Targeting Startups Who Want to Grow Fast Without Spending a Lot of Money Capital A believes in working closely with the portfolio companies. There is a huge need for mentoring, information and knowledge sharing, and warning them away from the cash-burn trap because it works predominantly with early-stage ventures.

VC firm Capital A is looking to invest in high-potential startups with plans to scale fast without burning an exponential amount of cash.

"Compared to 2021, investing is now seen through a different lens. Before we take up the time of the founder, the business must first fit into our thesis of climate, fintech, and SaaS. This is followed by other check-ins such as TAM, founder hustle, and regulatory comforts," according to Ankit Kedia, Founder and Lead Investor of Capital A.

The firm plans to invest in a certain number of startups from its USD 30 million fund 1, and once that goal is reached, it will continue to help them grow and exercise its pre-emptive rights. "Early-stage companies that meet our theory and vibe are the ones that appear at the top of our priority list," continued Kedia.

Capital A believes in working closely with the portfolio companies. There is a huge need for mentoring, information and knowledge sharing, and warning them away from the cash-burn trap because it works predominantly with early-stage ventures. "We undertake a bunch of measures to ensure founders stay true to their vision of building their businesses with clear knowledge of cash flows. We regularly engage to understand how we can help them stay frugal with our network capital and yet not compromise on growth. We also encourage good practices like taking advice from external financial advisors who can help our portfolio to build their business plans and a set of trusted bankers to help raise the next rounds of funding," noted Kedia.

As per Kedia, the financial forecast is favourable for the coming year. First off, it is certain that the number of funding agreements will rise later in the year as VCs strive to make significant investments and guarantee growth for their partners and investors. Second, there will be an increased emphasis on startup due diligence, unit economics, and profitability. Investors and startups will now proceed with the revised approach after the majority of the urgently required course correction and market evaluation in terms of valuations has already been completed.

"As a result, we are seeing many new startups succeed in a variety of operational sectors, including fintech, wealthtech, sustainable enterprises, and climate-tech segments like EVs and clean mobility, etc. These are also some of the main industries that we want to invest in," Kedia emphasised.

Stats:

No of Startups Invested in: about 25 (since inception)

Focus Sectors: Climate-tech, Fintech, SaaS, Tech-enabled Enterprise Businesses

Fund Size: Maiden Fund 1 size is USD 30 million (INR 250 crore)