Hi folks,
I'm Kashish, the CEO of EquityList and Founder of Cloud Capital which I run as a solo GP. A little bit about what we do:
EquityList is a full-stack equity management platform by AngelList India. Companies across India, US and Singapore use EquityList to manage their cap table, stock options (ESOP/SAR), shareholders, and related compliances. Managing equity for 10k+ stakeholders, 250+ companies and ~$1B in stock options.
Cloud Capital has deployed $8M+ in 55+ startups such as Airmeet, Rupifi, Orange Health, DevRev, ZET (OneCode) and others. I've also angel invested in startups such as OSlash, Atlys, Chronicle, Even Healthcare and others.
Excited to do this AMA, and look forward to answering any of your questions about ESOPs, cap table management, investing, entrepreneurship, and more!
LinkedIn: https://www.linkedin.com/in/kashisharma
Oh wow, an open AMA. Have a few questions.
How would you like employees to think about their ESOPs? Perhaps, highlight some insights for those coming from MNCs.
How do you think about investing personal funds? How has this thinking evolved for you, early 20s to right now?
Tell us about your first job. Was it instrumental for you in embarking on your current journey?
Hey salt :)
As Naval says - you’re not going to get rich renting out your time. You must own equity - a piece of a business - to gain your financial freedom.
I was terrible at investing my money when I started working. I started off with the usual safer bets ie - PPF, but over the time after dabbling with multiple asset classes, realised that hyper-active personal money management is not for me. You have to truly understand what works for you - can you actively pick stocks, assess mutual funds, or trust a relatively de-risked index fund? Personally, knowing that I set aside a good chunk of my earnings in investments in a disciplined fashion is good enough for me.
100%! I joined an early-stage startup, SquadStack (now Series B, when I joined they must have just raised their pre-seed round). Got a chance to do multiple things - sales, operations, account management, product scoping etc. Loved it. Many of my Cloud Cap LPs or even founders were people that I had known since my SquadStack days. I had a college startup before as well + some online ventures during school days, so I always knew that I loved the startup ecosystem action - gave me clarity early-on.
This is such a GOATed answer. Loved your response. 🚀
The clarity of thought is impeccable. Will forward this to a few nephews and nieces.
Hey Kashish, thanks for this Wanted to know how you got started out with your own fund? What did you do prior to that, and how did you raise money for the fund?
Don't personally have a lot of capital currently, but keen to get their eventually in my career :)
Great questions :)
Raising a typical venture fund off the bat is no small feat and is extremely hard. I decided to dog-food our own product at AngelList India - syndicates.
Syndicates are special purpose vehicles created for a specific investment. So using these, I could raise my target amount from a private cohort of investors, allowing me to pool a larger cheque to invest in the company. Did 9-10 of these in 2020 and raised a smaller hybrid fund in 2021. My LPs were operators from the Indian ecosystem (ie Director at Phonepe, VP at Axios, Founder at ABC startup etc). People who trusted me enough or were at least intrigued by the first few investments I made, so they wanted to hop along for the ride.
In order to raise a fund, you need to have a track-record. You need to show your LPs that you as a GP (general partner) have access to promising founders and can secure allocation in competitive fundraising rounds. Syndicates helped me prove just that.
Do note - investing isn't full-time for me. I am an operator-investor; building business is my full-time role (ie EquityList) and investing in startups has always been on the side.
Thank you so much, really appreciate the deep reply
This is such a logical journey, but would’ve definitely not been an easy one :)
The initial pool of people that trusted you, how did it get built? Was it at SquadStack or while you worked at AngelList?
Hi, thanks for doing this.
I’m planning to do a startup soon:
Stoked for you! Bold bet and I hope you enjoy every bit of building your startup :)
Another easy thumb rule is to offer 1:1, CTC:Options as a package; ie 15Lacs of in-hand and options worth 15 Lacs as well. To your more 'experienced' hires who most likely have a Director-level impact on your startup journey, offering 0.8%-1% of the company via ESOPs is a good way to show them how much you value them.
4 years is standard. At AngelList we have a 6-year vesting policy btw; more here: https://venturehacks.com/6-year-vesting
Use ESOP management platforms like EquityList (http://equitylist.co/), shameless plug :) This is precisely the reason why we are building EquityList - for the lack of transparency and compliant paperwork. ESOPs unfortunately haven't been communicated well enough because most of the founders don't understand them as well (it's not their core-competency). Use a tool which makes it easier for you to manage ESOPs and for the employees to visualise their options, the worth, costs attached etc.
Point 1 is super helpful. 1% for Directors at early stage. And I’m guessing upto 0.5% for more early career professionals.
I’d come across this data cut by Carta, and shared on another post today. I wonder if you have something like this for Indian startups specifically?
Mainly wanted to ask what are the differences between how Indian startups are allotting equity vs. how it works globally?
TIA!
Hey AlphaGrindset :)
We are working on this, give us till the end of this year to share a data-backed report with the ecosystem.
Empirically speaking, the data shared by Carta isn't entirely different from the kind of behavior we are seeing in the Indian ecosystem. I guess it's safe to say that the importance of the first 5 hires in your startup is mostly the same across different geographies.
+1 this could be super helpful if shared for Indian context
Asking with all seriousness, you seem like a guy who is now loaded - to do angel investing etc
When and how did your first big break came?
Loaded is subjective.
I barely invested in the public markets when I started off. I just loved and still do enjoy chatting with founders and feel inspired by all the work people are doing around me. Angel investing was quite organic for me, although, technically speaking, it's not the most safest asset class to invest in! It is highly illiquid, very risky, and has a higher ticket size than other investment classes.
Here's what I did - I did 2 investments through a colleague's syndicate - they very kindly allowed me to invest ~INR 1 Lac each in startups that I was excited about.
I then started to actively build my own deal flow, and came across a startup called Fitso. My friend was raving about their swimming pools in Delhi NCR and I went and checked the facilities out. Loved the user-centric approach that the founders had. Got an existing investor in Fitso to make an introduction with the founder. One thing led to another and I decided to cut ~$150,000 from Cloud Capital, as my maiden investment. My portion of the GP-commit was relatively smaller but pooled capital from my LP (investor) base. Fast forward a year and a few months later, Fitso ended up getting acquired by Zomato and my first investment also became my first profitable exit.
Bottom-line, syndicates are a great way to cut smaller cheques. Venture capital has always been limited and accessible to people with larger cheque books but syndicates allow you to invest relatively smaller and still add value to the startup with whatever experience/network you can lend to the founders.
This is helpful man. How do I get myself into such syndicate based rounds?
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Any news on who is getting it, what's like an average payout for eligible employees? As per the news article, approx 19000 employees are getting it. Anyone has insider info?
Got around 3CR