Back your winners
7. Reservers are essentially, a part of the fund which is kept purely to bet on winners - to get the most out of them.
With only a few startups that strike out - becomes paramount that you bet on the ones that are taking off
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@BlumeVentures
/
@BKartRed
latest report on Blume's Venture fund performance is a gold mine of insights into the Indian VC - Startup ecosystem and how Venture Capital firms operate.
Here are 7 things I learned from this 🧵
The Omega Files (Inaugural edition)
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It has taken over a dozen years to get here. I was hoping it would be done by year 10. And we still have a few years before the Final Chapters of the Blume Fund I journey are entirely closed.
The First Edition of The Omega…
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Highly recommend that you enjoy the full report -
Though I work at Blume so might be biased, however, this report gives you a very good sense of how the Indian startup system has evolved, what works, what doesn't from the lens of largest homegrown fund
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How do you raise your first fund?
1. After pitching to 600 HNI's ( Not institutions), got a commitment from 80 people where 100% of the capital was Indian
India in 2011 was unproven VC Market + Karthik and Sanjay, first-time managers - More like a seed round story
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Aggregate Performance
2. Projected to close at 6x gross where the deployment was in a 3-year trench
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Failures happen early, Exits happen last
3. The majority of the fund 1 return has come about in the last 3 years, while the deployment started 12 years back
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Series A is where most startups die
4. 40% of our fund 1 companies moved to series A, with a 2 years waiting period
IMO this primarily happens as series A or early Series B is a clear sign that startup has hit PMF, before that all of them are trying to find it.
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Where do deals come from
5. 99% of our startups came via referral or a network
Referrals, referrals and more referrals - separates out signal from noise
Now a lot more traction-based sourcing also happens - ex Github repo adoption, app analytics tracker etc
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Power law is the foundation of Venture Capital
6. 6% Startups return 20x
9% - 10x
50% - 0
Which is why you hear things like fund returner, not large enough problem - every startup that a VC backs had to potentially be able to return the fund
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The whole report has a lot more insights into which geography got the most exits, the journey of the fund 1 startups, How India quotient fund 1 performed and much more.
Major props to
@AdithyaS017
for bringing it all together :)
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