Jason Mah

Friday rant time. Investors don't take risks. Everyone wants Tier-1 background.  Nobody is out there for the little guy. Sharing a brief breakdown of VC economics (deep dive link in comments). VC is NOT charity, it's pure financial services. The NUMBER ONE metric we're measured by (for older funds) is DPI, fancy term for how much money you've given back. 1x, shut shop and go home. 2x, better, but still bad. 3x, now you have a reason to live. (for folks wondering how young funds are measured, it's typically MOIC + IRR, basically, how are companies you've invested in performing at present). Assume a ₹200 crore seed stage fund. Needs to give back ₹600 crore at least. Ignoring fees and expenses, you can invest ₹10 crore in 20 companies, for 10% each. Since it's quite clear (Fractal, Zomato, BlueStone, Nykaa) that it takes 12-14 years to IPO a startup in India, you can't wait that long (fund life is 10 years). So you have to exit to Series C/D investors who WILL want a discount. Assume 3 rounds of dilution, leaves you with ~5%, 20% discount, so 4% held. Seed has ~75% mortality rate, so 5 companies left. These 5 have to get you ₹600 crore. At 4% held: 1 company needs to raise at ₹15000 - Just NOT happening 2 companies raise at ₹7500 - Still VERY unlikely 3 companies raise at ₹5000 - Closer 4 companies raise at ₹3750 - Possible 5 companies raise at ₹3000 - More possible ^This is also the price Minimalist was acquired by HUL, which was an OUTLIER outcome and first of it's kind for consumer startups. The above should illustrate how hard the business is. Hence when funds insist on backing folks with successful exits, strong corporate careers, or absent both, just a great educational background, is maximizing luck. At Seed, there are two things that swing it for you. I call it Numbers & Story. If you have a GREAT story (I sold my last company for ₹500 crores), you can have ~no numbers. If you have a good story (I was VP Google India), once again, numbers are lower priority. If you're 22, from a small town college, breaking it down harshly, you NEED numbers. As an investor, we just DON'T ignore amazing growth. That being said, since this is a (very hard) financial business, we're looking at any and every indicator of possible success. Experience here helps in two ways: - Have already made dumb mistakes on OTHER peoples money - Have a network who will pick up the phone and help you/become first customer #venturecapital #startups #funding

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2009: The financial crisis had crushed fundraising. Barely any new capital went into venture funds. Yet the vintages from those years went on to deliver some of the strongest returns in history. Fast forward to today (2024/2025): Venture capital fundraising is at its lowest point in more than a decade. What does that mean? - ⁠Less money will be available to startups over the next years - The bar for raising capital goes up again: quality matters - ⁠Entry valuations will reset to saner levels --> Funds raised now are likely to outperform, just as history shows The paradox of venture: the best time to commit capital is exactly when most people hesitate. Investors (Limited Partners) should lean in now, not when the next boom makes it easy.

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How do you start a VC fund in Australia? Short answer: don't do it. And that's not my selfish self speaking to have less competition :P It's predominantly cause most people will want to do it for the money. Unless you have some very rich friends, you won't make a lot of money for a good ~5 years. The way to do it: 👉 unreasonably crazy obsession with founders 👉 you got money to sustain you for a few years 👉 you truly want to do this for the rest of your life (if unsuccessful you go into painful zombie mode) (if successful there's no easy way out for a very long time) Assuming that's you >> How? 1. Thesis - how are you different? Access, Selection, Help 2. Pitch - lock in a cornerstone who won't waver 3. Legal docs - get them on the way, depending how confident you feel you can do it in parallel 4. FundOps - put your processes in place 5. Invest - the fun part 6. Report - the less fun part Do it for a very long time. The Long Answer: 1️⃣ Pre-Launch (6–12 months before fundraising) Define investment thesis (stage, geography, sector, ticket size). Model fund economics (target size, management fee, carry, GP commit). Choose structure: Limited Partnership with GP + Management Company + apply for VCLP/ESVCLP tax status (for tax benefits). Line up service providers: Legal Fund admin Auditor Compliance consultant (AFSL pathway) 2️⃣ Phase 2: Regulatory & Legal Setup Management company incorporated (earns management fee + carry). Fund partnership registered with ASIC. VCLP/ESVCLP application lodged. AFSL strategy decided: Apply for own AFSL (takes 6–9 months), or Appoint responsible entity / authorised rep under a third party’s AFSL. Draft fund docs: Limited Partnership Agreement (LPA) Information Memorandum (IM) / Private Placement Memo (PPM) Subscription Agreement Compliance manual & policies 3️⃣ Fundraising (6–18 months) Anchor LPs secured (ideally 20–30% of fund target). Pitch materials prepared (deck + IM + fund model). Soft commitments collected before first close. First close once you have enough, final close can be ~18 months later 4️⃣ Fund Operations (post-first close) Capital calls process in place Bank accounts & custody arrangements set up. Portfolio company support framework ready (network, mentors, LP intros). Quarterly LP reports template & cadence locked. Annual audit and ASIC filings schedule. ESVCLP/VCLP compliance monitoring ongoing. 5️⃣ Deployment & Management Investment committee formally established. First deals sourced and approved. Post-investment support systems (mentorship, board seats, reporting). Track fund KPIs (TVPI, DPI, IRR). Regular LP updates 6️⃣ Long-Term (Years 5–10) Second/third close if not fully raised at first close. Portfolio reviews & write-ups annually. Fund II preparation begins once Fund I ~70% deployed. ~~~ ~~~ ~~~ ~~~ What is this? NOT financial advice! Day 29/30 - I'm posting one VC fund insight per day this month.

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