Listen: Inventus Capital’s Parag Dhol on why early stage startups remain on investor radars through the current downturn

In just a couple of months, since the world slipped into an indefinite lockdown on account of the Covid-19 pandemic, startups across the world have had to shun priorities such as growth and capital efficiency to focus on sheer survival. It’s no different in India’s technology startup universe where investors and startups alike are trying to work their way through a crisis like never before.

In the latest episode of the TechCircle #CapitalCall podcast series, we caught up with Parag Dhol, managing director at Inventus Capital India to understand how the Bengaluru headquartered firm’s portfolio is coping in the prevailing environment. 

Dhol, one of the country’s most seasoned venture capitalists, spoke about why a crisis of this proportion tests the true mettle of entrepreneurs while investors are forced to be clinical. He also said that early stage companies continued to attract significant interest amidst the crisis. 

Drawing from Newton's law of inertia, Dhol said while it will be difficult for large startups to scale back, smaller ones will find it easier to adapt to the changing times. “Also, smaller companies have higher chances of raising funds because they have not much history behind them,” he said. 

For Inventus, it’s ‘business as usual’ because the firm largely bets on early stage entrepreneurs and stays with them for 6-7 years as they build out the company. Since the firm focuses mostly on entrepreneurs and not markets, the impact of the market volatility on its decision making is not as high as other elements, he added.

The firm marked the final close of its third fund -- Inventus - III -- at Rs 369 crore in October last year. India is led by general partners Dhol, Rutvik Doshi and Samir Kumar.