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Founders need to be comfortable with uncomfortable conversations, says Shanti Mohan from LetsVenture

Published On
February 9, 2023
Read Time
Jay Magdani

Starting up requires a lot of time, effort and learning into one particular problem or market one is looking to develop. Indeed it is important for Founders to gain expertise in the field they are starting up, but it is also crucial to know that not everything is known to you.

Addressing the audience virtually at Scalix’s first online interactive AMA, Shanti Mohan, co-founder and CEO at LetsVenture highlights the importance of keeping an open mind as a Founder. It is important to maintain the attitude of learning from your first hires, investors, and customers to help identify the gaps and address them.

Moderated by Jay Magdani, EIR at LetsVenture, the session was attended by early-stage entrepreneurs from the Scalix community. During the session, Shanti spoke about her own entrepreneurial journey and key learnings that helped in making LetsVenture, India's largest early-stage platform for private market investing & fundraising for investors & founders. 

Here are some edited excerpts from the interview: 

Jay: Please tell us about your initial journey as a Founder and what was your eureka moment behind startup up LetsVenture?

Shanti: I founded LetsVenture in 2013 but I had been working on the idea almost a year before that. So I came back from the US and at that point of time in 2012, crowdfunding was becoming a very big phenomenon. I did not realize that I would build a curated marketplace as the idea was actually to build a crowdfunding platform for nonprofits to raise capital. That was the first idea of LetsVenture. Eventually we went down that path and met with a lot of people but I think there was one conversation, which almost changed the entire direction at LetsVenture. I met a friend, he used to be a mentor at the NSRCEL. He said that while the nonprofit idea was great, incubators and accelerators also needed a lot of support in terms of just fundraising and that a lot of founders were struggling with fundraising as well. I found that perspective interesting and started exploring the idea.

When I began diving deeper into the idea, I realized that there was an evident solution waiting to be created. I spoke to about 20 founders, and asked them the top three challenges they are facing. Almost everyone termed the ability to raise capital to be their number one challenge.  When I met investors, I realized that even on the investor side, there was a problem with the discovery of these startups.  That was my 1st Eureka moment of a marketplace for private equity investing.

On building a tech enabled platform for LetsVenture, I remember I was attending an event organized by Microsoft and met a VC who had come down from Delhi. While talking to them about LetsVenture,  he mentioned how an online platform would have allowed him to invest more easily in startups not accessible directly in his physical vicinity.. If the platform allowed them to connect with Founders online, look at their video pitches and then they could plan accordingly. I think in any business sector, if you can find a gap and solve for that efficiency, you will have a good business problem to solve.

Jay: What is your recommendation for the founders in terms of validating the idea of what is that minimum threshold number of people they need to speak with, especially those for whom they are building the platform.

Shanti: One thing I have learned is that sometimes the customer does not know what he wants. Do not assume that the end customer knows everything they want and it may be so that they have a very vague idea about their need. When I went and asked investors and founders if they wanted an online platform, which could connect investors and founders, they were onboard. I believe, how one then builds the product and designs the user experience, eventually changes the adoption of that idea. In my case, I would be out on the roads meeting founders regularly and the network kept on building as one connected me to the other. My recommendation is that you need to define that minimum set of feedback. When you start receiving similar feedback on your idea is when you start exploring solutions. Until then, stay within the problem space. You also need to go with a very open mind in terms of really listening to the customer.

Secondly, I think the ability to listen without trying to influence is very important. In our minds we can turn data the way we want to turn it to. We can ask questions, which lead to the answer we want to hear. This is where one has to be very honest about the questions you are trying to get answered and I call it intellectual honesty. Do not influence because you badly want to hear your answer because you don't want to spend the next two years of your life building something, which actually does not have a use case. However, at the same time, have the ability to discern the messages because at the end, the end customer might not be thinking so much about the problem.

Another important question that I personally asked the Founders was whether they would pay for the idea being built at LV. I believe those are the things which as founders need to keep in mind because one can definitely talk about solving a certain issue, but at what cost, how and the user experience are the key element that make a product successful.

Jay: Challenges are a part of the starting up journey and while some sail through, some lose the battle. What was that one big specific challenge you experienced that could have thwarted LV's success journey and how did you overcome it? 

Shanti:  So I think one of the challenges arises from the fact that we were a category creator because we were trying to change the way people invested in private markets. As I began meeting more people,  I realized that my target audience was not the existing angel investor who had already invested and was already part of a network. We realized that our target audience were actually people who were busy building their own company, were bullish about digital services and wanted to opt for such an online platform at that time back in 2013-14. 

While my idea was to ensure a global asset class where founders were not restricted by geographical boundaries and could reach investors from different states and countries even, many people at that time were not able to understand the same. That’s when we started doing a lot of offline angel investment workshops to democratize knowledge. 

Also another challenge we faced as LV was in 2017 after the 2016 slowdown as the business wasn’t doing very well at that time. We had hired a lot of people but our cash flow had taken a hit. That was a tough time as we had to scale down our operations which meant parting ways with some employees.

We generally tend to avoid such conversations but I believe that as a founder, it is extremely important to be comfortable with uncomfortable conversations and zones. There is a need to embrace the attitude that as founders, we might not know everything but we will learn from others, our hires.  It is important to be able to see five years ahead while building a business because you do not want to go downhill with your business.

Jay: Speaking about raising capital , how can a founder decide the right time and amount of funding that needs to be raised for their business? How is that decision made?

Shanti: So there is no right time as such to say. But I would say there are two times you can raise capital and one time you absolutely should not. If you are a storyteller and can articulate your idea, go raise at the ideation stage. You  will find your early believers, people who invest in your  ideas. Find such investors but go at least six months before your beta launch. 

The other time to raise is after you find traction. About 4-6 months after your launch. This raise will be purely based on business fundamentals.

Do not try and raise capital if you are <6 months to your launch. If you go fundraising close to your launch, then inevitably everyone will wait until it is out in the market. 

At LetsVenture, we did our first deal in January 2014 and then went on to raise our first round in June 2014. So I could showcase our data metrics from our first deal.

Jay: Hiring at the executive level has also been one of the challenges faced by early stage founders. How does one handle the hiring at these early stages and what things they should keep in mind while looking for a Co-founder, CTO, or anyone at the leadership stage?

Shanti: Personally, I do not hire people who are looking for jobs, in the senior leadership teams. My entire senior leadership hiring has been people who have either been referred to me Or whom I know have been checking on them as I want to bring them onboard when we are ready for them as an organization. One needs to be really careful while hiring for a senior role because you will be pulling them out from some sort of steady environment.

So there is a responsibility as a founder that you don't put them into an unstable environment and when I say unstable, I mean when you know that you are running out of money in the bank, or you know that your idea is not getting validated deep down somewhere. Do not try to play with other people’s career at that point in time. 

When somebody comes on-board you should actually get commitment for the next five years, which is the timeline you need to build a good leadership and organization. Also you always need to get people who are way better than you, who can challenge your hypothesis, and question you. Either you need to convince them or get convinced by them. 

Retaining people is also as crucial as hiring. So the practise I follow is that I share the pitch deck, company’s finances and future plans and the vision for the next year. 

Jay: Is there a specific formula for how much equity can you give away early in terms of percentage, especially in the first year

Shanti: One practice that I had in place earlier on was that I asked people to take a salary cut and you take a salary cut, because you are coming here to build equity value. What I do is that I take the difference of the salary cut, multiply it by 2 or 3 and give that much equity. I believe that it might be good to be a little generous in the early stage with equity because there are many small sacrifices everyone makes in that stage. So when your equity grows, you along with those who believe you grow. So that they do not look back and regret their decision of joining you. 

Jay: What are your views on the current investment landscape change and how do see it changing in the future

Shanti: I believe that the opportunity is amazing and it is the right time to be a Founder. Right now, the global markets are recognising India as the hub of innovation and unique ideas. One thing I tell the investors is that it is going to be a loss if they do not invest in India now as we are at the cusp of innovation, value and wealth creation. 

If you look at the last decade, the first generation of Unicorns were being created and this decade the next generation of entrepreneurs are people who have worked in those unicorns and already know the challenges and opportunities in India. Thus they have been able to accelerate their own startup journey owing to their learnings.

I am very bullish and the startup community has now become a lot more stronger and generous. Knowledge, understanding of the market is a lot better today so I believe that we would see more capital come in not only from India but also from international investors. 

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