Life at India Quotient
We take 2 days off every 6 months with our entire portfolio and select LPs. Founders form teams to comment on strategies of other companies. The best advice comes from your peers, as they say.
Every month we get together informally around some industry experts and discuss topics of interest over cocktails. Founders catch up, exchange war stories, inspire and get inspired. And yes, we also have the plain old workshops.
We have an active peer group on Whatsapp where founders solve problems for each other and also exchange knowledge and insights. If someone hasn’t answered it on Google yet, you might find it here. You also discover what to read, listen or watch.
We don’t call it ‘Board Meeting’. We do a lot of homework before meeting our founders. We help founders identify the right things to measure, and the right things to spend time on. Founders think of us as friends and mentors, not as ‘Directors’.
The best advice comes from your peers
Inspire and get inspired
We do a lot of homework
If someone hasn’t answered it on Google
Some hacks to our termsheet
How do we evaluate?
We have been funding companies that not too many seem to like initially. These companies solve rather unsexy problems of the rather common people of the world. We don't care if it looks ugly, as long as it promises to grow like weed.
The process is rather subjective, though. Sometimes we feel network effect is more important than the tech, or that tech is more important than design, and sometimes we feel distribution is more important than engagement. Bear with us through these discussions as we just try to judge how strongly you feel about the market and your approach to it.
What sectors do we like?
The intersection of smartphone, big data, and design is changing our lives. We see people, consumers, around us doing all sorts of things on the smartphone. Buying, talking, getting updated, learning, entertaining themselves, playing. Basic needs like food, water, housing, healthcare, education, financial products and a little bit of discretionary spend. We think that a country of our size has big markets and bigger markets, so choosing a market is about relative size.
Just why don’t you do B2B enterprise tech companies like everybody else?
Because we suck at investing in them.
How do we reach out to you?
Find us on LinkedIn, Twitter, at events and conferences or via common friends. Become friends with our existing founders. As a last resort, you could even write us an email.
When is the best time to reach out to us?
Sunday evening, because we just can’t wait for the week to start!
It is never too early to reach out to us. The best time to pitch is when you haven’t got a single customer and the best form of pitching is a link to your product.
What do we look for in entrepreneurs?
It will help if you describe yourself to us in a word or two: hacker and blogger, designer mom of two, consultant turned cook, Musician turned data analyst, doctor turned banker, etc. We ideally want you to be all of these.
After thorough research on Google, we have found that the following criteria define a good entrepreneur. It's amazing how much our own views match (!). So either you have all of the below, or just the last one.
- Hunger - Underdogs, like struggle
- Hustle - Take very quick decisions using subconscious
- Have only one focus in life
- Very frugal, lifestyle already sacrificed
- Love breaking the norms / your surname is Bansal
What do we think of copycat models?
We think it’s about the execution, not the idea. In India some business models are just dead on arrival. And yet there are many ideas that will work very well in India. We don’t mind if you are inspired by somebody, but we prefer that you write your own script. Thanks Firstround!
What kind of companies do we back?
We have sleepless nights after we say 'sorry' to an entrepreneur. So please make sure that your company is disrupting something, shaking things, offending a lot of people. If you want some clues, leverage from the list here:
- You think the current social networks will fade away, like their predecessors, and you want to build the next one. From India.
- You were denied a loan by a bank and you want to raze down all those big buildings and shrink them to an app.
- You want to eliminate exams entirely, and want to do the assessments by monitoring the pulse rate of the students during the class.
- You don't like the current music apps, and you think your taste of music should play on its own for you.
- You want to make consumer hardware in India, even though your batch-mates think you are nuts to stay back here.
- You want to create a brand leveraging internet for marketing, sales and distribution.
Where is the catch?
Here is what our term-sheet looks like. It’s rather similar to the ones other funds have, but we sincerely hope you will want to work with us in-spite of it. Please think of us as cool people because we have published it in open.
- Type of Security - Convertible Preferred Stock, standard conversion terms
- Vesting Clause - Equally vested over 4 years, 1 year cliff
- Liquidation Preference - non-participatory and no double dip
- Anti-dilution - Broad based weighted average
- Other commercial rights of investors - Convertible Preferred Stock, standard conversion terms
- Right of first refusal on promoter or angel stock sale
- Tag along right ahead of any promoters
- Drag rights on all promoter stock after IV years from investment
- Pre-emptive rights to maintain current level of shareholding
- Limited rights to angels if there is an angel investor, he/she will only have the liquidation preference and anti-dilution rights
- Board of Directors - IndiaQuotient – right to appoint 1 director
- Veto Rights
- New share issues, dividends, Buy back
- Related party transactions
- Borrowing or early repayment
- Dissolution or liquidation
- Merger, consolidation or sale of business
- Sell transfer or grant any IP rights
- Effect any change in management control
- Change in size of the board of directors
- Sizeable Capital expenditures
- Amending of the MoA of the company
- IPO plans
- Approval of annual accounts, operating budgets
- Removal or appointment of any key employee
- Change in scope of the business
- Lock in Period - 100% of the Founder stocks will be locked in till exit of the investors.
- ESOP Pool - To be created pre investment
- Representations and Warranties - Standard
- Use of Proceeds - To be agreed upon by investors and founders
- Financial Statements & Reporting - Monthly operating MIS before 8 th of next month, bank statements, quarterly financial statements including detailed cashflows, annual audited statements. Format to be agreed upon.
- Inspection Rights - Standard
- Sunset Clause - When Investors go below 5% shareholding
- Exclusivity - For 30 days
- Diligence and legal Expenses - Upto 1% of the transaction, on actuals, to be borne by the company
- Governing Law - As per Laws of India
- Validity - The offer in this Term Sheet is valid till 30 days from the signing of termsheet.