Investor founder ( promoter ) relationship is like a marriage . A package deal. One dates ( keeping it light ) over breakfast, lunch , dinner , high tea and get to know each other.
Why this approach… The investment in a founder entity is for a longer period of time . One cannot exit in a manner in which one can in a public markets aka Shares / mutual funds .
Since Auxano’s first investment in 2016 , this approach does work , barring a few ( which can be counted in 1 hand ) .
How has the relationship been over the period of time ?
As investors- both as a fund and as a fiduciary owner of our investors ( who has invested in the fund ) — we look at it as part owners , who looks to work closely with the promoters. This does not mean we run the business. We have a handshake with the promoters on the governance and the approach.
This enables the promoters to run the business and as investors, they are part of the enterprise growth .
When Auxano started out investing in this space , it was the confidence of the LP’s ( investors) in us to invest in opportunities which can deliver the returns and also contribute to the economy & the disruption ( in a positive manner ) in the ecosystem.
Its important that the promoters and the fund — are talking the same language. The promoters with their vision and sweat is working towards growing the enterprise. And on the other hand , the fund provides capital for the growth and return.
A perfect partnership- ideally.
But then its never ideal . The resources are in play ( in this case the investment ) and the ecosystem may not be the same as and when the investment was first proposed. ( these are one of the variables .. there could be more )….
This can cause certain disagreements and it’s imperative for both the promoters and investors to act accordingly & not react .
Today , governance matter had caught the eye and its good that this has been highlighted and due recognition to the same is being accorded.
As the Indian startup eco- system matures , one can look at a more engaging and meaningful relationships.
Author:
Brijesh Damodaran
