Here's how startup founders can become good funders

  • There are several founder-turned-investors in the Indian startup ecosystem too.
  • Here are the qualities that makes a startup founder a good investor.
There are many like Sachin Bansal and Binny Bansal – who are extending the list of startup founders who are turning investors.

Vijay Shekhar Sharma of Paytm who is still running his company, is also an active angel investor with over 20 investments.

Being a celebrity founder like Sharma and the Bansal founders or even Kunal Shah of Freecharge fame, Kunal Bahl of Snapdeal, Bhavish Aggarwal of Ola, also adds weight to an investor’s journey.

Having been through several rounds of funding while building a startup, a founder-turned-investor can see through the pros and cons of investing in a company.

Manish Singhal who co-founded LetsVenture.com, is now running Pi Ventures – lived the life of an entrepreneur as well as an investor. Being a founder exposes you to issues that a startup faces, he believes.

“You relate to the founder challenges a bit better. If you have built a deep technology product, it also becomes easy to appreciate their technology as well as value addition,” said Singhal.

However, that’s not the only thing that can turn a founder into an investor.

Mukul Arora of SAIF Partners believes that along with the unique perspective of running a business, a founder-turned-investor must bring more to the table.

“That is 20% of what is needed to be an investor, so if founders come in with a mindset that there is an 80% left for which I will have to unlearn and relearn, they can become good investors. Just being a founder is not sufficient, you have to be hardworking and hungry to learn a lot,” said Arora.

He added that while in the US there have been many such examples, the Indian startup ecosystem is not yet mature.

Being a founder, one also tends to have the habit of creating new products. A VC enables products and not creates them. That is an understanding a founder needs to have before turning into a VC, adds Singhal.

“Founders can have strong viewpoints but as an investor it’s also important to have flexibility,” said Singhal.
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