Tushar Kansal

Jeffery:
Yeah, well like we like to do Tushar, we’re already kind of started, were already right into the thick of things. So welcome to ask an angel. Thank you very much for joining us today from Delhi. And the best way for us to start is if you can give us a little bit of a background on where you’ve come from, the places you’ve been um work-wise and what you’re looking to do now and what you’ve been doing and they’re going to do in the future. And one thing about you that nobody would know.

Tushar:
that’s a large number of questions Jeff, you know, thank you so much for inviting me and having me on your podcast. Uh so where I have come from and what is one thing about me, which nobody would know? So I was born in a small city, but my father has a transferable government job. So, uh I studied in a convent school in a small city, but my father is from India’s best institute, Indian Institute of Technology, so he was always very focused on providing the best education.

So he moved us to Delhi. And uh from there it’s been a journey of uh doing my engineering then doing my M. B. A. in finance from the University of Delhi and uh you know, initially I tried a business which was doing quite valid education but I thought I should upscale myself more. So I joined Deloitte and Touche. Then I joined India’s largest venture capital fund by the name Brand Capital, um you know largest by the number of deals they do and uh and you know uh then you know there’s a Russian telecom company, MTS, which is the largest telecom company in Russia system. I was heading their treasury in Delhi, raised almost $2.5 billion for them. Then I was chief financial officer of company owned by Guggenheim Partners. Then I thought, I have to do something for my own. So I started consultancy ventures. Personally, I’m an investor in four companies, but my company’s more or less focused on getting funding for startups for growth-stage companies uh and also getting funding for venture capital funds uh through my network of angel investors.

So this is my professional profile. Very short on my personal profile. Married. Wife is a very senior investment banker uh in India’s largest investment banking firm. So we talk finance at home all the time, which is quite boring and two kids, and happily married. And that’s about it.

So your other question was what is one thing about me which no one knows is I’m a great singer. I have always been on stage in all the colleges and even incorporates where I work, They used to call me for singing, but I like to send the religious songs. So that’s the bad part. You know, it’s, it just doesn’t add up when you are in a corporate life and singing, right? So that’s awesome. I was born in the foothills of the Himalayas, the mountains. So, and my best vacation is go to the hills.

Jeffery:
That’s great. I’m a big outdoors and mountain guy myself so I can appreciate wanting to get out, get out there and mix it up in the wilderness. So that’s awesome. So to go back to kind of some of the things that you talked about earlier and some of the companies that you work for and work through and of course your background being more heavy on the finance side.

I kind of want to explore how that really shaped, you know, the types of things that you’re doing now for helping companies raise funds, but also how you’ve made investments into companies. That the approach that you’ve taken into investing in these companies. So if we go back to kind of even your entrepreneurial days when you were working through and before and after Deloitte um how did you find that your MBA, in the background that you had, how much that helped you and the desire to work with and help early stage companies.

Tushar:
Okay. So uh so you know you are asking me about my uh days around Deloitte and uh during my entrepreneurial background and how my education helped me. So you know I tell I would tell my children to do an M. B. A. Uh any management course after working for some time. Because the real value of that course in terms of maintaining control over the business is actually when you know how to apply those things that you are learning out there.

Having said that a lot of these courses are case studies driven. They give you real-life problems to discuss and solve. So you know my education was MBA was in finance um and we were very heavy on learning all the aspects of finance. The teachers were really ferocious those days and so you know I learned I I probably did management in commerce plus management, so you know it was a lot of subjects and it did help me but My business was all about marketing, you know, it was education company. I took it to annual 800 students and you know those days uh I could, you know everywhere I saw only positive, I thought you know, 824,040,000. and uh because I saw the growth from zero and you know my time, a lot of my time actually haven’t been talking to customers who were the parents of the students and the students and finance help me a lot in terms of maintaining control over the past.

And also planning out how much to put in in marketing at the end of the day, N E C X. So you talk to Jeff um his main juice is cash flow. You know, end of the day, the costs are there, the officers are there, the salaries are there, the cars are running end of the day. If you’re uh if your targets don’t add up in terms of 25% growth, 100% close. Uh you will really face a lot of problems on the cost side and you will face pressures to restructure to send out people and that is a bad atmosphere for your culture, for your company culture or maintaining the right spirit amongst your employees.

And so you know, you have to really be focused on the cash flow on the top numbers and keep on driving them that you don’t just exceed the target, succeed the targets. And uh that’s what real finances for me, having said that those who are uh finance incentive industries like investment banking or stock markets for them, it is much more.

Jeffery:
And you find that with the education of having an MBA or just having this understanding of finance that it’s really helped you understand business is better that it helps you kind of be able to choose and pick which companies you think have the opportunity to grow. I found it in past interviews, but also just in working with a lot of different bankers that they just have a different view on how companies work, and I find that they almost become their own grouping of people that you can go after, because they tend to get startups better than the average person. I could lump in lawyers into that as well. But it just seems that anybody that’s in finance just tends to have a better grasp and understanding of maybe it’s the balance sheet and understanding how companies operate and they can drive in any industry. Doesn’t matter where you get dropped into, they just have a really good understanding of the modeling and the business. Is that something that you found equates to good success in early-stage investing?

Tushar:
So, does have a knowledge of finance make you a better investor, uh, you know, just the capacity to read balance sheets. And the an extra is deeply uh like investment bankers do. And does it give you a separate better perspective towards companies? Frankly, Jeffrey it does. You know, you don’t need to go further than Warren Buffet. I mean uh in 2008 he was approached by the US. Treasury offering him Um you know, to sell the Lehman brothers. And uh so this guy, you know, he’s on record to say that He spent 2-3 days in his room.

Does the room Studied the entire 808 you know, balance sheet? And uh the whole uh corporate booklet and on, you know, calculated each number. And he said this business does not make sense. So it does help. It does help. And uh you know, I I just wish it uh you know, that it should not make uh investment bankers and financial community negative because they tend to see more risks when they see the balance sheet. And uh, they forget the positive side of it. I’ll give you a very small example, any software which is being developed or any of capital work in progress can be counted as an asset in the balance sheet. Now, this is such a big uh thing, because you are creating something out there, you feel it is a past, the end of the data is going as an asset to your balance sheet. Now, any financial guy, I can say that, no, this is actually just software, so, but you know, uh, you know, actually a businessman would know the real value of it as an asset, so, so, you know, that’s that’s what makes a difference.

But um, you know, I just hope that a lot of accountants, especially in the financial field, they tend to be a little bit more negative than others because uh you know, they just see numbers, there is a whole business behind it, you know, there is a hole, there are teams and there are market dynamics and there are possibilities, there are possibilities of mergers and acquisitions, of selling out the company, all that Jing man, you know, so uh that’s my view about

Jeffery:
So there becomes a lot of uh bias when you know the numbers because you also look at the business side, so it becomes a lot tougher for uh for a business to grow if they’re always balancing everything off the numbers.

And it’s interesting because I found that when a business is going through um reshaping or a restructuring I guess is a better term. So when a company is restructuring, they will always remove the sales, CEO,, the person that usually is the one driving the growth because that was not working and then they throw a CFO in there because they’re going to do cost-cutting measures, so the CFO becomes the CEO and their whole goal is to restructure the entire firm and then they will remove the CFO and put back in another top salesperson as the Ceo because they want someone to aggressively grow the company.

So I completely agree with that. It’s it’s very rare that you fit someone in operationally. It still happens but not as common, but there are different times in the growth of a company when you’re moving different people into that uh most senior role in the business and really CFOs tend to be the ones that are in the restructure and consolidation and reformatting the business.

So I can totally understand where you’re coming from that. There’s this point of view of, it’s great to know numbers, they get startups, but there’s also a point where you need to pull them away from the business so that you can have someone drive in and grow the business and that means that you need that grow CEO and not always looking at the numbers to grow.

Tushar:
Yeah, so I, you know what you are essentially saying is that uh you know, studying the numbers makes us more numbers centric and we forget the market dynamics and the sector dynamics behind.

I fully agree with that. And uh and you know, if you look at the performance of uh CFOs as ceos, I don’t have the exact data with me, I’m 100% sure. My experience tells me that uh a marketing guy who has a good CFO is a better CEO and uh because the end of the day you need to control costs also.

You know, I was being dealing with some African companies. Uh These guys are generally not good in finance and uh they just uh they cost, control is very bad and uh you know and in today’s markets uh all the time you have the value evaluation benefit, you know the mule still recently on thursday At a $9 billion dollar valuation. And if you used to be a loss making company, I’m 100% sure before getting the benefit of these valuations and this amount of money They would have run an eight ships and that’s where the CFO is handy. I’ll give you an example Tesla’s rise uh to $900 billion dollar valuation which is unimaginable. Uh You know if you look at the market reports, a lot of credit is being given to the CFO. Because Elon Musk it’s of his, you know, full of ideas and he would just out of control. So there has to be somebody who controls the entire thing in terms of maintaining a tight leash on the cost side. And that’s where so I won’t underplay the role of financial guy. But end of the day it is a marketing by who the sales guy who gets you.

And you’d read all those books uh by IBM founders and General Electric. And uh so you know, they’re limited by market there little by expanding the business to new geographies. Uh you know, recruiting the right people and uh also uh you know putting the money where the uh where the money where the color is and and and that’s I think uh that’s the real win in this business.

Jeffery:
So, is it safe to say that even in an early-stage startup, they should be looking at a part time CFO, someone that can kind of come and help them structure their uh P and L, or their balance sheets, and just really to understand better of where they’re going and help control that a bit better. And instead of putting that weight on the CEO, and expecting them to better understand the business is to really go and find one of those part time CFO consultancies to bring somebody in to help you better understand the numbers while you’re building out your company.

Tushar:
So, when you were asking me that in startup and early-stage startups, would it be better if they have a CFO ?

Jeffery:
Part-time CFO

Tushar:
Part times. Okay, my view is they should definitely have a financial controller who maintains control over the expenses and usually the mistake with startups makers, They don’t differentiate between an accountant and the CFO. And you know, an accountant is good in maintaining records, but the end of the day, uh there has to be someone who makes a proper budget and that budget has to be followed in discipline by the management. So, you know, once you have laid out the budget for the entire year, then it contains revenue side also had cost side also.

So it becomes a guidance for the marketing guys, and it also becomes a guidance for those who are spending the money. So, you know, CfOs role is way beyond that, you know, so he uh he’s just not an accountant uh with startups. Uh of course, you know, affordability is an issue. So, do you very like he said, yes, that uh part-time CFO is a solution and yes, I fully agree with that. There has to be more weight on the CFO side. On the finance side. Yeah.

Jeffery:
Well that’s great and and it reminds me of uh in my first company there was, we had grown quite quickly and there was a point where the costs and everything, we’re just going through the roof and I took a spreadsheet and I wrote down all of the areas where the people fit on this Excel sheet and they were either a cost or they were a revenue, they were bringing money in or they were a cost.

And what I did that process, it was amazing to what I discovered because as they’re moving quickly, you don’t realize that you could be just building up a lot of cost and not offsetting the revenues that are coming in and that the people may not be the right people and you may have too many people operating in that business line which is costing you a lot of money and you’re not realizing the benefit because you’re just adding people to solve problems many problems, but they may not be problems that are long-running.

It could be short, solved problems, maybe 2-3 months, but you put somebody in there to solve it for years and that becomes quite a heavy cost bird into the business and you’re not offsetting them on the revenue side. And once I did that and this was 10, 15 years ago, I have not stopped doing that. So my whole brain just basically operates in a business model of putting people into the buckets, resources into buckets so that I can understand where that conversion is going to be.

So that going forward as you continue to grow, it’s not short term growth, it’s looking at long term and can we sustain the role or do we need to shift the way we’re looking at that position and the material and the resourcing needs so that we can benefit all the spreadsheet or benefit in the cash flow and the growth of the company and it made a massive, you know, kind of wow and I would really change the way you hire, it changes the way you perceive your business because if you can get it to 70% or 60% of your business um is on the growth side and it’s paid for then you know, you’re always going to be able to offset that extra resourcing costs which is as you just mentioned, that’s the role of the CFO, that’s for a CFO to be able to help guide the ship and make sure that you are balancing the books, but also ensuring that you’re capturing that profitability so that your business does have a longer sustainability and growth. Is that a fair kind of analysis to share that when a CFO comes in, they’re not just taking records, they’re literally guiding you through how to manage resourcing and cost structures so that you can build and grow into the future.

Tushar:
So what we have asked is whether a CFO’s role is way beyond just uh calculating the numbers. And it’s actually a case of how will the management manage resources and especially looking at resources from the point of view of cash inflows or cash outflows and uh whether uh you know, building costs by adding resources in a particular side uh as vice or making a right decision about that.

So I would say that uh with the gig economy, with the culture of having more variable amount in your salaries and less of fixed salaries and outsourcing functions, uh you know, especially those ones which are not so critical to the company or can be better managed by a specialist company and having competitive bidding for that particular side. Uh So you know, all these things are actually, and you know, uh I really it stuck me Jeff what you said right now. Something which is Google is known for is that in spite of becoming so huge, it maintains the startup kind of culture where there is a lot of informal um atmosphere and uh the company avoids making silos in which people work. You know, a friend of mine heads uh Treasury of Asia in one of the largest US-listed companies. I don’t know that, I should name it. Uh, there is no founder in the company. It’s run by a board of directors because it’s 100 year old company. And it is so bureaucratic that the cost is out of control, you know, because people operate in silos and they need their own offices, their own cars, they need their own and you know, and uh, the budgets are out of line because nobody is in control.

The finance says something, the other departments says something end of the day. Uh, the man who has good weight in the border breakfast prevails and so that is, that is something which companies need to watch out for. We call it the bureaucratic kind of company. And uh, and if you want to be nimble, if you want to be like a startup culture where decisions happen faster and the decision to recruit, um, somehow, if you please don’t mind, I generally don’t like to hire and fire culture too much, although it enables companies to make faster decisions around the dynamics of the business. But end of the day, um, if you are hiring somebody and firing in three months or six months, there is someone who made a wrong decision.

So you are very right when you said that uh, you know, the cash flow part of uh deciding a where resources should be put in, where costs should be allowed is the right way of managing. Another acquaintance of mine, he joined a Japanese company in Singapore heads the entire a pack And from 2014 to 2019, five years, He took the turnover from 0 to $300 million.

So my talks with him, you know, they have cash flow. The king is cash flow, you know? so, uh, it allows you to be seen about everything and uh, maintaining a startup culture, uh, in terms of faster decision and less bureaucracy.

Jeffery:
So very scrappy.

Tushar:
Yeah.

Jeffery:
Make it happen and go quick. And I think that’s a really good segment because I think a lot of startups may, may jump into. And I’ve seen this quite a few times that as soon as they get a few dollars and they’re raised, they want to hire a whole lack of people and bring them in and start grinding away at the business. And I think a lot of the times maybe they don’t always take a look at who they’re hiring and the value of those people and what that value is going to bring back to their business.

And I’m kind of more of uh a slow higher, but be a little bit more precise on that type of role. So that that role grows within the business. If the role isn’t going to grow in the business and it’s not something that’s ever going to fill the shoes of a growth business then I think that that role should be a consultant role, it should be a part time contract or a contract role that you know only has a shelf life of you know 3 to 5 months being that resources are the most expensive part of your business.

I think if the Ceo or management team can focus in on what that role looks like and does it look like a year long role then I guess hire full-time for that year. But if you can’t see past a few months of operations instead of feeding them with and wearing millions of hats, you’ll save yourself a lot of dollars by just having them come in to solve that one problem, uh, put together a plan or at least figure out who can take over that role in the future. Um, and maybe that gets tied into a smaller role or someone else’s role that already exists in the business and becomes more of a support feature for that build-out. I think it will save the company a lot of dollars on their cash flow side, but it will also allow them to build up the key roles in the business versus building up many roles that they may not require in the next 3 to 5 years. And I think sometimes being junior in the world of hiring, you may not see that in your business today.

You just think that this role would be filled, not realizing that they’re only working at a 20-30% capacity and that the role could have been merged into multiple roles under some of your senior team at the at the early stage that that is.

Tushar:
Yeah. So um so your question is that uh that you know um hiding should be a wise decision and uh if you are hiring then be very vice about it and have a strict, you don’t know your numbers well and uh so you know, I’ll give you an example of snap deal in India.

The number one into e commerce companies have been amazon and flip card and flip card was bought by Walmart for $21 billion. Uh Once upon a time flipkart amazon and snap deal, they were competing for the number one slot And Snap deal had 24% share. So you know, it thought that it could outpace flip card and amazon. So they just hired like crazy you know uh from 500 people to 15,000.

And and you know they were seeing the valuation because Softbank was in their capital. And uh and you know having Softbank meant that uh you know as I said, you know you should have the cash from the valuations from the balance sheet. If your P. N. L. Is making, isbleeding the money then you better have uh you know money from the balance sheet. And uh so it made very bad decisions in bought a fintech company for $300 million dollars and four years down the line.

It sold it for $30 million. Uh it recruited 15,000 people. We trained almost 13,000 of them in four years, three years. And uh so and you know so one of my cousins is used to work there and uh so you know generally loss of control over the business. And uh you know, they were not putting money in the quality of the product. So people who used to buy its Nabil, they said so many problems and uh I could just go to snap deal and point out 100 problems. So you know those were the uh mistakes. Those are the mistakes which startups make uh in when they see a flood of money at the end of the day, if you’re not willing on the product side, if you’re not winning in the market, you’re offering is bad.

Uh and you are not able to offer a betteer product than your competitors then you have to um you know, money has to come from somewhere, so if it is not coming from your customers, it has to come from the stock market, it has to come from softbank, so to cash flow again, you know, so so that’s what the point is.

Jeffery:
Oh and that’s good and I agree there’s a there’s a lot of measures especially as you start growing that you have to keep in mind as a startup or as a growth company, how you are balancing out that cash flow.

I think it’s very important and I’m glad that we were able to touch based on that and talk through it because I think a lot of startups again, they don’t always have that understanding of the numbers, they don’t really really thoroughly dive into them.

And I think as the business grows, they get a crash course on finance, they get a crash course on how to manage those and sure the CFO comes in takes over that role, but I so hardly believe that it’s so important for a startup, especially early on that they learn and understand the numbers of their business. They understand what their product or service does and how it’s growing because as they grow, they become further disconnected from the front lines of everything that’s going on in their business in order to build that strategy. They really need to really understand that product, understand how the solution works, understand their customers, understand their finance because their marketing, because those are the pieces that when they become more senior and growth in that in that business, they can start to look in and understand what kind of changes they need to in order to make themselves sustainable.

Tushar:
Yeah, so uh so Jeff uh is you’re asking that uh you know uh in the craze of uh early growth, um you should not be blinded by the growth numbers and uh and you know instead uh keep on thinking about uh your cost, your quality, your product, you’re so absolutely right, I would give you an example here um Steve was CEO of Microsoft, uh I forgot his full name, he bought Uh Nokia for $7 billion dollars in Nokia had already lost the market uh to Apple and Android. And uh Steve Ballmer

Jeffery:
Yep, yep. Ballmer.

Tushar:
Yeah and he said I won’t allow my M. S. Office on uh android phones and uh he said I won’t compete in the cloud market with uh amazon — aggressively.

So you know, they were vanity decisions buying Nokia for $7 billion, thinking that the Nokia brand name can fetch you $7 billion. So these are like decisions made by someone who is sitting in a glass house atop a 100 story building. And uh the new Ceo who came in uh, Satya Nadella after he came and he immediately introduced to MS office for android, he said, uh, and he wrote off the entire Nokia by and sold nokia and he aggressively started, he led the marketing team for cloud. And one, Pentagon contract. Um, so what I’m trying to say is that, uh, You know, the startup, um, kind of culture, they, there’s zero mentality, you know, uh, this guy, Amazon’s owner, his building where he works out of its called Day zero and uh, that kind of mentality and not falling, you know, always by being invited by the market and not falling for vanity projects.

Uh, china is a single government country. They’ve fallen for vanity projects all the time. They want to make the biggest, even if that doesn’t make money, even it, even if it is affecting the environment in the longer term. And so you know, so that is again, you know uh I think again having a leadership who has created the company out of their own hands, like steve jobs had to be brought back by Apple.

There have been so you know uh so somebody who’s who understands that it is because of the product that we are sitting at this position, it is because the market like something we offered and not because I am steve jobs, so um so there has to be a lot of uh ground level thinking which has to be kept in mind.

Jeffery:
I love it and Tushar there is uh it’s interesting that you bring up that example because Steve Balmer has beat himself up for years and still does that, that was the worst decision he ever made, I believe, and he’s done that on podcasts and everything.

Yeah, that it was a pretty bad decision and again, if, I don’t know if it came up that it was vanity role, but I’m sure it all played into it in the, as you mentioned, the glasshouse and it’s a great example of, again, doesn’t matter where you go and how high you get, you still have to work with the teams that are in your business and organization And come up with the right solutions and believe in everybody so that you can build up.

And that doesn’t matter if you’re a team of five or a team of 5000. It’s really having a really strong view into your business and where it needs to go.

And that’s what the leadership vision is, is where is this business going to go and what companies I buy or what companies emerge with. And this happens in early-stage companies too, there are opportunities to buy companies. We have one, one company that was looking at a funnel and they wanted to build out a funnel into their business really early stage that we invested in and he ended up buying a small, small product.

And interestingly enough, that small product happens to be today, 60 or 70% of their current revenue and they, but they use that to build up the growth behind their business. So they had to use this funnel to attract people in, which then would allow their function be to start growing. And like I said, right now, that that small purchases made a huge difference in their growth and their business is going to continue to grow their dominating in this small product, while their secondary product is now slowly getting picked up all because of the funnel that they purchased. So it doesn’t matter where you fit into this stream, it’s understanding where you want to go and carving a path to get there. So I think on that side of on that note, I think that’s been some great sharing. So I appreciate that awesome stories and some great direction there for, for companies to think about when they’re growing their business. Um, one thing I kind of want to jump into and you know, it’s uh, I’m going to share one little quick story and then, well, I got a question for you, but in this journey that you’re taking, I like to equate and you mentioned this being in the mountains.

I like to equate this startup journey to being the journey of climbing a mountain. And when you go to climb a mountain, you start off at a base and it’s usually uh in the woods or some forest and you see the mountain in front of you and picture yourself as an early start up.

And this is where you’re at. Well there are a million paths that you can take to get to the base of the mountain. Lots of trails you’re going to take and it doesn’t matter if you stop and gaze and look around. By the time you get to that base of the mountain you could have taken 10 different trails. You’ll be um interacting with other people on that trail, interacting with animals whatever it might be.

But when you get to that base, what’s changed now is that you finally have got your business through that M. V. P. You’ve gone through these stages and now you need to envision what it takes to get to the top of that mountain. Well the difference is is that at the base you’re gonna see three trails because there’s really only three trails that are going to get you up to the top. And as you’re taking one of those trails, you’ll realize that you may have chosen the wrong path or you may have to divert and go back down to go back up on one of the other trails. And by the time you get to the top there might only be one way to the top. And those are the things that you have to go through as a visionary and as a person building a company. But just remember that there’s a lot of things that are going to tackle you at the base of the mountain. And as you get better and stronger, they will find themselves down as you slowly build up that mountain. And uh, you know, the people that get to the top of that mountain or the businesses that gets the top, they’re the ones that put the right strategy and the right plan and the right financing and built the right team to get there to support them all the way up. So just something to keep in mind throughout this whole cashflow idea is that there’s a million things that will hit you, but you’ll keep refining it as you go.

Tushar:
Yeah, so your analogy of comparing the startup, don’t even the climbing of the mountain You don’t see in three, but uh initially, and as you go along probably will see one and the journey is still a long journey. Uh Yeah, you know, I’m a mountain guy, you know, I’m a small city guy and uh you know and uh people who climb Everest uh some of them actually don’t make it through uh make it through life also.

So um so you know, but this isn’t right and ah and uh you know and it’s a years long journey, you know one of the guys who owns a small fund, He is a three times Ironman and I was so enamored by this guy said he must have put in three years, four years to become uh but you know uh it’s just the drive to uh you know one life, the philosophy of one life and a zero.

So and you don’t keep at it, keep at it and uh you know, I I just uh whenever I see SpaceX and I see the size of those rockets and I see a long passing by videos and I imagine that how would you have felt seeing those rockets going up and it’s mind-boggling the rush of blood and uh but at the same time it’s a finance game. It’s a market dynamics game. So you have to be sane, you have to be rooted love your family, come back home, have a good food and enjoy nature, you know, so, so that’s where the mountain comes and uh, you are absolutely right. It’s like climbing a mountain and mountains are beautiful. So the journey does not have to be painful.The journey can be taking one step at a time having the company of right people recruiting the right people and uh that’s how it should be.

Jeffery:
I love it. And as you mentioned, you know, even climbing Everest, it’s not one person. There’s a lot of people that help you get that far. So it’s a big team effort. The two members.

Tushar:
Yeah. For every one person who clients to have rest, there are good cause Nepali Gurkhas who would have climbed 45 times, helping others climate and uh they just do it uh as a matter of duty towards life actually. Uh so, so you know, you are absolutely right, Jeff, it’s about climbing the Everest actually. I love it. Okay, we’re going to transition into and we’re gonna do a real quick story here. Um if you have worked with or you can think of um kind of this heartfelt story of startup that you’ve worked with or you know, in that early stage or growth that really blew your mind on what kind of really it showed you what it takes to be an entrepreneur.

So what they did to climb that mountain. And I’m just curious if you have any stories that you know, you can reflect on or share about a company that you know of and you know the name names but of a company that just, you know, she or he went all the way to the top and they were able to do something that just blow your mind and you didn’t think they were, they were going to make it, you thought they ran out of gas and they were just able to turn it on and maybe through Covid that allowed them to really escalate their business or, you know, there’s always the reverse stories, but just looking for something that helps people really understand what it takes to be an early stage company.

Tushar:
Yeah. So you’re asking me any one example of someone who toiled through and uh, also pays a lot of hardships and made it in the end. I will give you the example of Sharon Harvey Vembu. He’s the founder of Zoho. And Zoho has never raised a single penny from any investor in this entire journey. And it’s a unicorn. And the good part about him, you know, Jeff, he, whichever villages he came from, he has built officers. He has taught those people how to write software. Uh, and you know, they are so committed to him because he developed an entire community back where he came from. He gave it back in the true sense and uh, and you know, maintaining a billion-dollar company and still happy customers.

Um you know, it calls for a lot of devotion. He must be working like you like 20 hours a day. And uh, and I’m sure, you know, so this year the government of India gave him the third-highest civilian award, the Padma Bhushan. And it’s a big thing, businessmen don’t really don’t get such awards. And in India, so I was really happy, you know, I was like uh that, you know, this man, um, he just came from a very small family, no money.

And he did it education and he came back built these villages and offices around them and he crossed the unicorn status. And now he’s in the technological advisory committee of the government. So I think of him and I feel that, uh, this is the guy, you know, I would advise a lot of people to be.

Jeffery:
Sounds like a pretty, pretty famous and pretty amazing person given back to humanity. That’s pretty cool.

Tushar:
Yeah, absolutely. And, um, you know, uh, remember them to do the jobs and make a living. So, you know, the best part you can give anybody is to make them educated. And, uh, so that’s what I like about it.

Jeffery:
I agree with that. I agree. Okay, we’re going to transition into our rapid fire questions. So first question, how did you get started in investing in startups?

Tushar:
I got started because I, uh, my father really wanted to open an education business and uh, he was offering me the initial money support and I had already completed my studies.

And that’s how, you know, the first investment happened in an education company. And the success of that early in my life taught me the value of creating something which people are adopting, which customers are liking and that high. It just, uh, you know, I, I could never forget.

Jeffery:
I like it. What’s your favorite part of investing?

Tushar:
The favorite part is, uh, seeing the startup founders thinking that raising equity funding and talking to investors is a science. And, uh, and you know, they read so much and they see so much of news and you know, uh, it’s like, uh, you know, you have to really calm them down, cool them down, tell them, take it easy. You know, How much have you learned? You can really learn more. So that’s where the favorite part, you know, talking to start up founders and industries.

JefferyL
I like it. How many companies do you invest in per year?

Tushar:
1. 1. I’m a very reluctant investor. I invest in 1 per year.

Jeffery:
Okay, perfect. Any verticals you like to focus on?

Tushar:
I really love Fintech, but having said that the top three in India and Fintech have already come.

So uh they have the valuations, they have millions with them. So um so you know, so like it’s very, becomes very difficult to find a fintech company and believing that it can keep on raising millions to compete with the top three. So that’s the challenge out here. Yeah.

Jeffery:
Is there any due diligence requirements you look for before making a commitment?

Tushar:
Yeah. Being in India there are three basic due diligence apart from the accounting side, which any company would do it. I really uh you know I have some agencies with me who go to the city of the founder and uh talk to the customer and also do a little bit of research on the background of the founder and talk to the, you know — I personally somehow meet distributors and customers and understand the product from them as to how fast it is selling via they’re not ordering a lot for their warehouses and so you know, I do that kind of a thing. It just gives me a lot of confidence and it makes me more confident about the money, I put in.

Jeffery:
I like it. Ah And then any things that really kind of top the investment like that you get behind that you really like to see is that the team, is that the ceo like the product is there something that stands out that gets you to cross the line and say you know what I’m in?

Tushar:
So sometimes Jeff what happens is I learned it from you the other day that the team is first and product is second.

So sometimes what happens is you’re sitting with the founder hiding uh you just want to keep on talking about their business. And uh that is the first hint to me that these guys have answers to everything. So if you have told them three negative things about their company uh they would give you a good answer to that. Then they have thought it too. And you know and it’s like the other person telling you you have it under control.

So, so that’s what I love, you know, and uh, and you know, again, it matters with your perception of founder first.

Jeffery:
Okay. I like that. Do you like to lead rounds?

Tushar:
Sorry, I didn’t get you there.

Jeffery:
Do you like to lead rounds? Like be the lead investor?

Tushar:
Um, That’s a very tough one. You know, i it’s not easy to lead rounds because you are actually, uh, lending your name, uh, to an investment round. And you know, 90% of the investors, need, uh, they tell you that get a term sheet and we’ll come. nd, uh, so, so, you know, I’m not very sure about leading rounds, although I’ve done it once. I don’t ask me whether I regretted it or not.

Jeffery:
I like it. I love leading around because I have convictions if I’m in, I’m in. So I want to make sure that we get the success of pushing forward. But you know, sometimes it’s uh sometimes it’s better to get a lot of people to come in and we can do that after. But I think like anything, you just gotta push it forward and make it happen. Because someone is always waiting for someone else to make it happen. And I don’t like waiting for other people takes too long. But that’s how we work. Everybody is a little different, right?

Tushar:
I really compliment you for that, Jeff.

Jeffery:
Appreciate it. Do you have preferred terms? Like, do you like prep shares? Common shares? Uh Safe. So are there certain terms that you like to go for when you make an investment?

Tushar:
I would ideally like like to do a prep share. But where I am totally convinced I stayed over. Take it could be I don’t take any chance.

What the valuation might be later on.

Jeffery:
Okay. And you take board seats?

Tushar:
No, no, I don’t take board seats. I take an observer’s seat on the board.

Jeffery:
Perfect. Well, at least you’re part of the board. That’s what matters. So you still get at least it all you want.

Tushar:
Yeah, that’s very important.

Jeffery:
Okay, before I get to the next question, can you explain to the audience what board observer seat is just so that people understand because I believe it’s kind of a newish term that people don’t understand so much outside of taking a board role.

What aboard observer role does for them and why it’s a benefit to start up. But it’s also benefit to you and your investors.

Tushar:
Both Observer is someone who knows get higher happening in the board of directors. You know, it’s not only about the minutes of meeting.

Uh, he personally sees whatever happened. Who spoke what, um, near the decision making is helping, uh, and what are the facts coming from, uh, company being presented with the board. And what was, what is the board hiding? So, uh, so that’s sort of the role of an observer is.

Jeffery:
So the great thing with the observer role is that they don’t, it’s not a fiduciary responsibility.
It’s not tied in like a board of directors is, and because you’re sitting on the outside, you can still offer an opinion, you can still share information, but at the end you’re there just to see how everybody is coordinating and what’s going on in the business. So it still allows you to participate, um, similar to a board of directors, but without the fiduciary responsibilities. So it’s still a significant role and it still allows you to participate without having the accountability side of of someone that signed on the dotted line.

Tushar:
Very well said, Jeff.I wish I had your words.

Jeffery:
I uh well it’s for me it’s it’s pretty powerful. We we uh we try to get these types of things and companies to because we feel that just like you being able to be sitting there on the outside and looking in and being able to offer that help is just as valuable as being signed on the dotted line and working inside the inside of the business. So I think it carries a lot of value. And and start ups need to understand these things because a lot of them don’t tend to go in that direction and they should open up a lot more because that help is what’s going to help them grow.

So kudos to you for for doing that and taking those rules. I think it’s significant

Tushar:
Much appreciated.

Jeffery:
Yeah. So now we’re gonna kind of go into the personal side questions.

Tushar:
So, what do you mean? You never told me that?

Jeffery:
Oh, these are this, this is the fun part. I was warming you up, warming you up to these.

Tushar:
All right.

Jeffery:
First question, What is your favorite sports team?

Tushar:
My favorite sports team. Uh, it has to be the one where Michael Jordan used to play for Chicago

Jeffery:
The bulls Chicago Bulls..

Tushar:
I saw this guy and, you know, he just has that confidence that he will do it at the last moment, you know, and uh, and, you know, I’ve seen a lot of cricket and soccer and uh, cricket is not so much there in the US and Canada, but, you know, there was a point where if I compared sports facilities across sports and then I could, if you were not two names that, you know, they are the real sportsmen. And uh, and that’s that’s the, you know, Chicago bulls, I think. Uh, that’s that’s amazing.

Jeffery:
All right. We’ll take it. Um All right. What is your favorite movie? And what character would you play in it?

Tushar:
You will laugh at it. You know, if I tell you what’s my favorite movie, it’s “As Good As It Gets”, the movie is called it. As good as it gets as good as it gets. Yeah. And uh, and, uh, you know, there was the role of this, uh, psychotic guy who, you know, count steps every time and counts the number of plates and, You know, and it was like, I couldn’t take my eyes off.

And you know, I just I must have watched it like 30 times.

JefferyL
All right. I’m going to watch this movie because I don’t know if I’ve seen this one yet. As good as it gets. All right. I’m looking it up. Okay. What is your what is your one superpower?

Tushar:
My superpower is. I don’t know why I have this thing. I’m really good at helping. And you know, sometimes I will just keep on talking to some new client and keep on guiding him do this, do that here.

It is not benefiting me. And I’m you know, I’m I’m taking time from my office, but I don’t know. I have this thing why I do it. I don’t know why, but it’s been since uh since childhood. And uh and you know, sometimes uh when I was starting my business in 2014, um I was really told by a lot of close people that you spend a lot of time helping just put more time in the business. And uh so I had a little bit cut down this thing. Uh, it’s something which comes naturally to me.

Jeffery:
That’s good, strong empathy then that’s good towards people. I love it. And I’m going to take a question, which today will be the inaugural question. This will be the first time I’ve asked this question and it actually came from our conversation the other day because I was that intrigued by the question and I figured I should try and ask you the question because you kind of asked it to me, but what is the secret sauce to your to early-stage investing? One thing that you would say is the secret sauce to your early stage investing.

Tushar:
You know, there’s this guy who did his aviation engineering from Moscow, he came back to India because one of the big businessmen in Moscow at the others, they said you set up a aviation can’t be here in India.

When I met him uh this guy can reach a minister without spending a rupee because he’s a hustler. You know, so this world hustle, I’ve seen a real hustlers, you know, he would just do something and managed to make it happen and you know these are, I don’t like the aviation academy business frankly, But if I had the money they were asking which was too much $2.1 million dollars um probably I would have put it on this one line and you know he’s he just and you know later on he told me he went and saw aurora borealis. He went to the coldest city in Russia or coming up on and uh this is the guy I want as a CEO if you are running a $5 million aviation bur like aero planes you have to service the airplanes they might fall down and uh, so you know, I really love those guys uh and uh, you know, who make it happen and no matter what.

Jeffery:
I like it. So it’s the hustle, it’s making it happen.

Tushar:
He wanted to meet the Aviation minister of India who was known to be a high flyer who had bought 200 airplanes for the government air company uh fight the aerospace company.

So one guy gave him an assurance. Then the thing didn’t happen. He just went to the village of the constituency in the political consequences of aviation Minister, met the party guy, came back to Delhi and made the minister. So amazing man.
Jeffery:
I love it. I love it. Right? I think that, that hopefully not everybody will have the same answer, but I have a feeling that everybody’s secret sauce will be the hustle, but you’re right, It makes a big difference in, uh, you know, we work on all of these things that we share that start up, founders should do X, Y, Z, or they should be driven all this stuff. But I think at the end of the day, you’re just looking to see how much this person can hustle and how they can get to where they need to be and how clever they can be to get there.

And I think that’s what you’re investing in, your investing in the person that won’t take no. And they’re going to find out how to get the yes and they’re going to take whatever it goes to get around that corner, to get on that corner, climb that mountain to get there. So I wholeheartedly believe that that could be the secret sauce to everything. But I love it. That’s great. Well, thank you very much for all your time today. You’ve been fantastic. I’ve learned a lot. I took lots of notes as I always do an a big fan.

So I appreciate that you’ve shared a lot of great insights today and uh, the way we like to end this show is we like to give you the last word. So anything that you want to share to the community investors or startups, we give you the last word. But then thank you again for all your time and sharing today.

Tushar:
Jeff, I would like to thank you so much. It’s my third interaction with you every time. It’s been so smooth. You are a really friendly life and you are, you know, you actually do what you think and uh, enjoy it very openly. You know, you are a very natural guy. So, um, so I really love it. I hope for more interactions and uh, thank you for calling me today as well. And, uh, you know, before closing, I can just say to start up founders listen to less of media and talk to more of relevant people in your business.

And, uh, and because, you know, if you start up on google, there is so much of data, there is, there is so much to read and you can be affected by a million views and forget to talk to the right person. And uh, and that’s so, you know, like people say mentor and all occupying government, er, or whatever, but does go and talk to the right people. So this is my advice to the aspiring founders out there and uh, also to investors, uh, be a little less on your glasshouses and go out there and talk to youngsters. You know, you learn a lot.

Jeffery:
I love it. Great advice again to, sorry, you’re a good man. Thank you very much for everything you shared today. Great job.

Tushar:
My pleasure, Jeff.

Jeffery:
Okay. That was a great, great uh, discussion with Tushar from Delhi, shared some great insights on the finance side. On the Fintech side. You really can’t go wrong with that. Um, really share the difference between, you know, revenue and cost side and how to, to really balance out the P and L. But understand what you’re selling and how you go out for the market. So, uh, program that I love the secret sauce about the hustle and he’s so true on that. So, thank you very much everybody for joining. Please like share comment. And we’re excited to get into the next, the next interview. But thank you for joining us today.