This clarifies a lot of the basics. Are you planning on covering more of how vc works? Interested in learning more terminology (term-sheet comes to mind)
The thought did cross my mind. Of covering Terms sheets, different stages of funding, fundraising aspects like lead investors, the different players (angels, syndicates, VCs), etc
I am still not sure how to structure it though. But it sure is in consideration :)
Well written. Didn't feel it like 14mins while reading. Looking forward for the next one. Can you write about Indian VCs and with examples of start ups they have invested, success stories. We had the theory class now, can we ask for real life Indian examples and anecdotes. Most of the blogs mention about US based start-up companies which becomes difficult to relate. I was actually happy to see the mention of OYO and BYJUS in this one. Cheers! More power to you guys
There are very few Indian success stories because exits in India are hard. There are only a handful of notable mentions which can probably be listed in this comment.
Like MakeMyTrip, and Flipkart. Apart from the ones mentioned in the post
Thanks for some brilliant and simple writing. I have one question regarding funding. Why do startups which won't make any profits in forseeable future, attract huge funding? Example: Flipkart, Zomato etc. From what I can understand there doesn't seem to be a feasible exit for a layman.
I explain why Dunzo will make huge losses for few years in the beginning but then become profitable. A lot of these plans are not made public to customers like us but investors know about them and hence they invest.
That said, not all companies are actually successful in converting their future profit plans into a reality. Sometimes, they make mistakes in the execution (Paytm is an example). Sometimes, maybe the plan itself was wrong (Oyo is an example). But it is very difficult to know these beforehand.
Hi Vivek ! It was a great read. Based on this reply, i would be interested to know where Paytm , Oyo faltered .. It would be insightful read i guess. Simply love the way you narrate the plot. Thank you for creating this :)
AnonymousMay 31, 2020Liked by Vivek Raju, Azhar Jafri
Thanks for this. Liked the simplicity of the language ! When I saw that read time is 14 mins, I wondered if I will last that long. Last I did thanks to the lucid explanation. Looking forward to the future articles :)
Wonderful read. Thank you. Could you tell me what software or website you use to make these graphs? They are very neat and a great visual representation. Thanks!
Superb work on your part. Concepts sounded extremely simple and easy. All except in one part which I wasn't able to fully follow was the example you gave regarding the investment of 10 million and why a 10x returns on the same (there, I have exposed my vulnerability towards numbers shamelessly!!)
This clarifies a lot of the basics. Are you planning on covering more of how vc works? Interested in learning more terminology (term-sheet comes to mind)
The thought did cross my mind. Of covering Terms sheets, different stages of funding, fundraising aspects like lead investors, the different players (angels, syndicates, VCs), etc
I am still not sure how to structure it though. But it sure is in consideration :)
Well written. Didn't feel it like 14mins while reading. Looking forward for the next one. Can you write about Indian VCs and with examples of start ups they have invested, success stories. We had the theory class now, can we ask for real life Indian examples and anecdotes. Most of the blogs mention about US based start-up companies which becomes difficult to relate. I was actually happy to see the mention of OYO and BYJUS in this one. Cheers! More power to you guys
There are very few Indian success stories because exits in India are hard. There are only a handful of notable mentions which can probably be listed in this comment.
Like MakeMyTrip, and Flipkart. Apart from the ones mentioned in the post
Thanks for this wonderful article. Why do you say exits are harder in India compared to let's say the USA?
Hi Aditya, we write on Indian startups at https://ajuniorvc.com/
Wonderful. Got the basics! :)
Glad it helped Dibyajit :)
You know I was just searching for something that can summarize VC, and there was this article. Thank you for making a layman's life simpler!
Thanks Neha. Glad you liked it :)
Hi, if Arthur invested $10,000 and got back $8.2 million, how is it a 130% overall return?
Good catch. Typo there. Will change.
Also, it is calculated not on $10K but the entire ($2.5M+$10K). Because that's what Arthur Rock as a fund put in
Oh, all right understood. The articles are great!
Very nicely explained and easily understandable by layman.
Thank you Sir :)
Thanks for some brilliant and simple writing. I have one question regarding funding. Why do startups which won't make any profits in forseeable future, attract huge funding? Example: Flipkart, Zomato etc. From what I can understand there doesn't seem to be a feasible exit for a layman.
Many of the startups that don't seem to be profitable to us on the outside actually have plans in place to be hugely profitable in the future. It's just that a few of these businesses have to make losses for sometime in the beginning to set up the foundation for future profits. You could read this piece for example (https://simplanations.substack.com/p/5-google-dunzo-affair-the-beginning?r=17uuw&utm_campaign=post&utm_medium=web&utm_source=copy)
I explain why Dunzo will make huge losses for few years in the beginning but then become profitable. A lot of these plans are not made public to customers like us but investors know about them and hence they invest.
That said, not all companies are actually successful in converting their future profit plans into a reality. Sometimes, they make mistakes in the execution (Paytm is an example). Sometimes, maybe the plan itself was wrong (Oyo is an example). But it is very difficult to know these beforehand.
Hi Vivek ! It was a great read. Based on this reply, i would be interested to know where Paytm , Oyo faltered .. It would be insightful read i guess. Simply love the way you narrate the plot. Thank you for creating this :)
Thanks for this. Liked the simplicity of the language ! When I saw that read time is 14 mins, I wondered if I will last that long. Last I did thanks to the lucid explanation. Looking forward to the future articles :)
Thanks Ravindra. Glad you liked it :)
Awesome ,very clear.perfectly put in a readers perspective
Thanks Pavan. Glad you liked it :)
Well explained , really an educative and interesting write up
Thanks, glad you liked it :)
Whoa whoa.... Simply simplified... Next round on series of funding please
Thanks Navin. This might take a while but we will surely write.
Very very informative... Cleared the concepts very amazingly..
Very simple yet detailed explanation. Looking forward to the next in this series!
Thanks Rathi!
Wonderful read. Thank you. Could you tell me what software or website you use to make these graphs? They are very neat and a great visual representation. Thanks!
Hi, Thanks! I use Keynote (Apple's version of PowerPoint) for the visuals :)
Ahhhhmazing !
Thanks Akshara. Glad you liked it :)
Hi Vivek
Superb work on your part. Concepts sounded extremely simple and easy. All except in one part which I wasn't able to fully follow was the example you gave regarding the investment of 10 million and why a 10x returns on the same (there, I have exposed my vulnerability towards numbers shamelessly!!)