The VC Fellowship: Key Learnings 1

Key Learning Summary: Understanding the VC Space – Mr. Pranav Bafna

Intangibles in Ecosystem & Opportunity Analysis

Many elements in the investment landscape, especially in early-stage markets, are intangible. Success
lies in aligning with the investment framework while actively collaborating with the team, which
increases the probability of making sound investment decisions.

Maturing Indian Markets

The Indian private markets are still in their formative stages but are progressing toward maturity. As this
evolution continues, new avenues such as secondary transactions will become more prevalent, offering
liquidity and broader participation.

Information Asymmetry

There remains a significant gap in access to and quality of information. Recognizing and navigating this
asymmetry is crucial in building a competitive edge.

Risks Across the Lifecycle

It’s important to have a clear understanding of the risk spectrum across a company’s lifecycle from
ideation and product-market fit to growth, scaling, and potential exits.

Ecosystem Collaboration & Value Creation

Building strong relationships with stakeholders requires a deep understanding of how to contribute
meaningfully to their journey. The ability to create value or catalyze impact is key to long-term trust and
collaboration.

Market Creation Opportunities

When exploring new markets, it’s essential to evaluate the realness and magnitude of the problem, the
existence and depth of demand, and the commercial viability of the proposed solution.

Macroeconomic Interdependencies

Private markets are not immune to macroeconomic shifts. Understanding macro trends and their
interdependencies - interest rates, capital flows, and geopolitical events helps in anticipating market
movements and stress-testing investment theses.
 The VC Fellowship: Key Learnings 2

Key Learning Summary: How Venture Funds Raise Capital from LPs – Mr. Anup Jain

Thesis-Driven Differentiation: A compelling and clearly articulated investment thesis remains

fundamental. LPs typically assess fund performance over an 8–10 year horizon, with a strong focus on
capital distribution and risk-adjusted returns.

Fund Model & Benchmarking: A fund’s success lies at the intersection of a sound mathematical
strategy and a differentiated thesis. LPs expect private funds to outperform public markets by at least
10%. Differentiation must stem from domain expertise, relevant track record, and clarity in fund
economics.

Institutional-Grade Preparation: Effective fundraising collateral includes both short-form and long-
form pitch decks, supported by well-organized data rooms addressing regulatory, legal, and policy-
related disclosures. First-time managers should demonstrate a professional approach that mirrors large
fund standards.

Tailored LP Outreach: Building a curated and relationship-driven LP pipeline is critical. Outreach must
be strategic and personalized, especially when targeting institutional capital.

Capital Sources & Expectations: Institutional LPs provide patient, long-duration capital. In contrast,
family offices and HNIs tend to expect liquidity earlier in the fund lifecycle, often targeting mid to early
exits.

Fundraise Timeline: The journey from first close to final close often spans 18–24 months. LPs
appreciate transparency and consistency throughout this gestation period.

Go-To-Market Flexibility: Fund managers can adopt diverse GTM strategies based on their networks and
the nature of LPs they’re targeting. There is no one-size-fits-all approach.

First-Time Manager Playbook: Emerging managers frequently lean on wealth management platforms to
access LPs. While these platforms charge a significant commission (4–5%), such costs must be
thoughtfully embedded into fund economics.
 The VC Fellowship: Key Learnings 3

Key Learning Summary: AIF Structuring – Mr. Pranav Bafna

• Structurally, most AIFs operate under a Trust or LLP model. Trusts are often preferred due to
better taxation and regulatory clarity under the Indian Trust Act (1882).
• ⁠The ecosystem involves multiple players: the sponsor, who contributes capital and shows
commitment (₹5 crore or 2.5% of the corpus - whichever is lower); the Trustee Company, which
holds the fund; and the Investment Management Company (IMC), which earns management fees
and carries out investment activities under a formal agreement.
• ⁠Foreign and domestic LPs contribute directly into this structure, creating a pooled capital
mechanism ready for deployment.
• ⁠On the operational side, fund administrators play a vital role. They include custodians, RTAs
(Registrar and Transfer Agents), accountants, legal advisors, and auditors - all of whom ensure
that fund operations are transparent and compliant. Valuation is critical in this setup, and large,
reputable firms are typically relied upon for their credibility.
• ⁠The mechanics of fund distribution are split between American and European waterfalls.
• ⁠Some LPs may negotiate side letters, which are bilateral agreements offering preferential terms.
• ⁠Lastly, key fund processes like term sheet negotiations, due diligence, and SHA (Shareholders
Agreement) finalization are crucial. These are followed by investment committee (IC)
deliberations, where a case must be made for each investment.
 The VC Fellowship: Key Learnings 4

Key Learning Summary: How do VCs make money - Mr. Sambit Dash

VC Commercials

2:20 Rule: Standard model where GPs charge 2% management fee annually and 20% carried interest on
profits.

Hurdle Rate: Minimum return (typically 7–8%) that LPs must receive before GPs earn carry.

With catch-up /Without catch-up

VC vs PE vs Hedge Funds vs IBs: Differ in risk appetite and business model

Fund Lifecycle

• Typically spans 8 years:

• Investment Period: ~4 years (initial deployment)
• Harvesting Period: ~4 years (follow-ons, exits, distributions)
• Pre-IPO funds have shorter cycles (2–3 years)

Recycling of Capital

Generally not allowed in most funds. Unused or returned capital is often distributed back to LPs instead
of being reinvested.

ROFR (Right of First Refusal)

Provides existing investors the first opportunity to invest in a new round or buy shares before outsiders.
However not always offered and can discourage new investors.

VC Investment Approaches

• Power Law Based (Typical VC):

~60% failures, ~20% average (1–7x), ~15% great (8–20x), ~5% exceptional (20x–100x)

• Focused Portfolio Approach (Typical PE):

Fewer investments, more capital per deal

Key Players:

•GPs: Run the fund, manage portfolio, scout companies, find exits

•LPs: HNIs, Family Offices, Banks, Corporates, Funds of Funds

 The VC Fellowship: Key Learnings 5

Key Learning Summary: AI in Venture Capital – Mr. Chetan Bhatia

𝐔𝐧𝐝𝐞𝐫𝐬𝐭𝐚𝐧𝐝𝐢𝐧𝐠 𝐀𝐈 𝐓𝐞𝐜𝐡𝐧𝐨𝐥𝐨𝐠𝐲 𝐒𝐭𝐚𝐜𝐤

• Master the fundamentals of LLMs (Large Language Models) and their capabilities
• Distinguish between Deep Learning, Machine Learning, and AI applications
• Comprehend different AI learning methodologies:
• Supervised Learning: Training with labeled datasets
• Unsupervised Learning: Pattern recognition without labels
• Semi-supervised Learning: Hybrid approach combining both methods
• Reinforcement Learning: Learning through reward-based feedback
• Reinforcement Learning from Human Feedback (RLHF): Human-guided optimization

𝐀𝐈 𝐌𝐨𝐝𝐞𝐥 𝐀𝐫𝐜𝐡𝐢𝐭𝐞𝐜𝐭𝐮𝐫𝐞

• Base Models: Foundation models trained on large datasets

• Fine-tuned Models: Specialized versions adapted for specific tasks
• Retrained Models: Models rebuilt for particular domains
• Predictive AI: Forecasting and analysis applications
• Generative AI: Content creation and synthesis capabilities

𝐃𝐞𝐚𝐥 𝐒𝐨𝐮𝐫𝐜𝐢𝐧𝐠 𝐒𝐭𝐫𝐚𝐭𝐞𝐠𝐲

• Traditional sourcing methods remain valid

• Data-driven approaches provide crucial competitive edges
• Personal sourcing strategies must evolve with AI capabilities
• Identify founders building solutions for genuinely difficult problems

𝐌𝐚𝐫𝐤𝐞𝐭 𝐈𝐧𝐭𝐞𝐥𝐥𝐢𝐠𝐞𝐧𝐜𝐞

• Study successful AI investment patterns from leading VCs (Blume, Lightspeed, Together)
• Analyze portfolio companies and investment thesis of top-tier funds
• Track emerging trends in AI application across industries

𝐃𝐞𝐚𝐥 𝐄𝐯𝐚𝐥𝐮𝐚𝐭𝐢𝐨𝐧 𝐅𝐫𝐚𝐦𝐞𝐰𝐨𝐫𝐤

𝐓𝐞𝐜𝐡𝐧𝐨𝐥𝐨𝐠𝐲 𝐀𝐬𝐬𝐞𝐬𝐬𝐦𝐞𝐧𝐭

• Evaluate the sophistication of AI implementation

• Assess whether solutions address genuinely complex problems
• Prioritize B2B applications with clear enterprise value propositions
• Understand the technical moat and defensibility of AI solutions
 The VC Fellowship: Key Learnings 6

𝐎𝐩𝐞𝐫𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐄𝐱𝐜𝐞𝐥𝐥𝐞𝐧𝐜𝐞

𝐂𝐨𝐧𝐭𝐢𝐧𝐮𝐨𝐮𝐬 𝐋𝐞𝐚𝐫𝐧𝐢𝐧𝐠 𝐑𝐞𝐪𝐮𝐢𝐫𝐞𝐦𝐞𝐧𝐭𝐬

• Establish milestone-based learning frameworks to keep pace with AI evolution

• Maintain updated understanding of emerging AI technologies and methodologies
• Regularly reassess investment criteria based on technological advances

𝐖𝐨𝐫𝐤𝐟𝐥𝐨𝐰 𝐈𝐧𝐭𝐞𝐠𝐫𝐚𝐭𝐢𝐨𝐧

• Systematically integrate AI tools into existing venture capital processes

• Automate routine tasks to focus on high-value strategic decisions
• Leverage AI for enhanced due diligence, market analysis, and portfolio management

𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐅𝐨𝐜𝐮𝐬 𝐀𝐫𝐞𝐚𝐬

𝐇𝐢𝐠𝐡-𝐈𝐦𝐩𝐚𝐜𝐭 𝐎𝐩𝐩𝐨𝐫𝐭𝐮𝐧𝐢𝐭𝐢𝐞𝐬

• AI solutions addressing complex, previously unsolvable business problems

• B2B applications with clear ROI and scalability potential
• Technologies that fundamentally transform industry workflows rather than incremental
improvements

Success in AI-focused venture capital requires both deep technical understanding and strategic
application of AI technologies in the investment process itself.
 The VC Fellowship: Key Learnings 7

Key Learning Summary: How to build an investment thesis - Mr.Divyanshu Bali

Investment Theses & Types

Investment theses can exist at three levels: fund-level (broad strategic direction), sector-level (deep
industry insight), and company-level (startup-specific rationale). This session focused on the sector
level, which requires domain expertise and thematic clarity.

Core Elements of a Thesis

A strong thesis is original, bold, and rooted in deep research. It should express a clear point of view
backed by evidence and demonstrate the conviction to challenge consensus when needed.

Investment Stages and Key Focus Areas

In venture, focus on founder insight and market timing. In growth, assess traction and revenue
expansion. In buyouts, evaluate profitability and value creation levers. Each stage requires a distinct
investment lens.

The Process

Start by identifying macro or sector shifts and anchor them to core, enduring beliefs. Conduct deep
research, define the problem, propose a solution, identify risks, and articulate “What You Need to
Believe” (WYNTB) for the thesis to hold.

Catalyst Identification

Look for triggers that make a thesis timely like innovation, regulatory changes, or demand inflection
points. The right catalyst enhances both timing and conviction.

Risk Framework

Use a matrix of Known vs Unknown and Controllable vs Uncontrollable risks. Identify key unvalidated
assumptions and develop strategies to mitigate them early on.

Crafting the Narrative

Build a clear and compelling story around the thesis. Develop talking points, list open diligence
questions, and identify relevant startups that align with the thesis.

Career Application

A well-developed thesis showcases your thinking and value. It helps in VC job interviews, networking,
and making a strong impression as a thoughtful, research-driven candidate.
 The VC Fellowship: Key Learnings 8

Key Learning Summary: Business Model Canvas - Mr. Pranav Bafna

The Business Model Canvas is not a one-size-fits-all template. Its real strength lies in how flexibly it can
be applied and interpreted based on sectoral nuances. Whether it’s a high-growth D2C brand optimizing
for geography and distribution or a fintech innovator building around data, the BMC provides a powerful
lens to align strategy, execution, and value creation.

For D2C (Direct-to-Consumer) Businesses:

• Distribution and Brand Reputation are critical under Channels and Customer Relationships. The
efficiency of last-mile delivery, control over customer experience, and the trust built through
branding directly impact loyalty and margins.
• Geography-wise P&L becomes a key layer of insight, often tied to Customer Segments and Cost
Structure. Understanding regional performance helps optimize logistics, marketing spends, and
inventory management.

For Fintech Propositions:

• Customer Data becomes a core Key Resource. The ability to leverage data for underwriting,
personalization, fraud detection, and user experience differentiates leading fintech platforms.
• Trust, regulatory compliance, and seamless digital onboarding are central to the Value
Proposition and Customer Relationship blocks.

Building Blocks of BMC

1. Customer Segments

• Defines the different groups of people or organizations a business aims to serve.

• Segments can be based on needs, behaviors, or demographics.

2. Value Propositions

• Describes the bundle of products and services that create value for a specific customer segment.
• Answers: Why do customers buy from you?

3. Channels

• Outlines how a company delivers its value proposition to its customer segments.
• Includes communication, distribution, and sales channels.

4. Customer Relationships

• Explains how a company interacts with its customers.

• Can range from personal assistance to automated services or communities.
 The VC Fellowship: Key Learnings 9

5. Revenue Streams

• Represents the cash a company generates from each customer segment.

• Includes direct sales, subscriptions, leasing, licensing, etc.

6. Key Resources

• Describes the most important assets required to make the business model work.
• Can be physical, intellectual, human, or financial.

7. Key Activities

• Highlights the most important actions a company must take to operate successfully.
• Includes production, problem-solving, platform/network activities.

8. Key Partnerships

• Identifies external companies or suppliers that help the business function.

• Motivations include risk reduction, resource access, and economies of scale.

9. Cost Structure

• Details the major costs involved in operating the business.

• Can be fixed or variable, and should align with key activities and resources.
 The VC Fellowship: Key Learnings 10

Key Learning Summary: Value Proposition & Growth Strategies – Mr. Ajay Jain

Value Proposition: The Foundation of Your Business

• The value proposition is the promise a company makes to its customers about the benefit they’ll
receive.
Ask:
• What problem are you solving?
• For whom are you solving it?
• Why will they choose you over competitors?
• The answer should be rooted in customer empathy — a clear understanding of their pain points,
priorities, and willingness to pay.

Defining a Strong Unique Value Proposition (UVP)

A compelling UVP is built on three pillars:

• Gains: What measurable or emotional advantages does the customer experience?

• Pains Solved: What critical pain points are eliminated or reduced?
• Benefits: What holistic value does the customer derive from your solution?

Your UVP should directly align with underserved customer segments — this alignment is key to finding
Product-Market Fit (PMF).

Product-Market Fit (PMF): When Value Meets Demand

• PMF is NOT typically achieved at the Seed or early stages — early phases are about hypothesis
testing and iterations.
• Most companies achieve PMF around Series B, when retention stabilizes and growth becomes
predictable.
• PMF arises when:
• Your value proposition deeply resonates with the target market.
• Customers retain, refer, and are willing to pay — indicating product pull.

Framework: Problem → Solution → Fit → Scale

Growth Engines: Sustainable and Strategic: Use the AARRR framework to drive and analyze growth:

• Acquisition – How users find you

• Activation – First experience success
• Retention – Keeping users engaged
• Referral – Users bringing others
• Revenue – Monetization mechanisms

Ask: Do you really want to grow at the cost of burning money? Unprofitable growth isn’t sustainable.
 The VC Fellowship: Key Learnings 11

Growth Metrics: LTV to CAC Ratio

• A healthy benchmark for growth-stage companies: LTV: CAC = 3:1

• Why a very high LTV: CAC may signal a problem:
• You might be underspending on acquisition, losing out on scaling opportunities.
• It may suggest inefficient marketing or missed customer segments.
• Often, founders inflate LTV or understate CAC by ignoring full costs (e.g., team, tech stack,
indirect spend).

The goal is not to optimize for vanity metrics, but to build sustainable, scalable, and customer-first
growth.

Case Example & Insights

• Airbnb during the Subprime Crisis: Found massive underserved demand for affordable travel
during tough economic times.
• Demonstrates the power of solving a timely, real-world problem with a strong value prop and lean
early operations.
 The VC Fellowship: Key Learnings 12

Key Learnings Summary: Cap Table & Stock Options (1&2) – Mr, Pranav Bafna
Part 1

• Cap Table as a Company Ownership Map

A cap table details the ownership structure of a company, outlining how shares are distributed
among founders, investors, and employees. It is essential for strategic decisions, particularly
during fundraising and exit planning.

• Understanding Pre-Money vs Post-Money Valuation

Pre-money valuation reflects the company’s worth before new capital is raised, while post-money
valuation includes the new investment. This distinction is critical in determining the equity stake
an incoming investor receives.

• ESOP Pool Structuring

Employee Stock Option Plans (ESOPs), usually 10–15% of the cap table, are typically created prior
to funding rounds. This structure protects incoming investor ownership from dilution and signals
founder preparedness and alignment.

• Dilution is Not Always a Negative Outcome

While dilution decreases an individual’s percentage ownership, it can increase the absolute value
of shares if the company’s valuation grows. Strategic dilution can unlock growth and value for all
stakeholders.

• Anti-Dilution Rights (ADR)

In the event of a down round, ADRs safeguard investors from value erosion. Investors with ADRs
may receive additional shares to maintain their value per share. Founders and early investors
usually bear the dilution impact.

• SAFE and Convertible Notes

These are instruments used to defer equity conversion until a later event (e.g., next priced round).

o SAFE/iSAFE: Agreements that convert to equity at a trigger event.

o Convertible Notes: Debt-like instruments that may convert into equity, often with a
discount or interest.

• SSA vs SHA vs Double SHA

o SSA (Share Subscription Agreement) outlines the terms of share purchase.

o SHA (Shareholders' Agreement) governs rights, responsibilities, and corporate governance.

o A Double SHA combines both into a single, unified document — often used in early-stage
transactions.

• Investor Consent Requirements

Bringing in new investors or altering the ownership structure typically requires prior consent from
 The VC Fellowship: Key Learnings 13

existing shareholders, based on SHA terms. This ensures alignment and protects control
mechanisms.

• Bottom Line
Cap table literacy is foundational for any founder. Decisions made early on around ownership,
investor rights, and equity planning have long-term implications on value, control, and strategic
flexibility.

Part 2

• Working Notes in Cap Tables

These internal notes explain the assumptions and calculations used to build and update the cap
table. While not included in the final version, they are vital for accuracy, transparency, and
ongoing revisions.

• Price Per Share Calculation

In each round, price per share is calculated as:
Pre-Money Valuation ÷ Total Shares Outstanding (before the round)
If the pre-money valuation is unknown, it can be derived by first calculating post-money valuation:
Post-Money = Fundraise Amount ÷ % Ownership of New Investor,
then subtracting the fundraise amount to get the pre-money valuation.

• Shareholding Mechanics Across Rounds

Existing investors retain the same number of shares unless they participate in the new round. If
they reinvest, their new shares are calculated based on the current round’s price and added to
their existing holdings.

• ESOP Allocation Calculations

When creating an ESOP pool, the percentage allocation is calculated based on the non-ESOP
portion of the cap table. For instance, if x% is to be allocated for ESOPs, then 1–x% represents
existing shareholder ownership.

• Anti-Dilution Mechanisms
Two primary approaches are used to protect investors during down rounds:

o Full Ratchet: Adjusts the earlier investment price to match the new lower price, giving
investors more shares for the same investment. This approach can severely dilute
founders and may complicate future rounds.

o Weighted Average: Uses a blended price formula that accounts for both the old and new
investment prices and volumes. It’s more balanced and often negotiated by founders
aiming to reduce extreme dilution.

• Founder Best Practices

Strong founders proactively negotiate for weighted average provisions over full ratchet terms and
maintain clear, well-documented cap table assumptions from the outset.
 The VC Fellowship: Key Learnings 14

Key Learning Summary: How to Build an Investment Memo – Mr. Marmik Mankodi

• Purpose of Investment Memo Note

o Build Conviction in the investment idea based on objective evaluation.
o Display Opportunity clearly to the wider investment team, helping in internal alignment.
o Gauge Deal Terms early and understand what might be considered fair.
o Helps filter founder optimism and contributes to consensus-based decisions.
• Scope and Frequency
o Scope: Always contextualized within a sector-level thesis, not in isolation.
o Frequency:
o Short Memos: 2–3 per quarter, for early-stage promising companies.
o Long/Full Memos: Once a quarter or semi-annually, when there’s deep interest.
• Key Components
o Market: Size, growth, trends.
o Problem: Clarity and relevance.
o Approach: Solution uniqueness, business model.
o Conclusion: Investment recommendation.
o Risks with Mitigation Plans must be clearly stated.

Due Diligence Before Memo

• Includes:
o In-depth TAM Analysis
o Key metrics, KPIs, risk factors
o Customer calls and feedback
o Founders’ reference checks
o Exit models and adjacent markets

• Focus & Time Allocation in VC Role

o Sourcing: 60%
o Thesis Building: 20%
o Portfolio Company Assistance: 20%

Earnings Calls and Industry Reports are foundational resources for building robust investment or
research theses.
 The VC Fellowship: Key Learnings 15

Key Learnings Summary: Ask Me Anything – Mr. Vivek Gambhir

About Consulting

• Specialization enables value beyond generic questions.

• Structured thinking, adaptability, and exposure across industries are crucial.

R&D Investment

• India lacks strong R&D investments – signals need for VCs to support tech-based innovation.
• Encouragement is needed in corporate and educational institutions.

Career Development

• Emphasize AI literacy, soft skills, adaptability, and continuous learning.

• Learning & Unlearning is the process.

Traits of Exceptional Founders

• Deep conviction in the problem.

• Mission-oriented and inspirational.
• Strong problem-solving belief.
• Resilient and self-aware.
• Deep customer obsession.

Not All Startups Need VC funding

• Many startups can succeed via bootstrapping, debt, or credit.

• Sectors like healthcare, defense tech, climate, and manufacturing are gaining investor
interest.

Strategic Opportunity – Manufacturing

• India’s manufacturing push is crucial to GDP and job growth.

• Current global geopolitics give India a chance to become a manufacturing alternative.

Networking & Personal Brand

• Networking is career infrastructure.

• Build a personal brand around authentic contribution and differentiation.
• Be an opportunity giver, an opinion seeker and a lot of times opportunities come from weaker
ties.
 The VC Fellowship: Key Learnings 16

Global Aspirations

• A maturing ecosystem with more second-time founders and stronger capital returns.
• Indian founders are now building for global markets with solid unit economics.
• Founders aspire beyond borders while rooting in context.
• Success Lies in navigating Global teams with empathy.

Execution & Business Design

• Flexible funds enable dynamic portfolio construction: Large corpus = optionality.

• Structured problem solving: Borrow from consulting rigor in scaling startups.
• R&D in India: Still a question mark — room for innovation-led differentiation.
• Profit metrics differ by stage: Prioritize GM → CM2 → EBITDA. Use CAC/LTV as filters.

Startup & Market Strategy

• Building critical scale takes 5–7 years: Patience is key; markets are still shallow.
• Start narrow, expand later: In the early days, optimize for range, demand & passion are leading
indicators.
• Early business = nonlinear: Scaling doesn’t always follow a straight path; expect complexity.
• Startups riding ONDC & govt. Support: Structural tailwinds like ONDC create new opportunity
layers.
 The VC Fellowship: Key Learnings 17

Key Learning Summary: Assessing the founding Teams – Ms. Shuchi Pandya

Fireside Ventures: An Overview

Fireside Ventures is a venture capital firm with a dedicated focus on early-stage consumer brands in
India. The firm's investment philosophy is anchored in the belief that rising domestic consumption,
coupled with India's evolving consumer aspirations, presents a significant opportunity for brand creation
and growth. Fireside aims to back visionary founders who are capable of building enduring, differentiated
consumer brands.

Investing in Fashion: A Challenging Yet Transformative Sector

Fashion, as a consumer category, is notably complex and high-risk. The industry has a high failure rate
due to rapidly changing trends, inventory inefficiencies, and supply chain challenges. However, the
segment offers potential for disruption when founders integrate technology to drive efficiency,
particularly in inventory management, distribution, and supply chain operations. Models like slow
fashion, which prioritize sustainability and operational discipline, are increasingly relevant and
investable.

The Nature of Consumer Startups

Unlike technology ventures, consumer startups are deeply individualistic in their value propositions. No
two businesses are truly alike. Success often hinges on how well founders understand their brand's
intrinsic strengths and tailor their strategies to complement those. Cookie-cutter approaches rarely work
in this space—each brand requires a bespoke roadmap.

The Power Law in Consumer VC

Unlike traditional tech VC models that follow a classic power-law distribution—where 80% of value is
typically generated from 20% of deals—the consumer space sees a relatively broader distribution of
returns. Fireside’s experience indicates that 60–70% of portfolio value often comes from 30–40% of
investments. This implies that consumer investing is less binary and offers a wider spread of viable
outcomes.

Understanding the various Alphas

In early-stage consumer investing, founders are expected to demonstrate multiple sources of

competitive edge—referred to as "alphas." A strong founding team typically exhibits at least 6–7 of the
following:

• Deep consumer insight: An intuitive and data-backed understanding of consumer behavior and
need gaps.

• Robust supply chain: Ability to control quality, margins, and scalability.

 The VC Fellowship: Key Learnings 18

• Brand-building capability: A compelling narrative, strong visual identity, and emotional connect
with the consumer.

• Distribution excellence: Effective go-to-market strategy across digital and offline channels.

• Product innovation: Constant iteration and relevance in product design, formulation, and
packaging.

• Operational clarity and financial discipline: A grounded sense of unit economics, margin levers,
and capital efficiency.

Founder Evaluation Framework

1. Foundational Drivers

• Passion: This is non-negotiable. A founder’s deep, intrinsic drive is often the single biggest
determinant of endurance through tough cycles.

• Consumer-Centricity: The best founders are obsessively focused on customer needs—listening

closely, iterating fast, and building with empathy.

• Relevant Experience: Prior operating experience, sector knowledge, or startup exposure often
accelerates decision-making and execution maturity.

2. Strategic Clarity

• Vision & Ambition: Does the founder articulate a clear North Star? The vision should be both bold
and rooted in market reality.

• Problem-Solving Rigor: Are they tackling a real, validated pain point? Superficial problem
definitions are red flags.

• Clarity of Thought: The ability to distill “what they’re solving” and “why now” into a concise,
compelling narrative is critical.

3. Sales Capability & Storytelling

• Narrative Strength: Can the founder convincingly sell the product, mission, and vision?
Persuasion is crucial in early fundraising, hiring, and sales.

• Product-Led GTM: Are they driving growth through product strength rather than just marketing
spend? Strong founders think distribution with the product, not after it.
 The VC Fellowship: Key Learnings 19

4. Execution Muscle

• Data vs. Instinct: Effective founders strike the right balance—using intuition to navigate
ambiguity, and data to sharpen decision-making.

• Early Traction through Business Development: Strong indicators include the ability to secure
partnerships, pilot customers, or meaningful GTM collaborations early on.

5. Leadership & Team Building

• Reputation & References: What do past team members, peers, or investors say about them?
External validation can reveal leadership depth.

• Operational vs Inspirational: Are they just managing day-to-day ops, or truly energizing the team
around a mission?

• Organizational Awareness: Do they understand industry dynamics well enough to attract and
retain the right people?

• Self-Awareness: Recognizing and addressing personal skill gaps signals maturity and
coachability—critical for long-term scale.

6. Investor Lens: The Alpha Question

• Finding the Alpha: Beyond the founder, is there a clear, enduring edge in the market or model that
offers long-term defensibility?

o Is the space power-law driven or margin/efficiency-driven?

o Are there insights or distribution layers the founder uniquely understands?

Marketplaces:

Marketplace businesses, while highly scalable, are inherently capital-intensive and require significant
upfront investment in infrastructure, user acquisition, and trust-building. Reaching profitability often
takes time, as early-stage capital is typically directed toward growing both sides of the platform — supply
and demand — and reinforcing network effects.

These models tend to operate in winner-takes-most or winner-takes-all markets, where a few

dominant players emerge as category leaders — the “Kings and Queens.” Once market leadership is
established, it becomes difficult for challengers to displace incumbents due to high switching costs,
brand loyalty, and deeply embedded ecosystems.

A classic example is Amazon vs Snapdeal. While both entered the Indian e-commerce market early,
Amazon’s relentless investment, operational excellence, and global backing enabled it to outpace
competitors. Snapdeal, despite early traction, struggled to maintain market share and scale sustainably,
illustrating the harsh competitive dynamics of marketplace businesses.
 The VC Fellowship: Key Learnings 20

Key Learning Summary: Careers in VC – Ms. Saumya Agarwal

People are the most critical asset in any organization. They form the foundation on which culture, innovation,
and long-term success are built. Investing in the right individuals and fostering an environment where they can
thrive is not just beneficial — it is essential.

Along the professional journey, taking breaks should not be seen as a setback but rather as a meaningful pause.
Such intervals often provide space for reflection, realignment, and the pursuit of renewed purpose.

Equally important is finding and working on something one is passionate about. Passion fuels perseverance,
making challenges feel purposeful and progress more fulfilling. Especially in the early stages of a career, seeking
discomfort — rather than avoiding it — can accelerate growth. It is through unfamiliar and demanding
experiences that learning compounds and character is built.

Investing Vs Non-investing Roles

Investing Roles Non-Investing Roles

Deal sourcing Support functions

Market/competitive analysis Operator roles

Networking with founders Administrative roles

Portfolio support Legal, compliance, finance, HR

Advisors (board/observer seats),

Execution & diligence
deal closure

Investing Roles

Entry-Level: Peak XV hires across sectors

• Typically begin at the Analyst level (2-year track; pre-MBA or undergrad level).
• Focus areas include deal sourcing, market/financial analysis, and relationship building.
• Networking is critical — relationships drive deal flow and diligence quality.
• Entry-level roles typically do not include carry.

Career Progression

• Common trajectory: Associate → AVP/VP → Principal → Partner.

• Future Avenues: an MBA, a stint in a Founder’s Office, or entrepreneurial experience.

 The VC Fellowship: Key Learnings 21

Non-Investing Roles

Strategic Functions Supporting the Fund

• Includes Technology, Finance, Legal, HR, and IT.

• These roles have gained prominence over time and are now seen as critical enablers of fund
performance.

Role Characteristics

• Often support operational and administrative aspects of fund management.

• Contribute through portfolio support, governance, process excellence, and advisory or observer roles.
• Carry may be offered at mid-to-senior levels based on impact and seniority.

Career Trajectories

Can transition into CXO positions at portfolio companies or evolve into internal leadership roles.

The venture capital industry offers vast and dynamic opportunities across both investing and non-investing
functions. It attracts professionals who are not only ambitious and analytical but also purpose-driven and
adaptive. Importantly, the compensation and benefits in VC roles tend to be relatively higher than many other
industries, reflecting both the value placed on talent and the potential for long-term wealth creation —
especially through performance-based incentives like carry. For those seeking impact, growth, and rewarding
careers, VC offers an exciting and deeply fulfilling path.
 The VC Fellowship: Key Learnings 22

Key Learning Summary: Secondary Share Sale & Valuation – Mr. Pushkar Singh

1. Types of Shares & Capital Flows:

• Primary Shares: New shares issued by the company to raise capital—this increases the total share
count and dilutes existing shareholders.

• Secondary Shares: Existing shares sold by one shareholder to another (e.g., founder to investor or
investor to investor)—no dilution as no new shares are issued.

• Buybacks: Company repurchases its own shares, reducing the outstanding share count.

• Offer for Sale (OFS): In IPOs, a mix of primary (new capital) and secondary (existing shareholder exits)
shares.

2. When Secondary Sales Happen:

• In early rounds (Seed to Series A), capital is typically all primary, aimed at company growth.

• From Series B onwards, secondaries often accompany primary fundraises, enabling early stakeholders
to access liquidity.

• ESOP Liquidity: Employees can sell vested stock options as secondary shares, especially in later-stage
rounds.

3. Why Secondaries Matter:

• Startups are staying private longer; secondary sales provide interim liquidity for founders, employees,
and early investors.

• For VC funds, secondaries help improve DPI (Distributions to Paid-In Capital)—a key metric for
realized returns—especially important when IPOs or acquisitions are delayed.

• Funds may also create dedicated secondary vehicles to acquire positions from earlier investors or
employees, offering a path to rebalance portfolios or return capital to LPs.

4. Strategic Considerations for Founders:

• Treat secondary sales as a liquidity tool, not an exit—they provide personal de-risking and mental
bandwidth.

• Ensure transparency with the board and investors; secondary transactions often require board
approval and may be subject to ROFR (Right of First Refusal) clauses.

• Founders should raise from investors they trust and align with, especially when secondaries are on the
table.
 The VC Fellowship: Key Learnings 23

5. Non-Dilutive Capital Alternatives:

• Venture Debt: Loan capital raised alongside equity; no dilution but includes repayment obligations.

• Revenue-Based Financing: Founders pledge a portion of future revenue in return for upfront capital—
ideal for capital-efficient businesses.

6. The Bigger Picture:

• The global secondary market is growing, driven by the trend of companies delaying IPOs and the need
for interim liquidity solutions.

• Well-structured secondary programs help align long-term incentives across stakeholders while
maintaining cap table integrity.
 The VC Fellowship: Key Learnings 24

Key Learning Summary: Intro- Financial Planning & Analysis – Mr. Pranav Bafna

1. Ask the Right Questions, Not Just Find Answers

Strong financial analysis—and investing—relies on asking sharp, strategic questions. Data is only as
useful as the lens through which it's examined.

2. Understand the Three Core Financial Statements

• Profit & Loss (P&L): Reflects revenue and profit, but can be misleading if it overstates one-time gains or
non-operating income. Focus on recurring revenue from core operations and contribution margins for
real insight into profitability.

• Balance Sheet: Shows the company’s financial position—assets, liabilities, and equity. Key to
understanding net worth (Equity = Assets – Liabilities) and how a company is capitalized (short-term vs
long-term capital).

• Cash Flow Statement (CFS): Validates whether profits are translating into real cash. Divided into three
segments:

o Operating Activities: Day-to-day business cash flow.

o Investing Activities: Capital expenditure and acquisitions.

o Financing Activities: Debt, equity, and returns to shareholders.

All three statements are interlinked—knowing any two allows reconstruction of the third.

3. Revenue Recognition & Valuation Nuances

• Scrutinize revenue recognition policies; they can be manipulated to inflate performance (especially in
early-stage companies).

• Valuation benchmarks vary by industry:

o SaaS: Valued at ~7–8x revenue (due to strong retention and recurring income).

o FMCG: Valued at ~1–2x revenue (due to high churn and reliance on marketing).

• For SaaS, sub-90% retention is generally a red flag for investors.

 The VC Fellowship: Key Learnings 25

4. Key Financial Concepts for Analysis

• Contribution Margins (CM): Crucial for understanding unit economics.

o CM1 = Revenue – COGS & Logistics

o CM2 = CM1 – Marketing Costs

If CM2 > Fixed Costs, the business is operationally profitable.

• Head Office Costs: Central functions (like R&D) not directly tied to revenue—important when allocating
costs across business units.

• Convertible Instruments: Initially appear as debt on the balance sheet and convert to equity later—
important for cap table planning.

• Operating on Credit: Smart use of working capital can preserve internal funds—key for cash-strapped or
early-stage businesses.

5. Role of Investors Across Stages

• Seed: Bring technical and domain knowledge.

• Pre-Series A: Help in shaping and validating product-market fit.

• Growth Stage: Institutionalize systems, governance, and optimize EBITDA.

6. Financial Engineering Comes Later

It begins only post-positive EBITDA and involves strategic use of debt, equity, and capital allocation to
enhance shareholder value.
 The VC Fellowship: Key Learnings 26

Key Learning Summary: Financial Modelling Guardrails – Mr. Pranav Bafna

➢ A Strong Narrative Drives Credible Numbers, Which Drive Valuation

Good financial models are rooted in a compelling business story. Numbers alone don’t create value—
context and clarity behind the numbers do.

➢ Valuation is Subjective, Not Absolute

There is no single “correct” valuation. It's a function of assumptions, perspectives, and stage of
business—art backed by science.

➢ Past & Present Drive the Future

Deep analysis of historical and current financial statements provides the foundation for forecasting
and future valuation.

➢ Understand the Drivers First, Numbers Come Later

Financial modelling is 90% about making sense of business drivers—market dynamics, pricing,
retention, growth levers—and only 10% about converting those into spreadsheets.

➢ Two Modelling Approaches:

➢ Bottom-Up: Start with granular inputs (SKU-level sales, customer cohorts, cost line items) and build
upward to project revenues and costs.

➢ Top-Down: Begin with macroeconomic or industry-wide trends, estimate market share, and layer in
company-specific projections.

➢ Apply the Pareto Principle (80/20 Rule)

Focus on the 20% of key variables that drive 80% of the business outcome. This includes digging deep
with founders to understand their vision, priorities, and execution capabilities.
➢ Revenue and Cost Drivers Are Often the Same
Most growth levers (e.g., customer acquisition, sales channels, product expansion) also drive costs—so
forecast both in tandem, not in isolation.
 The VC Fellowship: Key Learnings 27

Key Learning Summary: Discounted CashFlow – Mr. Pranav Bafna

1. Valuation is Contextual, Not Formulaic

• Valuation is more a function of timing, negotiation, and market sentiment than pure math.

• A compelling narrative backed by numbers is critical—investors invest in stories as much as

spreadsheets.

2. DCF as a Tool: Strengths & Limitations

• DCF is a foundational valuation method: it estimates future free cash flows, discounts them to present
value using the cost of capital, and adds a terminal value.

• Terminal value often makes up 80–90% of the DCF output—small changes in assumptions (growth
rate, discount rate) can significantly swing the valuation.

3. Early-Stage vs. Late-Stage Valuation

• For early-stage startups, DCF is less relevant; focus is on:

o Cap table dynamics

o Exit-based multiples

o Expected IRR and timelines

• For later-stage companies, traditional valuation multiples like P/E and EV/EBITDA become more
meaningful.

4. Use a ‘Football Field’ Approach

• Combine multiple valuation methods—DCF, comparables, precedent transactions, exit multiples—

to create a realistic value range.

5. Assumptions Are Everything

• A model is only as good as the assumptions it’s built on—validate them rigorously.

• Clearly document and justify key inputs to ensure transparency and credibility.

6. Anchor Forecasts in Real Business Drivers

• Your model should reflect actual unit economics and operating metrics, such as:

o CAC, churn, pricing, sales volumes, margins

o Scalability and feasibility of business operations

 The VC Fellowship: Key Learnings 28

7. Prioritize IRR and Liquidity for Investors

• Investors care about return on investment, liquidity horizon, and exit pathways—not just theoretical
valuations.

• Understand that price reflects market mood, while value reflects business fundamentals and future
potential.

8. Advanced Concepts & Metrics

• ROCE > ROE: ROCE better reflects overall capital efficiency, including debt.

• Dupont Analysis: Breaks down ROE into components—margins, asset efficiency, and leverage.

• Always stress-test the model for sensitivity to key variables—especially discount rate, terminal growth
rate, and revenue projections.

9. Triangulate & Align Story with Numbers

• Always cross-validate with multiple approaches and ensure that your valuation story aligns with the
numbers.

• Consistency between strategic vision and financial output is crucial in investor conversations.
 The VC Fellowship: Key Learnings 29

Key Learning Summary: Corporate Finance – Ms. Shobhankita Reddy

1. No Fixed Template—People > Pedigree

• Success in venture capital isn't about MBAs or CFAs—adaptability, sharp judgment, empathy, and
curiosity are far more valuable.

• Much of the learning is on the job—VCs evolve with each deal, founder, and market cycle.

2. Understanding Capital Types

• Equity = Permanent capital: Investors take long-term bets, but face full risk of loss in failure.

• Debt = Temporary capital: Needs to be repaid; typically used post-product-market fit to manage cash
flow, protect valuations, and reduce dilution.

• Venture Debt: Tailored for later-stage startups with predictable revenue but ongoing losses—bridges
funding needs with limited dilution.

3. Debt ≠ Red Flag (When Used Right)

• Startups can and do raise debt safely:

o Especially useful for working capital cycles, capex, or growth initiatives.

o Helps avoid down rounds or delaying equity raises.

4. Venture Debt Due Diligence is Stringent

• No formal credit rating system like in traditional finance.

• Lenders rely on network, reputation, traction metrics, and investor backing.

• Key factor: Founder credibility and investor cap table.

5. Debt Instruments & Innovation in India

• Indian venture debt is largely fixed-rate and conservative.

• Emerging structures:

o Revenue-Based Financing (RBF)

o Warrants and hybrid instruments

• These are growing globally, but still niche in India.

6. Governance Dynamics: Equity vs. Debt

 The VC Fellowship: Key Learnings 30

• Equity investors often take board seats, voting rights, and influence strategic decisions.

• Debt investors have limited governance rights, but priority in repayment during liquidation.

• In case of failure, debt is repaid first, while VC capital is fully at risk.

7. Capital Stacks Can Be Flexible

• A funding round may include venture debt, NBFCs, family offices, and more—led by one player but
syndicated for flexibility.

• Key is ensuring alignment of terms and clarity across instruments.

8. Term Sheets Define the Relationship

• A term sheet is more than economics—it defines:

o Nature of issued shares (e.g., preference vs. common)

o Pre-money and post-money valuation

o Governance rights (board seats, voting powers)

o Economic rights (liquidation preference, anti-dilution, etc.)

 The VC Fellowship: Key Learnings 31

Key Learning Summary: Understanding Due Diligence – Mr. Shiva Shanker

1. Timeline & Process Overview

• The journey from term sheet to payout takes at least 2–2.5 months.

• The full fundraising cycle—from initial outreach to capital in the bank—can span 6–7 months.

2. Parallel Diligence Tracks

• Once the term sheet is signed, multiple diligence streams run in parallel:

o Legal: Organizational structure, ownership, contracts, IP, liabilities.

o Financial: Validation of margins, revenue accuracy, cost structure—especially critical for B2B
startups.

o ESG & Business Integrity: Checks around governance, founder history, regulatory baseline.

3. Legal Documentation is a Major Bottleneck

• Legal negotiations—especially around risk allocation, reps & warranties, and fraud clauses—often
cause the longest delays.

• Misalignment on legal language or disclosures can lead to prolonged back-and-forth.

4. Transparency is Critical

• Deals can fall through even post-Investment Committee (IC) if founders are not transparent or material
red flags emerge.

• Founders must be proactive in fixing compliance gaps and documentation issues uncovered during
diligence.

5. Documentation Discipline is Long-Term Leverage

• Later-stage investors may demand full re-verification of the company’s history—so early rigor
matters.

• Poor record-keeping can distract founders in future rounds and hurt credibility.

• Institutionalizing diligence and documentation early reduces friction and builds investor trust.

6. ESG and Governance Are Now Standard

• Governance and ESG expectations are codified into shareholder agreements.

 The VC Fellowship: Key Learnings 32

• ESG isn’t just about ticking regulatory boxes—it reflects values, reputation, and long-term business
integrity.

7. Institutionalize the Diligence Process

• Shift diligence and legal preparation to internal back-office teams wherever possible.

• Build repeatable processes and centralized data rooms to ensure efficiency in current and future
rounds.
 The VC Fellowship: Key Learnings 33

Key Learning Summary: Value addition by VCs – Mr. Anupam Pandey

1. Beyond Capital: Strategic Partners

• VCs bring far more than money—they actively support portfolio management, go-to-market
strategies, and scaling efforts.

• Hands-on investors can accelerate market access, customer acquisition, and operational maturity.

2. Strategic Involvement Can Define Outcomes

• Active VC engagement can make or break a startup—as demonstrated in success stories like Ola.

• The quality of involvement often outweighs the quantity of funding.

3. Clarity, Connections, and Catalysts

• VCs offer clarity in decision-making, provide industry connections, and act as sounding boards for
strategy.

• Their network can unlock tangible outcomes—e.g., premium retail access, pilot partnerships, or key
hires.

4. Sector-Specific Value Matters

• In industries like healthcare or deep tech, VCs with domain expertise add disproportionate value—
such as guiding pilots, regulatory navigation, or customer introductions.

5. Level of Involvement Varies by Stake & Stage

• The larger the VC’s stake, the more involved they typically are.

• Engagement evolves with company maturity—from helping find product-market fit early, to driving
governance and metrics at growth stage.

6. Governance is Non-Negotiable

• Sound governance builds trust; weak governance can unravel credibility, as seen in cases like Byju’s.

• VCs often bring governance discipline—via board structuring, audits, or compliance.

7. Choose the Right VC, Not Just the Highest Bidder

• VCs differ widely in approach, team size, experience, and post-investment support.

• Founders should prioritize alignment of vision, relevant experience, and open communication, not just
valuation.
 The VC Fellowship: Key Learnings 34

8. Feedback Loops Matter

• Great VCs foster a culture of honest, actionable feedback.

• Founders who actively seek input and treat VCs as collaborators, not just capital providers, derive
greater long-term value.
 The VC Fellowship: Key Learnings 35

Key Learning Summary: Understanding Corporate VCs – Ms. Ashna Bhadani

Understanding the role of corporate venture capital (CVC) in the startup ecosystem is essential for navigating
the evolving landscape of innovation and collaboration. India, now the third-largest startup economy globally,
has seen increasing engagement from corporates who are not only funding innovation but also actively
participating in it. Corporates look to startups for more than returns—they seek solutions to deep-rooted
business problems, access to agile talent, faster innovation cycles, and new revenue streams.

Corporates engage with startups for a variety of reasons: to drive technological innovation, expand into
adjacent markets, solve operational challenges, or explore new customer segments. These engagements take
many forms and follow a natural evolution: from early-stage pilots to seed investments, followed by vendor-
vendee relationships or co-creation models, which can lead to market validation, and eventually result in
M&A or full CVC involvement. The pathway is rarely linear, and each corporate brings its own thesis and
expectations, making every engagement unique.

There are multiple models through which corporates engage with startups. These include sponsorships,
reverse pitching, mentorship programs, third-party or in-house accelerators, corporate venture capital
arms, open innovation challenges, proof-of-concept (POC) partnerships, sweat equity models, royalty-
sharing structures, and co-creation partnerships. The approach chosen often depends on the corporate’s
stage, strategic priorities, and risk appetite.

Startups benefit significantly from corporate partnerships.

Beyond capital, corporates offer access to large-scale distribution networks, industry knowledge,
mentorship, and social proof that can accelerate credibility in the market. Corporates can also serve as early
customers or pilots, enabling startups to validate their solutions at scale. For startups looking to expand
internationally or enter regulated markets, corporate partnerships can offer a safer and more strategic path to
globalization and scale. Additionally, these partnerships can open doors for future acquisitions, serving as
both growth enablers and potential exit strategies.

On the other side, corporates also derive meaningful value from startup engagements.

Startups bring in agility, cutting-edge technology, and access to young, dynamic talent—allowing corporates
to stay competitive in fast-moving markets. Such engagements help corporates accelerate internal innovation,
experiment with disruptive ideas, and stay closer to evolving consumer behavior. With dedicated innovation
teams and CVC arms, corporations can incubate or absorb innovation more effectively, converting it into
tangible business outcomes.
 The VC Fellowship: Key Learnings 36

A successful corporate-startup relationship, however, relies on cultural compatibility. Corporates that foster a
culture of innovation—marked by open-mindedness, collaboration, risk tolerance, adaptive leadership, and
a long-term focus—tend to build more productive and meaningful partnerships. It is also important to note that
risk tolerance varies by industry, and understanding this variation is key to setting expectations around speed,
outcomes, and governance.

Startups must also tailor their approach based on whether they are selling to B2B or B2C clients. In B2B
engagements, stakeholder management becomes crucial. Startups must understand internal decision-
making hierarchies, influence chains, and ROI metrics, which are often complex and slow-moving in large
organizations. Deep alignment with the corporate’s strategic priorities and internal policies is essential for
converting pilots into lasting partnerships.

Finally, the nature of engagement also shifts as the startup matures. In the seed stage, corporates may engage
through one-off events or sponsorships. At the early stage, business support through accelerators or incubators
may come in exchange for equity. During the growth stage, corporates may provide direct investments, co-
creation opportunities, or vendor contracts. At maturity, the relationship may culminate in an acquisition, joint
venture, or long-term strategic alliance.

In conclusion, engaging with corporate VCs can offer transformational benefits to startups—but requires
thoughtful alignment, mutual trust, and a deep understanding of each other’s needs. There is no one-size-fits-all
approach.