‘VC firms must right size before advising start-ups’

NEW DELHI: Ashneer Grover, co-founder and former managing director of fintech platform BharatPe, has advised venture capital and investment firms to first think about “right-sizing” themselves in the wake of current economic slowdown before telling their portfolio companies and start-ups to do so.

Grover’s hard take on VC firms came as several large investment firms like Sequoia Capital, Lightspeed Venture Partners, Craft Ventures, and Y Combinator etc have sent memos and footnotes to their portfolio companies and startups on how to endure the ongoing crisis.

“It’s ironic that VCs are singing aright sizing’ of portfolio companies in chorus. The fact is VCs firms need to right size their own teams by 80%. I still haven’t figured why you need more than 5 people in a VC firm. If they were tight themselves - portfolio cos won’t be so far off,” tweeted Grover who is also a famous judge on Shark Tank India.

Sequoia recently created a 52-slide deck, first reported by The Information, titled ‘Adapting to Endure’, for the founders of its portfolio companies. “Our intention in gathering today is not to be a beacon of gloom. But we also believe that winning in the years ahead is going to depend on making hard, decisive choices confronting uncomfortable challenges that may have been masked during the exuberance and distortions of free capital over the past two years,” the deck read.

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