How Did You Get Here: Making Investors Succeed in Venture Capital

There are two main stakeholders for a Venture Capital Fund. Most of the time, founders are in the limelight. However, many people don’t realise the importance of Limited Partners - LPs, or Investors - in the success and long-term sustainability of a VC fund, and may not understand how the right LP relationships and engagement allow VCs to take risks, innovate and make an exponential impact. 

Today, I speak with Mudita Narsaria who is a part of the Investor Success team at Blume Ventures.

Mudita gives us an up-close and personal account of how she chose Investor Relations as a career, what she had to learn along the way, and some of her insights on what it takes to be a strong Investor Success professional working in the world of VC - it's not all fancy meetings and pitch presentations! In a little over a year, Mudita has been able to get a sharp pulse on what investors are looking for, how VC firms can provide the best experience for them to make an educated and informed investment decision, and how this role works within the matrix of a VC fund and holds some critical data and value for the team.

Ria: 

Mudita, thanks so much for doing this. Very excited to speak to you and shed light on a really critical function for one of the two most important stakeholders that a venture capital firm has, the Limited Partners, or LPs. I would love to have you share where your career began, what sort of things did you do, and what decisions you made that got you along this path.

Mudita:

Thank you for having me Ria. I’m very excited to get started with this conversation and reflect on the past five years that I've been in this space. 

My career began right out of college, almost by accident. I graduated with a degree in BSc. Finance, a relatively new course. You can think of it like a generalized and broad based BBA degree, but with a focus on Finance. Whereas a BBA student would choose a marketing or finance specialisation in their year 3, this course focussed on finance specialization all through the three years. I wasn't very pleased with the placement opportunities that came on campus and hence decided to take matters into my hands. 

I knew that I didn't want to immediately study again. I felt like I needed to do something to help me identify what it is that I wanted to do in the long run. So, I started the arduous process of looking for a job myself. To be honest, it was quite challenging - as a “fresher” looking for their first job, I found myself applying for entry-level positions where the criteria to apply ended up being having atleast 1-2 years of experience, which was challenging.

Ria:

So how did you navigate that?

Mudita:

I started sending cold emails to a whole bunch of folks. I obviously had to have a filter in place - I couldn't just reach out randomly to everyone. Because of the nature of my degree, I gained exposure to a wide variety of topics, including alternative investments (think: private equity and venture capital) and valuations. This was also the time when India’s start-up ecosystem was booming and there was a lot of enthusiasm and exuberance in all parts of the start-up ecosystem.

This prompted me to narrow down my interest to the world of start-ups, private equity, and venture capital. I went on to make my own mini database of possible firms and started writing to the relevant stakeholders in each which then eventually led me towards an internship at a private equity firm. 

The offer on hand was to start off as an intern in their investor relations vertical - and upon learning the broad areas that the role would entail, I was excited to take this up. To me, the role felt like a perfect intersection between finance, marketing, and sales. 

Now that I look back, the cold emailing strategy that I adopted while starting my job search was eerily similar to the kind of work I found myself doing in year 3/4 of my career - I took a very similar approach to establish a foothold in a new category of LPs. 

Ria:

So what was your first reaction to the world of investor relations? How did you understand it when you started? 

Mudita:

I think a lot of people don't understand what Investor Relations means in the context of the PE/VC ecosystem. Traditionally, if you ask someone what they think IR is, they think of it in the context of a listed company - working on quarterly disclosures, annual reports, and other information that is put out in the public domain. I realised very quickly that in this context, it's obviously not true. There's a lot more that you're doing - reporting is just one part of it. 

Ria:

And that's also why people tend to think of IR as a part of the finance team. Just doing the reports and reporting out. But it's so much more than that and I think it's a very complimentary yet parallel track. 

Mudita:

A hundred percent. There are overlaps with finance for sure. Ultimately, the IR function acts as a bridge between assimilating all the information across all internal functions at a firm and presenting it in the best possible way for existing and prospective LPs. 

In order for us to do this effectively, it involves a fair bit of strategising: we're not just taking information and resources from one place and sending it out as is to the other. Slicing and dicing quantitative and qualitative information to cater to the specific profile of the investor - while making sure we are not overwhelming or underwhelming the end consumer - more on this later.

Hence, over time, my perception of the role definitely changed. The initial perception and misconception that the bulk of the work would involve making reports and broad client servicing were cleared up very soon.

It’s a big disservice to the term if you think that all you're going to be doing is replying to emails and making sure queries are being answered. Of course, it’s part of the job and we need to make sure that we have the right systems and processes to make sure that our investors are getting access to what they need in a timely manner. But it's definitely a WHOLE lot more than that once you fathom what all IR does, and what IR can do given the function’s unique vantage point. 

Ria:

What was the vision that you understood from Blume that it had for its LPs and its investors and what was exciting about that for you when you were exploring roles and this opportunity came your way? 

Mudita: 

When Blume came my way, I was fairly comfortable with where I had reached in terms of developing my knowledge and comfort in this space. So I knew I was in a good position to evaluate what career progression a role at Blume could offer me and could better gauge the opportunity. It was a shift for me in terms of the industry, moving from private equity to venture capital and there were a lot of nuances in terms of how IR would be different, the scale and stage of companies, the profile and volume of investors. 

What was most exciting for me, I would say, is that IR as a vertical didn't formally exist at Blume when I was being interviewed. The realisation that the function had grown to a point where the Firm had to hunker down and formally set this up as a vertical to enable long-term success for all stakeholders, and the opportunity for me to play an active participant in molding the function in a way that makes sense was the most exciting part of this opportunity for me. I was able to come in at a point where I could use what I've learned over the past 4 years and see how that fits well in this narrative and what we can do from here to change the narrative, instead of simply saying, “Hey, here's a playbook, this is what you have to do.” 

Ria:

It's now been over a year and a half. What do you feel like you've been able to do well and what do you still feel like you haven't been able to get to? 

Mudita:

Venture Capital and Private Equity is a very long-term business - you need to wait for a while to be able to see the results of your work play out, so a year or two actually means nothing in the overall scheme of things and goes by much sooner than you realise.

Specifically on IR, the work requires a lot of context. For example, at Blume, we have four core funds which translate to more than a decade's worth of information on the firm’s history, evolution, and portfolio companies amongst other things. Naturally, there is a lot of information that you need to be on top of before you start getting comfortable with anything. So no matter if a person has ten years of experience in IR or two, in my view, if they were to take up a new role anywhere, it would take them at least six, seven months at best to just get comfortable. 

If I were to break down my first year, I would say more than 50% of the time was just spent on getting a lay of the land and understanding everything that happened before. Only once you reach that point where you start getting comfortable, you can start thinking about, “Okay fine, now what's working, what's not? What do we change, what do we focus more on?” When we're pitching to someone, all we have is our track record and past performance to speak for itself - how the investment philosophy has changed, what are the learnings that we have from Fund One that make Fund Four so different. Only once you sit in on enough meetings, once you've done your fair share of homework, do you realise that you're in a position to actually understand what's happening. And then step two would be to give your take on these things. 

Ria:

That's a very interesting take also on L&D (Learning and Development), right? Your learning started first with the role and then moved to the industry. I’m curious, how do you feel that has changed since you moved here? I think you've been on calls with some LPs pitching the funds being the first point of contact for them. What have been your learnings from the LP calls that you've been on? What did you learn from some of the questions that they've asked, like how has the investor sentiment towards Blume or towards early-stage venture in India changed? Because you've also been speaking not just domestic but global LPs also. Tell us about your learning that’s happened through the calls you sit in on.

Mudita:

I think it's really made me truly appreciate how long-term the business really is. The fact that there have been LPs who have stayed in touch with us for years as we’ve tried to convert them is incredible. When I first joined Blume, we were in the last stages of raising capital for Fund IV. There were calls and meetings where we were trying to get people over the finish line, and through those interactions I learned that there were many instances where certain LPs had been kept engaged by the leadership over multiple years. It’s about finding the right balance between patience and persistence and taking a hard look to see what it will take to get them over the line. You need to empathize and understand their areas of concern and work alongside them to bridge the gap. Also, you can't over-commit for the sake of it - you really shouldn’t be making a promise which you then can't fulfill. 

Ria:

Yeah, sometimes you have to be comfortable just saying no at the risk of losing them.

Mudita:

Exactly. And I think that is something that in my mind was definitely a big learning for me. I had imagined earlier that while raising capital, you have to be very aggressive all the time. Yes, you have to be aggressive and do what it takes to get them to a ‘yes’, but you can't compromise on your ethics and value systems. So it's okay to say no, and not everyone understands this aspect. 

Balancing aggression with patience and persistence can also be a tricky situation to navigate -  you can't have a call with a large prospective institutional LP every 1-2 months. What are you going to tell them? What key updates do you have to deliver in that short time span? What is the value that they can derive from spending that 30-60 minutes on the call with you? You wait it out, and go to them when there is actually something to say. This thought process needs to be championed by the leadership and it ends up paying off in the long run - I've heard on numerous calls and meetings that just the fact that we've been able to be patient has paid off because maybe there was something five years back that prevented someone from committing to Blume. Now that's not the case anymore, and they’re ready. The only reason they are able to get to this position is that we have stuck around through the years, understood their internal challenges and then ultimately helped solve their concerns and get their vote of confidence by standing by, and showing them that we’re here for them. 

Another thing that people really like about us is how much we leverage the team. For example, once a particular thesis report or a long-form article on the journey of a portfolio is released, we invest the time and effort to showcase these to the relevant stakeholders. These efforts act as strong votes of confidence in our favour. Not many people realise and recognize how much of a team effort this is. You need to be able to look at what's going on in the entire firm and see what you can use to add value to LPs. We then step in to orchestrate that.

These are small things that people remember. They’re more likely to reach out to bounce off ideas on an investment opportunity. These initiatives have a compounding effect and end up adding value to the whole process and I think ultimately help convert a relationship from a single fund relationship to one that will last over multiple fund cycles. Even though you can’t quantify this or measure the impact it has, these small things really do end up playing a big part, and that’s been my biggest learning. 

Ria:

This is interesting because I think you're talking about the fact that a big part of this function also involves education and awareness raising, which is not what is normally seen. That's where a lot of our content like the Indus Valley report or the primers that we put out come in. You’re saying that one of the main responsibilities of this function is educating them on the right places to allocate that as well - it’s not just about taking someone’s money. I think that's a huge responsibility also in a place like a VC firm, where the majority of the team is focused on the founder and there's a smaller group of you, your team and a few of the partners who are looking at LPs. 

How does that dynamic play out sometimes? You mentioned that you are pulling more from other resources in the team and asking them for content  - but how do you feel that dynamic has played out in terms of how do people look at the IR function at Blume? How do you explain your work? Do you sometimes feel like people don't get the whole scope of what you're doing? Do people not fully realise everything that goes behind it? How has that played out? 

Mudita:

I actually want to tie this in with one of the earlier questions that you asked, about what it is that Investor Relations is doing for Blume that people don't realise. As the industry is maturing and Indian funds are getting bigger and better and consequently being evaluated by world-class LPs, the need for Investor Relations to be 100 percent focused as an independent vertical (as opposed to the historical crossover and resource sharing between IR and Finance teams) becomes critical. At Blume, we've rebranded Investor Relations to Investor Success since we feel like the latter better embodies what we've set out to do. Our objective is to be the frontline function for all constituents of capital in the fund's journey. There are a few things that aren’t always easily visible to others. 

Firstly, we act as a bridge between the Partners, Investment Team, Finance Team and of course, Investors. Our interactions with LPs put us in a position where we are the ones who have our ears closest to the ground and hence find ourselves at the receiving end of feedback - on our fund, on the firm, and on the industry. Many LPs are investors in peer Indian funds, so they automatically compare us to the others and you do end up hearing constructive criticism as well as feedback on things that are going well, and sometimes maybe not too well. Certain institutional LPs have their own onward reporting requirements that we need to cater to, which again, they can compare against other funds because they could have say, ten funds in their portfolio and we are one of them. Should we change a particular process? Should we change the timeline associated with the particular process? Should we increase the depth of the information we are giving out? And this list goes on. This is something that we are doing constantly but is probably not very “visible”.

The second important thing we do is manage expectations. To ensure continuity, we have to set realistic expectations that we can maintain quarter on quarter. If we are unable to commit to a particular task, it is never due to lack of intent - we are dependent on a lot of factors (external and internal).

Thirdly, an aspect that isn’t visible upfront is the Investor Relations team’s role as the gatekeeper of a huge volume of confidential data. Maintaining confidentiality is key. When a firm is actively fundraising, energies are high. The temptation to say yes to an LP request to close a deal may arise, but that’s where we also have to have our guards up a bit. These things are never closed until the document is signed. Many LPs do not like their names being made public, and rightly so. We have to be careful to not just slip things into conversations. We are gatekeepers of information encompassing everything from learnings from prior funds, to the latest details on a company’s recently closed round and captables, to the valuation policy being adopted while reporting fund performance, to even more confidential matters that are slated to be discussed with the Firm’s advisory board and beyond. Given the nature of the role and the scope of work involved, we have access to these but must respect the privilege that comes along with this.

Ria:

Yes, you become the single source of truth.

Mudita:

Exactly - the single source of truth on all information which is extremely dynamic. Conventionally, people would not expect an IR function to play such a vital role in this area.

Lastly, I think people don’t realise that we are always representing the brand. Our interactions begin very, very, early on with prospective LPs. This could be as early as just shadowing a call with the partners and stepping in when an institutional LP needs access to our data room. We do all this while not knowing what the eventual outcome will be. And even then, it's an eight to ten-year journey, on average. But each interaction, whether it’s answering a routine query and interacting with someone in the LP’s team, or something a bit more nuanced - we are always representing the firm because all communication is routed through us. You realise quickly that any impression you make on the investor is ultimately being fed up the value chain. So we need to maintain the same standards and integrity with every individual. Every touchpoint is important, and every touchpoint ends up creating a lasting impression that will ultimately reflect on the firm at large. 

Ria:

That is really helpful, and I think you uncovered my reason for asking this question. Because there's so much that goes on consolidating, distilling, getting information in, figuring out what to put out. It's not just execution, there's a lot of strategy behind that. I'd love to just take a step back and go a little bit more into understanding why you're happy doing this role and I would love to hear a little bit about you and were some formative moments for you growing up. What do you think helped you figure out your purpose? We say that you can do jobs meaningfully if you find where and how it relates to your values.  So growing up, what were some values that really resonated with you? Stuff that came down through your family, through people you met. What were things that you felt personally were important for you in life and as a person? I would just love to understand a little bit of that. 

Mudita:

Growing up, my family encouraged me to not be too afraid of taking risks. Early on in life, I was quite comfortable with the idea of trying new things and staying away from “mainstream” or “conventional” choices. Even if a particular choice or decision didn’t work out, there would always be learnings and experiences that one can take with them and use these to chart out the next steps. For me, this played a vital role when I decided to focus on IR full time. The role and the function is so niche and evolving, it comes with its own set of challenges - but instead of focusing on the lack of structure and a playbook associated with the space, I was encouraged to view this as a great opportunity to carve my own path in the best way I see fit. 

Ria:

Now that we've understood what the function does, what have been some things that have been successes for the function and personal wins for you?

Mudita:

I think a personal win for me was when after the 6-7 month mark in my journey with Blume, I realised that I had the confidence (and buy-in from the team) to independently represent Blume and started taking on pitch calls to potential investors. 

Another exercise we did recently was talking to a combination of peer funds and large institutional LPs to have an open discussion around best practices, common challenges, and to seek feedback from folks in this line of work. This helped us shape the roadmap for our function and identify some of the things we should be prioritising - whether it's investing in systems and technology or people resources, how should we think about structuring a second layer of our team etc. I don't think earlier I would've felt that this is something we could have pulled off given the confidential nature of the business, but as long as you're having a very free-flowing conversation, you're not sharing anything confidential, there’s absolutely no harm in sharing and learning. Now having spent over a year in this role, I feel like I have been able to develop a good handle on what we’re doing well, some gaps and that has been key in shaping our roadmap for the next 6-12 months. 

Ria:

How do you feel you were set up for success on that? Because I know for us, autonomy and empowerment in the role is very important. I know you work not just with your manager who leads the investor relations vertical, but with a lot of other partners also. What sort of support did you get over there to take these sorts of calls independently? How did you feel you had the firm's backing to do that? 

Mudita:

Most of this has been enabled by shadowing in and sitting in on enough meetings and conversations. That’s been one of the high points at Blume - I was empowered to sit in as an observer and start building my learning curve very early on. I acted as an observer for a long time before I took my first call, and used the process to learn and hone my own style. 

Ria:

That's great to hear. I have two last questions. One is, how do you think you've grown personally since you took this role? Professionally and personally.

Mudita:

I would say I've become more confident. I wouldn't put myself in this category five years ago. If you asked me whether I'm an introvert or an extrovert, I would have said, introvert. But the nature of this job doesn't allow you to hang back. At least, it pushes you to break out of that mould and make you realise that you need to be outgoing, you need to be confident to do this job well. If you appear slightly shaky in what you're saying, then that’s not a good sign. You can't expect someone on the other side of the table to have confidence in you and trust you, when you’re not putting your best foot forward.

I think this has helped me personally and professionally, to be comfortable in projecting myself - and hence the firm - in a better light. That confidence comes from two things. One is just experience. You do this enough times, you learn from the whole process. Secondly, having the technical knowledge to back you up because you need to have substance in what you're saying. I remember thinking 3 years back before I did my first ever pitch call, wondering what I would do if I didn’t know the answer to a question. And I realise today, nobody knows the answer to everything. You just need to know how to tackle these types of situations. 

Ria:

I fully agree. I think from when we spoke for your interview, the confidence has come out in you a lot because you’ve set up a function together with your manager. So that knowledge goes a long way in giving you the assurance that you know the answer to this because you found it. These sorts of roles are great for people to get in early on. It's not so much about how many years of experience you have, but what you're willing to do to figure things out and build something. 

My last question is for people who are considering these sorts of roles working in VC, in non-investment roles, maybe IR is one of them. What can someone do to be ready for it? What sort of DNA, what sort of mindset do you think is really important to work in a role like this? 

Mudita:

I've come across a lot of misconceptions that people have when they’re looking at Investor Relations. Firstly, they've glamorised the idea of the role a little too much. People think you're going to be talking “fancy” investors all the time, traveling non stop - that's not the case, especially when you're starting out. It takes a while for you to get comfortable with the product that you are pitching. It takes a while for the firm that you're at, for the leadership to have confidence in you to let you represent the brand.

The only thing that we're marketing and pitching is the fund. So you need to be able to be comfortable with the fund's journey and history. None of this is taught in college. No matter what course you do, you pretty much pick this up on the job. So thinking that you’re going to start pitching in week 1 - that's a big misconception. 

Secondly, people tend to think of IR as a stepping stone and a chance to segue to the investment team. That's not fair to anyone involved because the training and the learning that you're doing in your first year in IR will be very different from that of an analyst in the investment team. 

A person’s mindset considering this role becomes critical - you need to be patient because of how long-term the venture capital industry is. If someone is looking to spend time in a said IR role for a year, they won’t be able to see the results of what they’ve worked on fully play out. 

Launching a fund, for example, takes time. By the time the fund documents are filed, initial marketing starts, fundraise begins and investors start rolling in, it can be a 1-2 year process. When you start seeing all of that actually play out, you have to be in it for the long term. Hence, you can't have that lens of constantly switching roles to get the “next best thing”. I think being patient in this particular role becomes slightly more important than others. Lastly, a person should be humble and be willing to learn - almost everything that I do today was all absorbed by listening and learning on the job. 

So you have to be okay to just sit, put your head down and listen and learn. You have to be okay with asking questions and just shadowing those who know more than you. 

Ria:

Thank you so much for this. While you are a colleague and I see you every day, I think it was great to sit down with you and get your thoughts on both how the function has evolved, how you've evolved and how you see the value of your work at Blume. Thank you for sharing that with us.