-Supal Shah, CEO at ARCON Container.
Team 100X interviewed some of the top investors across the globe about their venture investing journeys, startups, and India.Here,Supal Shah, CEO at ARCON Container, shares his responses.
- What is your motivation to be in venture investing business
- You get an opportunity to meet young and experienced entrepreneurs who dared to think differently and challenge the status quo of the industry.
- Startup as an asset class in India is still at an early stage and I see a huge upside in the years to come. So, may be a return on startups may beat all other asset class in next 5 to 7 years.
- Describe your workday and leisure day, how does it look like
Monday to Friday – I only work.
Saturday and Sunday – Generally I spend time with family or friends or going out for leisure. Normally my weekends are also for my research or reading books etc. I am a Rotarian so weekend normally I attend my club projects.
- What is your view on the future of India as a market
India is reaping the benefit of strong leadership at the Central Government and various reforms which this government has started since 2014. Lot will depend upon our ability to scale up our infrastructure. So far I am very bullish as India is laying foundation for long term and sustainable growth as story is just started. Next 20 to 25 years will belongs to India and Indians because – Young educated Demography, Excellent Digital literacy and most important Democracy. These 3 Ds’ will be a game changer for India.
- Help describe your investment thesis and ideas you would like to back
- Experienced and credit worthy promoters who has a clarity about their product and services and problems what they are solving
- Rational approach between growth and marketing spending. I hate companies or promoters who over spent on marketing to push sales and when they pull back their marketing expenditure, their sales fall. This is not a sustainable business model
- Ability of the promoter to remain capitalise. In India so far promoters are underestimating the importance of required capital. It is important for a company to remain capitalised for 18 to 24 months which will remove worry of the promoter to execute his business plan.
- Inviting good investors on board who can back promoters when they need more capital.
- Scalability of the business. I generally prefer to invest for those businesses where TAM is clearly definable.
- Favourable government policies
- Overall growth of the industry. If industry itself is growing then chances of success are more
- Clear path to become sustainable profit, at the end of the tunnel startups need to stop burning and need to achieve positive PAT as otherwise there is no fun to remain in the business.
- Ability of the promoter to retain key team members.
- I also like to back young promoter at idea stage as chances of failure are big but if any thesis become successful then chances of exponential returns are equally high.
- Generally I like those startups who are building strong brands or assets/IP as tomorrow atleast there is an opportunity for bigger players to acquire them and there is an opportunity for investor to recover partial investment
- What are your 5 key learnings from your experience as a venture investor
- Don’t see start up investment as a quick return asset class. Keep a passion and back your thesis or idea or promoters.
- Don’t invest in any startups as big fish are investing. Do your own research. Meet promoters, understand their view point, check financials, make few cold calls in the market to check their product or customer services etc and then take a decision.
- Don’t put all egg into one basket. Look startup as one of the asset class and diversify between different startup in the different industry and also at different stages of their life cycle
- Review MIS of each startups and attend review call atleast half yearly. Ask for their audited financials every year
- If you are getting an exit then atleast make a partial exist. Don’t be too greedy.
- Mention top 5 consumer/industry/technology trends in India and globally
EV, Renewable Energy, Fintech, AI/ML and AR and VR, Data Analytics, Space tourism and Defence, Edutech and Medical tech.
- Top 5 advice you would give to startup founder.
- Rome was not built overnight. Back your idea and keep some patience before your business start growing.
- Don’t run after top line only. Finally, it will be the bottom line which matter. You just can’t burning cash forever as beyond a point your business will become unsustainable
- Have a strong management team. In fact have ESOP pool is must in any startup
- Have a strong investors on board, who can back your idea with more capital if required.
- Have a strong corporate governance and very clear and correct communications with your investors.
- How do you support your portfolio companies
My expertise is EXIM Logistics. Generally I do connect with promoter in case they need any assistance for any logistics matter whether in India or overseas.
- Which of your portfolio company you are very excited about and why
- Bluesmart – this is one of my favourite as they are indeed solving a big pain of Indian cab industry and that too with EV.
- Tyke – I invested in Tyke in seed funding round. I see a very good potential for this company
- Coffeemug – A very scalable business model addressing pain areas for CXO search for big corporates
- When you started your career what were your ambitions
Dream big, Enjoy your work and when you see yourself into mirror then you should get a smile with confidence. Bottom line follow your passion and remain grounded.
- What inspires you in life and what keeps you awake at night
- My inspiration is my family. What keeps me awake is my dream to grow my business, globally and also to see my children getting best education including investing in their character building.
- Books or Blogs you would like to recommend entrepreneurs
- Five people you meet in heaven
- The power of your subconscious mind
- MK Gandhi, The story of my experiments with truth