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- Hi, I am Chetan, CFO at Stellaris Venture Partners where we recently raised $300 million for Fund 3.
- My role is a dynamic blend of handling serious finance, tax, and legal matters while staying engaged and excited every day!
- For anyone looking to join a startup or the VC space, there’s never been a better time. The India opportunity is REAL!
I was meant to be in the VC space!
From a young age, I was fascinated by the stock market, how companies are built, and how founders work to turn their visions into reality.
Becoming a Chartered Accountant felt like the perfect stepping stone for my aspirations.
I pursued my three-year articleship with Guru & Jana in Bangalore, India. My first assignment was conducting financial due diligence for a tech company.
After qualifying as a CA in 2006, I joined KPMG. As luck would have it, I worked with their team that collaborated closely with VCs in Bangalore!
One of my audit clients was Helion Ventures, a $605 million early-to-mid-stage venture fund.
Nats (Natarajan Ranganathan), the CFO at Helion Ventures at the time, was impressed by my expertise.
He said, “Would you like to join our firm as a Senior Finance Manager?” To be honest, I didn’t think twice, I joined.
My six years at Helion were exhilarating and taught me the intricacies of the VC world…But it was just the beginning!
Becoming the CFO of a mega-fund
In 2016, Stellaris Venture Partners, an early-stage, tech-focused venture capital fund was just starting out.
I had known its three Partners Alok Goyal, Rahul Chowdhri, and Ritesh Banglani (Former Partners at Helion) for over 14 years.
They extended an offer for me to join as Vice President of Finance.
I took some time to think through it.
It seemed like a great opportunity to work with ambitious sharp minds. I took it up…And so, a new chapter of my journey began.
Fund 1: In 2017, we launched our maiden fund, raising $75 million.
Fund 2: By 2021, we closed our second fund, securing $225 million.
Fund 3: Our latest milestone closed at an impressive $300 million,
Today we have a total of $650 Mn + assets under management. Some of the prominent startups that we have invested in include, Mamaearth, Credflow, Factors.ai, Nestasia, Zouk, Whatfix, TurnO, Dashtoon and more.
We invest in tech-enabled companies across a range of dynamic sectors, including AI, consumer tech, SaaS, FinTech, sustainability, financial services, B2B commerce, consumer brands, social commerce, education, electric vehicles, healthcare, and more.
Process of raising funds at a VC
It’s similar to how startups go about raising funds.
The entire journey, from start to finish, takes about 6-8 months. It’s a rigorous process.
Reaching out to investors
We engage with both prospective and existing investors.
There is a surge of foreign investors showing keen interest in the Indian market.
So, on one hand, we’re seeing strong inbound interest, and on the other, we are reaching out to large investors. At the end of the day, it is the team and the numbers that do all the talking.
Investor due diligence
Our investors evaluate us similarly to the FDDs (Financial Due Diligence) and Ops DDs (Operational Due Diligence) we conduct for our portfolio companies.
The investors also look for:
- Deal flow
- Competent general partners with a nice track record
- The focus area and growth stage of the startup
- Perform due diligence not just on our numbers but also on our portfolio companies.
- Evaluate our fund structure, tax implications, and overall strategy.
- Review agreements
Managing the fund
The fund is managed by the General Partners – the driving force behind everything we do.
Just as we back founders, investors place their trust in the fund managers or general partners; Alok, Ritesh, and Rahul.
The fund manager is ultimately responsible for,
- Running the fund—defining the investment theme,
- Deciding on target sectors,
- Executing the strategy.
- We make it a priority to stay in constant communication with our investors, keeping them informed and engaged while building strong, lasting relationships.
- It’s all about creating transparency and trust to drive success. These key aspects are discussed and aligned with our investors from the start to ensure we’re all on the same page.
CFO plays a very important role when fundraising?
From a finance and legal point of view, the CFO plays a very important role.
Operations due diligence (Ops DD): Once they do their diligence, they will talk to the CFO and understand what we have been doing, and the valuation processes.
Fund structure and taxation: When investors come on board, the focus shifts to how the fund is structured. Taxation, exit strategies, and other critical details are finalized during negotiations. They want to talk to the CFO and get their input.
Once the fund is raised, the machinery kicks into full gear, and you are working closely with the teams on a day-to-day basis.
It’s a constant flow of responsibilities – from sending quarterly NAVs and meeting audit requirements to addressing ESG needs and more.
My role as CFO is exciting, to say the least. One minute, I could be handling urgent queries from the investment team, jumping onto a call to discuss a deal, and immediately having to make high-level decisions on the spot.
Each morning, I wake up with a sense of anticipation, not knowing exactly what the day will bring.
How the VC space in India has evolved
The VC landscape has evolved drastically since my days at Helion.
Increased deal flow: Since we began, the deal flow has grown at least 4x, with more opportunities emerging across sectors.
Founder quality: Founders with high calibre have emerged, with repeat entrepreneurs leading the charge.
Evolving ecosystem: Take Flipkart for example; when they started, it wasn’t just about building a consumer app. They had to create the entire ecosystem—from payment gateways to logistics.
Fast forward to today, and much of this startup infrastructure is already in place. With third-party providers handling logistics and payment gateways running smoothly.
The government is also stepping up its support to further help this ecosystem.
With advancements in AI and technology, India is quickly becoming the ideal place to build and scale companies.
Also read: How this CA became part of the investment team at a VC firm
Advice to finance professionals looking to join a VC fund or a startup?
Career opportunities, supply and demand constraints!
When a firm is looking to hire for its finance team at any level, finding ready-made talent is constrained. Similarly, those in VC firms looking to explore new opportunities face limited demand as well.
However, as we discussed earlier, opportunities are opening up. We’re seeing a rise in VC firms, both domestic and international, which is promising. The future looks bright, and the opportunities are there.
If someone wants to become a CFO at a VC firm or even a startup, here’s what I would advise:
Get your hands dirty
- From logistics to business processes, finance professionals of CFOs should actively engage and contribute to various areas within the company.
- Don’t just sit back. Get your hands dirty and work with different teams.
Have a long-term mindset
- The fund life is typically 10 years, and investments often have an average holding period of 6 to 8 years.
- If you stay with the firm for a long time, you’ll be rewarded monetarily. There are also equivalents to ESOPs in VC firms, much like in operating companies.
It is okay to Be cynical
- The investment team is usually very optimistic, which is necessary. The CFO is the one who asks the tough questions; “What if this goes wrong?”
- And then everyone says – Why again!
- But CFO’s role is complementary to the investment team’s optimism. You have to raise red flags when needed and ensure that all bases are covered.
You need to dig deep into everything you do.
For instance, when conducting FDDs (Financial Due Diligence) for a startup, you need to address issues from a regulatory and business standpoint and of course make quick, informed decisions on how to resolve them.
Also read: Considering a Career in a VC Firm? Demands unwavering commitment and relentless hard work.
Wrapping up…
India is experiencing 6-8% GDP growth, with a young, tech-savvy population and affordable, high-quality bandwidth.
The India opportunity is REAL!
Chartered Accountants and finance professionals should look beyond traditional finance roles.
Opportunities abound in operating positions and investment teams.
While picking up a few additional skills might be necessary, CAs have proven to be a great fit outside the finance domain – there are countless examples to draw inspiration from!
