1Mby1M Virtual Accelerator Investor Forum: With Mohit Gulati of ITI Growth Ventures (Part 1)

Responding to a popular request, we are now sharing transcripts of our investor podcast interviews in this new series. The following interview with Mohit Gulati was recorded in December 2017. 

Mohit Gulati, Founder and CIO of Altius Ventures, which recently changed their name to ITI Growth Ventures, discusses the Indian startup eco-system.

Sramana Mitra: Tell us your about investing focus. How big is the fund? What size investments are you making? Let’s get you introduced to our audience.

Mohit Gulati: ITI Growth Ventures is the investment trust of India growth ventures. We’re now going to be an offshoot of the Sun pharma family, which is one of the largest Pharma-focused companies in India.

We’ll be targeting a fund size of $25 million of which we already have $15 million in commitments. This is mostly from institutions based in India as well as US.

Sramana Mitra: What type investments are you looking to make?

Mohit Gulati: We are very focused on the early stage space. I love building businesses from the bottom up. That’s what I’ve been doing in my personal capacity over the past four or five years. Ticket size is going to be restricted to $100,000-$500,000 and will be ready to participate selectively in Series A rounds.

Sramana Mitra: When are you willing to put in that first check? What is your assumption? You know one thing that I’m digging into right now is the shift in the seed capital ecosystem in the world. Just in the last few years, there’s been a big concentration of micro-VC funds that are focusing, broadly, on seed.

But seed has now broken down into many different segments – pre-seed, seed, post-seed, pre-series A, small series A. All kinds of different nomenclature have emerged. How do you peg yourself in that continuum of early stage investing?

Mohit Gulati: Today, we’re in this hyper liquid world where every single country is sitting on mountains of liquid cash. A lot of that cash is invested in stock markets, Bitcoin, cryptos, and also in early stage companies. Of course, the definition of seed varies from country to country.

From an India perspective, seed check will typically never exceed $450,000 while the starting check for a seed round in the US, or in the Valley particularly, would not be less than $350,000. When you look at the seed stage investors in India, there’s a bunch of large angel investors who are putting in smaller checks.

You’ve a bunch of angel groups and a lot of us micro-VCs. If you compare us to Silicon Valley, we are micro-VCs, but in India we are a full-grown VC because a typical Indian VC would not make investment sizes of more than $350,000 to $400,000 in the first round.

Sramana Mitra: Yes, true enough.

Mohit Gulati: It’s more subjective with regards to which part of the world you are comparing it with.

Sramana Mitra: But the real question central to the life and experience of our audience of entrepreneurs is, what kind of validation are you looking for before you’re willing to write that first check? Are you looking for customer immersion, some sort of customer validation, revenue, business model validation or pricing model validation? What is the level of risk that you are willing to take?

Mohit Gulati: Since the ecosystem has evolved in the last three to five years, we have come to a stage where there has been some lackluster response with regards to early stage investing. A lot of entrepreneurs have actually put their heads down, which is done a good thing.

These guys are getting it with regards to when are we supposed to raise the money. At least at the idea stage, I don’t think most traditional Indian VCs would have the appetite to cut checks. So most of us are actually looking for some validation towards the idea. It might not be a large revenue line, but at least some revenue and profitability.

Sramana Mitra: So, you are looking for paying customers in other words.

Mohit Gulati: That is true, because we are more focused towards B2B businesses than B2C. The revenue monetizations are slightly better than B2C, because creating a brand in any country today is a herculean task.

This segment is part 1 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Mohit Gulati of ITI Growth Ventures
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