I'm Sajith Pai, Partner at Blume Ventures. Ask me anything!
Hi Grapevine, I'm [Sajith](https://www.linkedin.com/in/sajithpai/), Partner at [Blume Ventures](https://blume.vc/), where I oversee consumer and India B2B investments. I am a long-time media executive turned VC. After a two-decade-long stint in Media & Entertainment, much of it in The Times of India Group, across Strategy & Corp Dev roles, I moved to Blume Ventures in 2018. Outside of work, I like to read, think about, and write on tech, business, culture, and their intersections. I'd love to chat with you folks about my journey from media to VC, my thoughts on startups & venture investing, PMF, amongst other things. Ask me anything. I'll be back at 7 PM to begin answering! :)
Hey Sajith, Great to see you here and very much thanks for doing this.
1. What factors does Blume consider while investing in a Tier 3 College founder with early product traction.
2. For B2B and B2C companies What are the approximate revenue and metrics to be called as an startup eligible for Preseed Funding.
3. Does Blume invest in Indian Startups wanting to serve primarily in U.S Markets whose problem statements also based in U.S Market.
4. How important is founder market fit. If a first time Tier 3 college founder is going to a unrelated sector and has early traction, will Blume fund them ?
5. Does Blume have a plan of starting an Incubator on the lines of YC.
@DarlesChickens
1. Hey, for our fund ($290m) and stage of investing (advanced seed / preSeries A where we invest $2-4m for 12-17%) and our profile, we do get a lot of high quality inbounds, and have access to top tier plays. We dont differentiate between founders on academic pedigree. Corp pedigree and where they worked (high growth startup experience primarily) does matter and to some extent it is tied but not exclusively dependent on acad pedigree. That said, if you are a first time founder we would like to see some significant product love and early market traction. I dont think acad pedigree matters at all.
2. Criteria mentioned on the site. But essentially / realistically if you are referred to us, $250k upwards of annualised rev for B2C plays and at least $100k upwards of ARR for B2B cos.
3. Ideally no....but if it begins in India and then sees a lot of traction from US (ultrahuman for instance) it is fine.
4. Again, acad pedigree doesnt matter, but we like to see some evidence of right to win / founder market fit. Great traction can make up for everything - no acad pedigree, no founder market fit:)
5. No!
a huge opportunity missed for #3. Hope some VCs explore this sooner.
Hey Sajit, I always wanted to understand. Why are most investors more likely to invest into founders from IIT/IIMs v/s from lower tier colleges? Thanks in advance
@PracticalThrust Essentially signals of higher probability of success. I think it is a bit misplaced and i dont give it much importance, but from one angle it makes a bit of sense. IIT/IIM/BITS/ISB are proxies for high opportunity cost (higher pay) and hence starting up means a founder is giving up a higher opp cost, and hence it is a signal that this opportunity is more valuable. YMMV but to me this is the only logical explanation, and perhaps that other downstream investors will give more value to acad pedigree....but i suppose good traction will overcome all that.
DaringTrain
Stealth
6 days ago
Hi @SajithPai! Glad to have you at GV. Enormous respect for your content and the public good you do sharing in-depth reports, thought pieces and podcast transcripts.
Wanted your thoughts on a quick question I had: You consider WHJ as one of your top Anti-portfolio companies and you have said that several times. While I understand the sentiment you have wrt an early investor. It would have made you and Blume millions of dollars (post sale to Byju's). And obviously, Anti-portfolio is an after thought - i.e. If you were to do it all over again, you would go ahead with the investment.
But another fact about WHJ that one shouldn't ignore is the rampant misselling done by the product including the much acclaimed and infamous Wolf Gupta. Several parents (not all of them privileged like the two of us) were scammed(FOMOed? / bullied?) into subscribing for a product that didn't make financial sense for them or educative sense for their kids.
So, while the returns on Sale of WHJ were largely from existing (or new) investors of Byju's, they were also from hard earned money of naive parents who went beyond their means to provide good quality education to their kids and fulfil a dream that was just a marketing gimmick and never existed in the first place.
With this context, would you still want to go back in time and invest in WHJ? And would you still consider it at the top of your Anti-portfolio?
Disclaimer: I have nothing but respect for Karan Bajaj in his past life as an acclaimed author and media person)
@DaringTrain Great Q! This is something i have thought abt, and my team members have asked me too. No easy answers here.
It is true that my regret / antirportfolio misery was a bit mitigated by WHJ's later challenges.
I do feel that experience of passing because of a mistaken low TAM taught me a lot....and hence i consider it my antiportfolio but i feel less guilt / regrets with passing months given what happened.
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Hi Sajith,
Blume Ventures is a dream for many. Here's a simple question:
How do you know when a portfolio company is underperforming? Founders can sometimes hide the truth, and with a large portfolio, it's not feasible to check on every startup and consumer personally.
@ebuHatela We see it from the MIS and one thing i always tell my founders is that there is no pressure on them to grow / crank up rev for the sake of it. We do look for high quality rev - rev growth w good retention and good unit econ - and do not encourage growth sans retention / repeats / good contribution margins etc. I never stress only 1 metric (like rev); i always push for a check metric on the north star metric which is a quality metric. Early days it is rev + engagement / retention usually.
What you are saying is true and it does scare me a bit as to a mojocare or gomechanic situation in my portfolio. So far havent had and i do encourage my founders to not worry abt growth for the sake of it or do short-term things. Ultimately it is their co, and i am only a temporary but long-term steward of the co.
Hey Sajith,
Really great to meet you
Your portfolio consists of Edtech startups, but unfortunately we have seen a lot of poor outcomes here.
Had two questions:
1) What spaces within Edtech still make you bullish about it's future?
2) How do we as an ecosystem avoid another Byju's situation?
Thanks in advance :)
@AlphaGrindset Classplus, Virohan, Uolo and Leverage are all doing well for us. But yes, edtech has been a tough space. I like skilling, super early education (ideally w some daycare linkage), English-learning leveraging AI, adult lifelong learning (as we all seek to live longer and work longer) etc.
Re Byju's ya, what to say, so much has been said abt it ha ha. I suppose (early) investors need to push back on governance early when they see signs of founders not paying attention to it is one way....but perhaps there are other factors at play as well here.
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Hey Sajith
@salt here. the og grapeviner.
Need your most candid response to this query:
What’s the criterion for being seriously considered for a startup idea? How hard do you index on pedigree; (undergrad/masters + workexp)?
@salt I have talked abt the pedigree aspect (not at all) above so wont dwell on it. I invest in idea stage usually for second-time founders / L1s from high growth startups. Otherwise happy to pay up for traction. Founder-market fit / right to win and past experience as founder / elite operator is the criteria i use for funding startup ideas.
Umadbro
Stealth
6 days ago
Do you think it’s a high integrity act when VCs build up companies from their own portfolio as great/exciting companies without disclosing they have a vested interest? How do you think these interests be disclosed while pumping/promoting the said startups?
(Not saying you do it, just in general)
@Umadbro hmmm....i think whenever a VC mentions a co you can take it for granted that there is a vested interest / portfolio co. Just the nature of comms. Maybe this is a signal for me to praise / highlight / talk abt non portcos more!
Hey Sajith, do you agree with the following statement?
"When you have PMF, you'll know it for sure. If you are in doubt, you don't have PMF"
@MT_Ego Hmmm....i think there is some truth to this, but not always true. You can have crazy growth with retention and weaker unit econ and mistake it for PMF.
Hey @SajithPai thanks for doung this.
- What advice would you give to a startup in the early stages of fundraising especially when they haven’t fully achieved PMF yet?
- what are the most common mistakes startups make when pitching to VC and how to avoid them?
- what are the earliest signs you look to determine whether a company has achieved or is in the verge of achieving PMF?
Have three questions:
1. How would you evaluate a startup like Grapevine: pre-revenue+some arbitrary monthly burn+extreme user love? How do you evaluate price discovery mechanisms for valuing such a company?
2. Do you think that Grapevine has an edge over other incumbents in the space to garner more mind share? If yes, what are your thoughts on Grapevine and have you heard about the app from your latent social circle (trying to understand its reach)?
3. Do you look at other funds and wonder what made them invest in a company? Does that bring a sense of FOMO on certain hot investments?
Hey Sajith, thrilled to have you here :)
As someone who writes about tech, business, and culture, how do you think cultural contexts influence startup success in India?
@OfficialKing I think the success or potential success of plays like STAGE, FRND, SriMandir are all testament to the importance of culture. They also reflect in product features like COD (low trust economy) etc.
jinyang
Stealth
6 days ago
Hi Sajith, lucky to have interacted multiple times with you - welcome to Grapevine!
For the audience here, can you share the inspiration behind the Indus Valley Report and how it has evolved since its inception? What has been the most rewarding aspect of authoring a report that has become such an anticipated fixture in the Indian startup ecosystem?
One of my favourite reports out there ❤️
@jinyang Thank you! I had read the Mary Meeker reports and thought there was a space for a similar report from India, interpreting India to the world. I thought the report could not only help provide a true picture of India, warts and all, in all its nuanced glory, to the world, but could also market Blume to the wider world. The most rewarding aspect has been how it is slowly growing to be a leading reference point for India non-tech abt the tech / startup world (heard from a WSJ journalist that an Indian minister pointed him to the Indus Valley Report!). Long way to go, and lots of pressure to keep making it better every year!
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Hi Sajith great to have you here.
Do you have any guidance on how to get started as an associate/analyst in the VC space for people who want to work in this space?
Would love to hear your thoughts.
@Sam_altman My article Breaking into VC - https://www.linkedin.com/pulse/breaking-vc-rough-guide-sajith-pai-rzb7c - gives you context and colour into how VCs recruit early career professionals, and a playbook to enhance your profile. Do read it. It will answer a lot of your questions!
Royalflush
Stealth
6 days ago
Hey Sajith,
I'm a founder working in the consumer tech space. Great respect for Blume's reports and have liked the people I have interacted with at the fund.
We have gone through the Edtech, SaaS, AI cycles in the last few years. Do you feel consumer tech is making a come back? In all my VC interactions, I can sense less excitement about the sector. Is this true for blume?
@Royalflush Yup. Some great ideas suddenly emerging in the last few months (consumer tech, gaming etc), one of which we are funding. I really like how UPI Autopay and microtransactions enabled via UPI is providing a new unlock. We have been really surprised by India2 users willingness to pay for content, online experiences, connections and virtual products. I am bullish on this space - some of the startups doing well here - Astrotalk, EloElo, Crafto, SriMandir, STAGE, FRND etc.
Hi Sajith!
Thanks for doing this. I’ve had opportunity to meet you. And found our interaction insightful.
What’s your take on recent hot topic founder mode vs manager mode? Do you feel founder mode companies end up doing better in long run? When should a founder hang their boot and pass on the baton to executives?
@WryExile38 I agree that founder mode companies do better but then founders need to be fully on. Also not everything in a co needs the founder micromanaging. If there is then there is something wrong. Of course, the founder should 'micromanage' (if needed) and focus on extremely high leverage areas, but outside of that s/he should bring in competent folks and leave them to it. Re yr last Q, it is something i have wondered. I can name at least 10 companies (wont name them here!) where the founder could move on and the co would do better. In the US, it is not uncommon for founders to bring in senior execs to run the co (Affinity and Front are two recent examples of ~$100m ARR cos getting in elite operators to run the co). We will start seeing it in India hopefully (and it hopefully will be more willing than unwilling).
Hey Sajith, good to meet you. I work as an analyst at a VC fund.
What do you feel about the position of analysts/associates? Often, we meet with founders within our first year, and are perceived as just 'hurdles' to cross. For a long enough time, I also questioned if I add any value at all in any conversations.
What is your thought on how this works, and any advice for somebody who is ~25 and in VC?
@TastyTensor9 What you say is kinda true. I do think you should see the 30 or 45min interaction with the founder as a product and try to ship a good product - at the end of the 30/45min session, is the founder better off for having spoken to you because s/he got a benchmark data or feedback? If not then they are right in seeing you as a hurdle. A lot of founders tell me privately that analysts just gather data and dont provide any meaningful feedback or value add. I think it is tough for a 25 yr old to provide insights or strategic value add, but you can provide cross-sectional data like is their CAC high or low given the numerous pitches you have seen etc. I do think once you start shipping a better 30min product session, you will see less reluctance from founders.
Hey Sajith, you had an unconventional path before joining venture capital. How did your transition to VC happen and what is your biggest (or two) lessons from your career?
@HSRDays Oh i was lucky. Had worked w Karthik in '09-11 in Times before he started Blume and we stayed in touch. I have covered it here - https://sajithpai.com/reflections-on-one-year-in-venture-capital/
Biggest one or two lessons: 1) Samir Jain, who i was Chief of Staff to, and my intellectual guru for a long time, gave me a distinct way of looking at the world and data. It was also a very profitable co that did a few high-leverage things right. 2) Understand how large and small orgs work - i worked across Times Music, Economic Times, Times Now, Brand Capital, Times Group COO's Office, Bennett University, New Products across my 18 yrs. Some of these were large teams, and there were 3 intrapreneurial stints. That diversity of exposure to people and sectors, and org sizes was a great learning experience!
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What qualities do you look for in founding teams, and how do these qualities influence your investment decisions?
@WiseData2 I like founders who have known each other for a long time, and have complementary skills. I like founders with strong right to win / domain knowledge / founder market fit, or have spent a lot of time on the problem discovery. I like founders who have some experience in high growth startups. That said Team is only 1 aspect. TEM (Total Expandable Market) is another - how big is the problem space? Then Tech - how differentiated / innovative / effective is it, and finally Traction. These are the 4 Ts that matter. If you like Ps, then People, Problem, Product and Performance:)
StridentPublishing
Student
6 days ago
For folks who want to join a VC fund having some entrepreneurial experience and maybe a degree or two, what’s the best way? @SajithPai
@StridentPublishing My article Breaking into VC - https://www.linkedin.com/pulse/breaking-vc-rough-guide-sajith-pai-rzb7c - gives you context and colour into how VCs recruit early career professionals, and a playbook to enhance your profile. Do read it. It will answer a lot of your questions! If you have any specific Qs, reply back.
good to have you here sajith :)
blume emphasizes a market-thesis-driven investment approach. how do you balance the need for high-conviction investments with the inherent risks, especially in emerging sectors like ai and climate tech?
@FrostyBirdwatcher My colleague and Partner Arpit leads our efforts in the climate tech and deep tech space. He takes a lot more risky bets than i do. I am more the market-thesis opportunity guy ha ha; that said a lot of the thesis / bluprints we do are to open a dialogue w founders building in the space. A lot of times, we are led by founder conviction and their understanding of the market. So i would say it is balanced by the fact that we know we stake out a point of view w the thesis but dont go by it blindly in picking a startup / founder to work with.
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