Where SilverX Finds Deals and Adds Value
Research-led sourcing, partner networks and the investor-in-residence approach to value creation beyond capital.
By Nishaanth Rangan
The Indian entrepreneurial pursuit is accelerating. The ecosystem is no longer an infant. The country is putting forward a compelling period of convergence in regulation, infrastructure, talent, capital and tacit knowledge. As a capital partner, finding an interesting startup is no longer the hard part. And just like every other industry, when access is commoditized, capability becomes the principal metric.
I want to establish that both, “Where does SilverX find deals from?” and “Where do we add value?” are pointed towards our non-disruptible thesis and the investor-in-residence approach. What we value is where we look and that creates an inherent filter while classifying what is a “deal” for our investors, as opposed to another startup.
Strong, continuous and collaborative research work is our first step. You cannot source deals without being opinionated and selective. And we continuously stress test, append, adjust these opinions and this is our first line of defence.
The non-disruptible thesis is a product of our lessons from Fund-I, strong sectoral research work, knowledge sharing with our ecosystem partners, investors and portfolio founders. Now with the primary filter in place, sourcing deals is a more conscious effort.
Sourcing channels:
Research labs & Incubation centers - sit at the crossroads of innovation, capital and regulation. Last month we spoke about the importance of tacit knowledge that these institutions bring and what we look for in research partnerships. Our investor-in-residence approach gives us access to selective thought leaders and innovators.
Deeply entrenched partner networks - The industry will always run on a “I know a guy who knows a guy” model and we strongly believe forming deep, high cadence relationships with participants - investors, accelerators, investment bankers, professors, advisors will have the highest payoff in the long run.
Research led outsourcing - Our periodic research reports bring to attention what we are looking for in the market. Just like a startup, we keep pursuing cold outreaches, introductions in segments that excite us the most.
Incoming pipeline - The other side of the table where we appreciate startup founders, Investment bankers, ecosystem enablers and accelerators who reach out to us with an interesting proposition.
Founder networks - Portfolio companies from our fund-I help us refine our thesis, bring attention to avenues they are interested in and introduce us to founders regularly. Conviction compounds.
Where does SilverX add value?
Part of the evaluation process and portfolio construction will be focused on value creation beyond capital support for the founders. A good deal becomes a good portfolio company as we explore synergies and identify areas of support and collaboration. We take this seriously from day 0 - before we fund an opportunity.
SilverX, inline with Silverneedle will help portfolio companies along the following lines:
Corporate strategy - Market research, positioning, cap table and deal structuring etc. Many of our founders will be more engineering, foundational science centric professionals with strong domain knowledge, industry connections and might often require assistance in positioning and strategy. SilverX brings an extensive mentor pool with partners and team members dedicating office hours to understand and assist in all aspects of the trade.
Pricing, Market access, Fundraises - Assistance in product strategies, pricing and opening doors through investor base and extended ecosystem partners for business development, larger fundraises etc.
Hiring and Organisation structure - Assistance in identifying and hiring the right personnel as portfolio companies undergo the growth journey. Capable of bringing in talent across product, legal, finance, ops and governance as and when requested by our portfolio founders.
Access to cloud, compute and beyond. Getting founders the core tech they need, from cloud and compute credits to reliable, affordable vendors, along with support on applications for grants, programmes and regulatory approvals.
“Investor-in-residence”Most important of all, portfolio founders will have continuous access to the partners, SilverX team and advisors. The whole investor-in-residence approach is centered around improving touchpoints, continuously engaging and identifying areas of support and collaboration. SilverX will be part of the growth journey, not just a facilitator in between.
Venture investments are not passive by nature - an investor on the cap table, alongside founders actively work towards a common goal. Exactly why we bring in value creation questions before participating, to understand whether we can incrementally add value beyond capital infusion into a venture. Only then, a good deal evolves into a great exit.