Introducing First Cheque

By Founders, For Founders

First Cheques are special. Every founder who has received one remembers it for the rest of their lives as the catalyst that sparked their entrepreneurial journey. Which is why, it was befitting that we chose this name for our new initiative - First Cheque.

We are a new seed investment and acceleration program that invests Rs 10–20 Lakhs at the very early stages — when founders are raising between 25 Lakhs –2 Crore from multiple angels. We invest through a network of experienced founders and product builders — our Venture Partners.

These are all folks who can add real value to the company’s journey from Seed to Series A. We believe that great founders are great at spotting other great founders, and if they decide to invest personally in an early team — First Cheque co-invests with them. Here’s a bit more about our group of founder-angels:

• Farooq Adam : Founder, Fynd
• Harpreet Grover : Founded and Exited CoCubes to Aon Hewitt
• Pawan Gupta : Founded and exited Curofy to Round Glass
• Jyothirmayee JT : Founded and exited Hiveminds to Madison World
• Gaurav Bhatnagar : Co-Founder, Travel Boutique Online
• Harsh Mani Tripathi : Founded and exited Pyoopil to UpGrad. CPO@WittyFeed
• Sourabh Sharma : SVP at Digibank, Earlier : Product @ Paytm, Founder- Milaap
• Srikrishnan Ganesan : Founded Hotline which got acquired by Freshworks and rebranded as FreshChat
• Aprameya Radhakrishna: Founder @ Vokal , earlier founded and exited Taxi-For-Sure to Ola.
• Sidu Ponnapa : Member of Board & India MD GO-JEK, Founded and exited C42 Engineering to GO-JEK.
• Upasana Taku : Co-Founder @ Mobikwik
• Gireesh Subramaniam : VP of Product Management, Freshworks

Once we invest, First Cheque then works with the company to help them reach an institutional fund raise.

Why First Cheque ?

Five years back, when I was raising a Rs 2 Cr seed round for my startup, most angel investors were traditional (Dhanda) business folks trying to buy up 20–50% of early startups for that amount (Yes!). Exits & acquisitions were unheard of and startups raising Series A were rarer than Unicorns are today!

A lot has changed since then. Flipkart, Ola, Swiggy, Sharechat, Freshdesk have shown Indian founders that you can build a world class technology company from India in less than 10 years and have attracted a new class of venture capital to India. What happens from here on is what we call Indian Startups 2.0.

What’s different in 2019?

In 2019, we see that Indian Founders are now absolutely fearless — no space is sacrosanct, they have a market unlike any other in the world with 500M mobile internet users (Hat-tip to Mukesh Bhai), the most advanced payments platform in UPI and a generation of founders who have participated in the 2012–2018 boom and are coming back stronger with that experience. With these tailwinds — you would assume that raising capital in India must be a breeze — but unfortunately most of the money that has come in the ecosystem is largely only for growth stage companies!

Today — If you have a product that works, then access to growth capital is not a problem. The problem now is how to get there.

Typical Startup Funding Timeline

Typically founders start off their journey by raising a small round (Rs 20Lakh- 2Cr), that is supposed to get them to a working product and some traction. They usually raise this from Friends,family, ex-colleagues or from successful Founders,Angels, Senior Tech, Product Folks in their network. We see multiple problems in this space that need to be addressed :

1. While it’s encouraging to see more people with startup experience become angel investors, The number of these pre-seed/ seed deals has actually gone down in India after the boom of 2015–16. (Source : The Ken).

2. Many founders who raise a seed round, especially first time founders, are clueless about how to go from there to Series A . What metrics to focus on? How to break down the goal of Series A into smaller goals within Growth, product , Recruiting and marrying all of them to reach the larger goal of Series A. This is the valley of death that few startups cross.

3. There are many angels in the ecosystem but we find a lot of them too are disconnected from the VC investment thesis. Many of their companies will never raise VC money simply because the markets they chose are just too small. We also still see a lot of the “Dhanda” mentality with some angels extracting their pound of flesh from young founders.

How does First Cheque solve this Problem ?

To address these gaps, First Cheque invests with a network of experienced founder angels who have “been there done that”. Here’s how we operate :

1. We work with our network of select venture partners (listed above) and co-invest with them. Our Venture Partners are all successful founders/senior Tech/Product folks — people who can add real value to the company’s journey from Seed to Series A. They bounce their ideas off us and we help them by bringing “VC smarts” to their decision making. If they decide to invest personally in an early team — First Cheque co-invests with them. We are proud that the Venture Partners that we are working with are all current/ex-Founders!
   (Feel free to reach out to any of them (or me) if you are starting up! We would be happy to give you feedback and evaluate if you are fund-raising.)
2. We ❤ founders. Our money comes with no strings attached and we do not ask for any special terms — just the same rights as the other investors in your round. In fact we will call out any predatory terms that might be sneaked in by your lead.
3. We intend to make a 100 such investments over the next three years — which is roughly 30–35 a year.
4. We are building this as a strong community of quality founders, that can act as a strong sounding board and support network for each other sharing common learnings for everyone’s benefit.
5. We are happy to invest very, very early in quality teams. Our typical turn around time is 2 weeks — just send us your deck or even better your MVP and we will wire you the money if are impressed.
6. To support our community of founders, we conduct regular workshops, meet-ups & demo days with product & tech experts and successful founders, so that our founders can learn from the best. Our goal is to help you reach Series A and raise from an institutional VC.
7. First Cheque was originally conceptualised by India Quotient but is now a separate operating company with it’s own brand, LPs, decision process and CEO (yours truly).
8. FirstCheque’s LPs — i.e. India Quotient, a couple of other marquee VCs and & some HNIs will be keeping a keen eye out and meeting with companies from our cohort to explore investing in subsequent financings.

With this announcement post, we are also happy to share the ambitious start-ups that we have already invested in and are proud to support :

First Cheque’s Portfolio!

At First Cheque, we strongly believe that India will give birth to multiple billion dollar businesses over the next decade, and we want to play our part in making their journey slightly easier!

PS: Feel Free to reach out to me at kb [at] firstcheque.vc or @kushalbhagia if you think we can add value to your startup journey! If you want to know more about First Cheque or want to join our group of venture partners or want to share feedback on our model, happy to chat!:)