Entrepreneurs can take several years to scale and get on the path to profitability. So it’s important to stick with them for the long term, said Namita Thapar, chief executive officer of Emcure Pharmaceuticals and Shark Tank India judge. She added that startups are a small part of her portfolio, but expects their share to be larger as she becomes more optimistic about the performance of her startups. In an interview, Thapar explained why she expects Pune to play an even bigger role as a startup hub in the coming years. Season 2 of Shark Tank India will stream on Sony Liv from January 2. Edited excerpts:
What is the percentage of startups in your overall portfolio?
Startups are now a very small part of my portfolio. However, I can increase my holdings if my portfolio is doing well. About half of the companies in my portfolio are in various stages of funding in the next round.
Any success stories from season 1 of Shark Tank India?
My personal investment in Rare Planet is the biggest success story of season 1. When they touted in season 1, they were in four stores with $Sales of 70 thousand per month. Since then, their size has increased 8 times in number of stores (currently 32 stores) and their sales have increased 6 times, at $4 million per month. This business proves that social impact and profitability can coexist.
For the rest of your portfolio, how do you allocate money between assets – equity, debt, etc.?
A significant portion of my allocation is for equity, with debt making up about 10% of my overall portfolio. I am a value investor with a long-term outlook on my equity investments.
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How do you monitor your portfolio companies? How often do you interact with them?
I wouldn’t call it oversight because I believe in empowering founders and letting them know that I’m here to support them when they need it. Having said that, I try to arrange meetings with the founders if I am going to the city where they are or if the founders are going to Pune and I am there too. I have a team that regularly connects with founders, receives quarterly updates, and helps them with marketing, finance, distribution, recruiting, and fundraising.
What is a typical exit time frame for you? How long have you been with an invested company?
I am one long way once I have invested. It takes several years for an entrepreneur to scale and hit the road to profitability. I believe in staying with my founders for the long haul and helping them succeed.
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Do you try to diversify across sectors or choose companies that are close to your own line of business?
I follow the 4F investment framework – Founder, Foundation, Financials and Fit. I have detailed these concepts in my book ‘Dolphins and Sharks’. As long as a company fits this framework, I invest in them no matter what industry they are in. However, I am especially excited to see the health care pitches and pitches of female entrepreneurs.
How much time do you have to evaluate a pitch before it is presented to you in the program?
Not available. We don’t know anything about the previous companies. After the founders walk in the door, we make a decision in an hour on average. This is, of course, a structured due diligence process.
Once you’ve made an offer, do you ever back down?
Most transactions go through. The only ones that didn’t succeed were the ones the team discovered something about during due diligence, helping to highlight aspects of the business that weren’t apparent in the initial pitch. . Also, many times founders want to pursue deals that come to them after the show airs, when their business is valued significantly more than our offer on the show.
What is the IRR (internal rate of return) on your startup investments over the past 5-10 years? How does this compare to your other investments?
It’s too early to calculate the IRR. So can’t comment.
How do you see Pune’s role as a startup hub?
Pune has been home to a number of unicorns with three of them — FirstCry, XpressBees and GlobalBees — founded by my friend Supam Maheshwari, whom I interviewed in my book ‘Dolphins and Sharks’. This momentum for startups will only grow in Pune due to easy access to good talent, the presence of high-quality R&D infrastructure, and the availability of an ecosystem of mentors and advisors. good nursery.
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