Startups Exit is one of the paramount issue in the VC community in India and also at the same time often overlooked or misunderstood by many. Fact of the matter is that scale / exit strategy determines the type of investor.

1. © Shailesh Vickram Singh
Exits for Startups : An
investors’ perspective
Shailesh Vickram Singh
twitter : @svickram
blog : fringenotes.in

2. © Shailesh Vickram Singh
(shameless)Self promotion
• 20 years of experience as entrepreneur, venture investor and corporate strategy professional
• Building a fun and incubator in area related to Climate change, Renewables, Agriculture, Food chains,
Water & sanitation
• Executive Director - SeedFund India
• Was MD with a PE fund ($170 mn fund, 2.1x return) for 5 years before moving to venture space
• Exits ~ RedBus (triggered the deal with GoIbibo), 3 IPOs, 5 M&A / Strategic sale
• Co-founder of Zygote Tech in 1999/2000, Successfully scaled up without any external fund infusion
• Guest faculty, mentor and jury member at various IITs / IIMs / FMS etc
• Passionate about Environment / Rural Development / Startups / Technology
• Writer/author on Policy, Economics, Environment, Tech & Startups
• B.Tech (GB pant - Pantnagar) + MBA - (IIM Lucknow), TiE Charter member

3. © Shailesh Vickram Singh
Portfolio
Ah Exits !!! Where are they

4. © Shailesh Vickram Singh
The Startup Haiku
“They created a website with a brief video.
It went viral,
They bought a yacht”
source - Dan Norris
http://wpcurve.com/is-startup-validation-bullshit/

5. © Shailesh Vickram Singh
However as it happens, all these stories always
happen with Neighbor son or with Some US startup.
In immediate world, the exits loos like

6. © Shailesh Vickram Singh
Obvious & simple path to exit

7. © Shailesh Vickram Singh
Why Exits matter that
much ?
Profitable business 30 Cr revenue
Buy back by
founders?
3x return is
wastage of money
100x / 50x

8. © Shailesh Vickram Singh
The moron VC

9. © Shailesh Vickram Singh
The VC Math
• 2: 20 model
• 8 Year Fund life + 2 years ( on Average)
• Fund deployed (88% or less, rest fee)
• Need to earn a minimum 3x (pass grade
return)

10. © Shailesh Vickram Singh
Life cycle of a company
100x
3x

11. © Shailesh Vickram Singh
What does this
mean for you?

12. © Shailesh Vickram Singh
The exit
Quantum matters and that
determines nature of exit and that
determines type of business

13. © Shailesh Vickram Singh
means …
Following doesn’t matter :
•Just another business
•Profitable business
•Super niche business
•Highly profitable but tiny niche business
or
•Buy back by founders

14. © Shailesh Vickram Singh
Hence …
When you think of starting up
•Think of exits and not anything else, as exit
scenarios determines the nature of investor
as well as behavior of investor

15. © Shailesh Vickram Singh
Creating focus on exit
When you think of starting up
•Think of exits and not anything else, as exit
scenarios determines the nature of investor
as well as behavior of investor

16. © Shailesh Vickram Singh
So what creates great exit? (in theory)
• Trust / Chemistry between Fund & founder
• Value creation by investors
• Great corporate governance
• Solid management team

17. © Shailesh Vickram Singh
However as it happens, the
reality is a bit different

18. © Shailesh Vickram Singh
Trust / Chemistry between founder & fund

19. © Shailesh Vickram Singh
Value creation by investors

20. © Shailesh Vickram Singh
Great corporate governance

21. © Shailesh Vickram Singh
Rock on CEO

22. © Shailesh Vickram Singh
Portfolio
Ah Exits !!! Where are they

23. © Shailesh Vickram Singh
Thank You
twitter ~ @svickram
blog ~ fringenotes.in