Nitisha, it is something that binds the ecosystem together.
Nitisha:
Actually people have been trying to befriend like especially folks from Matrix so that whenever --
Avnish:
But therein lies the answer, become friends with the people at Matrix you’ll get invited. We should invite these people who have asked.
Nitisha:
Yeah, yeah, getting it from a lot of people. But this is really great.
Avnish:
Super.
Nitisha:
Thanks, Avnish, thank you so much for taking out time and sharing all the insights with us. And thanks viewers for tuning in.
Avnish:
Thank you, Nitisha. Thank you for doing this. Very free flowing, lovely interacting and hopefully it’s useful for people.
Nitisha:
Of course.
Salonie:
Thanks for tuning in. For more Matrix Moments episodes, you can head to www.matrixpartners.in/blog. You can also follow us on Twitter, LinkedIn, and YouTube for more updates.
