Better Capital: 2018 Fund

This has been an incredible first year for Better Capital, an India-focused microVC that I started in January 2018 structured as an AngelList syndicate. I focus on pre-seed, seed, and pre-series A stages and on India-for-India and India-for-World companies. India is the central thesis — learn more here.

As we wrap up the year & our final investment of 2018, I thought this is an apt time to reflect back on 2018 & share the journey with you.

Personal Checks to MicroVC

After moving from San Francisco to India in the summer of 2012, I spent a year or so in understanding the local startup ecosystem and building a small but high-quality network of founders to kick-off my early stage angel investments.

I invested in approximately 15 companies during 2014–2017 timeframe & was lucky enough to invest early in stellar companies like Rupeek and Testbook among others.

But it was clear that I needed to do more and there was an opportunity to do a lot more. My deal flow was high quality and growing.

The nudge to take the next step came when AngelList launched in India as its Syndicates product offered the most efficient structure for me to go from personal checks to a MicroVC format. It enabled me to double down on my high-quality deal flow with larger checks and continued prorata participation.

What followed was truly unexpected.

In Numbers

Numbers speak volumes. So here’s Better Capital 2018 in numbers:

• #1 AngelList India syndicate with the largest number of raises, most number of prorata raises and most number of over-subscribed rounds showcasing the quality of the deal flow we brought to our LP network
• 62.5% of all investments in 2018 have well known VC funds at co-investors
• 81% India-focused and 19% Global/US-focused companies
• 10% Pre-seed, 58% Seed, 27% Pre-Series A and 5% Series A investments
• 56% B2B and 44% B2C companies
• 25% single founder companies, 43.75% companies with 2 founders, 12.5% companies with 3 founders and 18.75% companies with 4 founders
• 18.75% husband-wife cofounder teams

2018 Portfolio

Seed investing is anything but easy. Without conviction and a strong point of view, you are likely to spray and pray. For me, it has always been a Market-first and Founders-second approach to discovering high-quality deals and building conviction in the founding team. All of my deal flow is proprietary and coming from a super-curated network of founders and investors as well as my personal outreach.

Here’s a snapshot of what is in the Better Capital 2018 portfolio — some names are hidden as these have not been publicly announced yet.

The industry split looks something like this — as expected fintech leads the pack but I expect it to be replaced by something else in 2019. We have also made our first investment in multiple sectors that we will most likely double down and discover more companies in 2019.

Investing early in companies that grow like a weed is the best position however you can never get it right every time. Especially in India, there are several sectors where I’d pass on a pre-seed or seed opportunity to see how the founders execute and get to a certain scale when my conviction gets strong enough to invest. Stage balancing, as I call it, is crucial in early-stage investing when you have a spread from pre-seed to pre-series A. Here’s what our stage balancing act looked like for 2018:

The toughest investments are the pre-seed ones. You need far more conviction to invest well in advance of others. We did 2 such deals this year — one of them being Kutuki and I couldn’t be happier about it. This testimonial from one of their users highlights why Kutuki is an important company and the early product/market fit they’ve achieved already.

A few more notable points I’d like to add are:

• We have 1 portfolio company that went from Pre-seed to Seed to Series A in a matter of 9 months.
• We were instrumental in singlehandedly building the rounds for 4 of the investments this year from scratch.
• When you love the founders but worry they are not there yet — this happened twice this year and I came up with a solution by investing a personal check into these 2 companies which will (hopefully) raise soon and become part of the Better Capital portfolio. One of them just got into the world’s best accelerator too.

It takes a good 3–5 years to truly see the results of pre-seed and seed investments so I will go back to this post in 2023 and explore how these bets fared!

Misses

Three areas that I did deep research on but couldn’t find a team at the right stage to invest in 2018 were clearly e-commerce, consumer brands, and content. I hope to find these in 2019 :-)

Better Founders

We have added 35+ founders to the Better Capital network in 2018 — all highly engaged founders who have expanded the depth of my understanding of their sectors, referred other stellar founders to us and a lot more. I am thankful that they have chosen Better Capital to be on their cap table and hope to fulfill our promise of being the 100X capital.

Better Capital’s founders have benefitted from fast & efficient fundraises, clean cap tables with just 1 entry even when you pool capital from multiple angels, introductions to strategic LPs (experts in their fields) in India and Silicon Valley for advice and Partner-level recommendations to India’s top VCs.

This comment from ShopKirana founder Tanutejas Saraswat probably brings out how I work, more than anything else:

And this.

If you are a mission-oriented founder, I’d love to speak with you. Please connect with me on LinkedIn or request an intro via one of the Better founders.

LP Network

I am proud of the high-quality LP network we’ve built at Better Capital from India, Silicon Valley, London, Singapore & other locations. We have ex-founders, executives at Netflix, Facebook, eBay, Google etc., family offices in India, new generation leaders of large Indian business groups and more.

The best measure of our LP network is in the time they’ve taken to meet with some of our founders for advice and help even before we had finalized our investment and/or they had invested.

I hope to continue to curate and grow the highest quality LP network — and give back to each of our LPs but being the highest quality deal flow for their angel investments.

If you are an angel investor keen on investing in the India thesis & need access to the highest quality deal flow, please apply to join the Better Capital syndicate here.

Looking Forward

We have an interesting set of investments lined up for 2019 and I am looking forward to improving on every front from discovering stellar companies early, carving out allocations in competitive rounds, building strong ecosystem relationships, but most of all becoming even more valuable for our founders and LPs.

Last but not least, I am thankful to AngelList and the AngelList India team for being an important part of this journey.

Happy Holidays!