LV Insights

LV Operator’s Studio | The mushrooming of micro-funds

In our most recent Operator’s Studio session, we had “Mr. Private Equity” walk us through his experiences working with multiple startups in the US, and deliberate on the challenges which he felt were universal regardless of geography or industry and how COVID-19 had resulted in a unanticipated surge within the Micro-funds industry. 

As the Global Head of Oracle NetSuite, Rahul Puri deals with multiple global Private Equity and Venture Capital firms and builds a focus around how they can work with various high-growth companies from the pre-revenue stage all the way through to the high-growth-billion-dollar-income phase! 

First off – the #COVID19 impact. The general opinion is that it has caused a major economic collapse, but according to Rahul, the growth and opportunities that the last 6 months of the pandemic have presented are unparalleled and could not have been conceived or realised in the last 10 years! He expects big startups to emerge from this period of financial down-turn – like PayPal escaping the Dot-Com bust or AirBnB coming out of the financial crisis of 2009-10. 

On the subject of the mushrooming of micro VC funds in the Valley, Rahul believes this trend is a result of many founders having seen good exits over the past few years and circling back that capital into startups. “Investing in a company at an earlier phase is cheaper and can bring in larger return multiples,” says Puri.

He goes on to say, “From a data perspective, in the last one year, I think there have been about 17 new micro-funds with $10 million or less come up in India. So if we look at the early stage micro-funds, I think that number is going to double in the next year or so.”

Rahul also gives more clarity on the challenges faced by venture-backed companies and shares anecdotes on how the better use of systems and processes have helped founders alleviate such risks.

Watch the full session here:


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