India GameChanger recorded an interesting conversation with Ajay Jain, Co-founder and Managing Partner at Silverneedles Ventures. Silverneedles Ventures is a sector-agnostic fund but specially focused on startups in space of deep technology, sustainability & emerging technologies.

Some of the topic Ajay covered:

  • How Ajay Jain was introduced into the semiconductor industry
  • The peaking of the learning curve from working with students from different walks of life
  •  The real question to ask oneself when going through ups and downs
  • The wakeup call if a business idea is not growing in India
  • What Silverneedle Ventures looks for in a company
  • The importance to adapt to the market while sticking to foundation and principles
  • Unique Evolutions to India and new strategies by government to support startups
  • Ajay’s take on India’s future plans to change the game

Other titles we considered for this episode:

  1. Go Find Out What You Really Want
  2. There Is the Pot of Money at the End of the Rainbow
  3. We’ve Grown Leaps and Bounds

This episode was produced by Stephanie Ng.

Read the best-effort transcript below (This technology is still not as good as they say it is…):

Michael Waitze 0:03
Hi, this is Michael Waitze and welcome back to India GameChanger. I love it when the guest is looking at me and smiling. I feel like I need to say something or do something funny but I’m not really sure what that is today. Anyway, today we are joined by Ajay Jain, a Co-founder and Managing Partner at Silverneedle Ventures. It is great to have you here. How are you doing today?

Ajay Jain 0:25
Hey, Michael, thanks for having me here. I’m doing great. Looking forward to this conversation.

Michael Waitze 0:30
Thank you so much for doing it. Before we get into the main part of the conversation. Can I get just a little bit of your background for some context?

Ajay Jain 0:37
Sure, Michael. I come from a large family and the family business was moneylending, pawnbroking. So at a young age of about five or six, I was part of the business we used to, you know, give him money for the articles school article certainly kept right. I think that was the biggest school I ever had and right from yours pie to really one. I was involved in the pond and brought up in haute-savoie and I did my engineering in the electrical space. So well, yeah, I did my masters at University of Arizona Tucson. And that’s where I went into the semiconductor industry, okay, worked with the likes of Intel and AMD working on the next set of processors, multi processors, so called technical person, but the calling has been always to do something on the business side. So did my MBA. This was in 2011. At Indian School of Business, I graduated in marketing and strategy and went into the education space wanted to do something, I guess good for the society. And education and clean tech were the two areas that I was looking at. Had my own startup in the education space. This was more in the affordable private school space. So we raised monies from Michael Susan l foundation and grey matters. Wow. Yeah. So it was part of that for four years moved on to lead. The innovation and incubation at the hub tea hub today is the world’s largest innovation ecosystem. It’s in Hyderabad. Okay. And we were the founding team. So did my stint there for two years. Since then, I’ve been investing into early stage tech companies. So did 25 early stage tech investments in those four years that has been giving us handsome returns, and now have launched Silverneedle Ventures. So that’s kind of the journey.

Michael Waitze 2:43
I got it. I want to get back to that in a second. But first, I want to ask you, what was it like going from India as a youngster? Because even if you’re gonna go get a master’s degree, you’re still not like, you’re not 40? Right? You’re in your 20s? Probably what was it like going from India to Arizona of homilies?

Ajay Jain 3:00
Oh, actually, it was not bad. I first actually landed up in Michigan. That’s Yes, freezing. That was yeah, that was that was my first statement, but couldn’t get the call. Scholarship. So that’s when moved to Arizona got it. And I think Arizona was lovely, at least with a better perspective. It wasn’t bad, comparable to heads over. Yeah. I think the biggest learning and the biggest takeaway for me, was the methodical approach of things in the US. I learned to break down things much better. And that’s when I think the education quality improved a lot more both ways. Do you

Michael Waitze 3:42
feel like having that kind of international experience, no matter where it is right to us is a good place for this obviously, right. But let’s say there was a more methodical approach, it could have been a different approach. But was the idea of just being exposed to something so different in such an intense environment? When you come home? Does it change the way you look at not just your home, but the rest of the world as well.

Ajay Jain 4:02
I totally agree to that. I think diversity is a very important part of a personality. And I learned I learned that I was also a teaching assistant, even to some PhD students. And that was a learning in itself, right? Dealing with various people from different walks of life. And how do you justify to each of them, you know, the assignment marks etc.

Michael Waitze 4:29
But here’s the other thing, too. It’s almost like diversity doesn’t exist until you’re exposed to it right? And like, do you learn I always wonder about this about myself. Like, am I learning more about me when I’m exposed to you? And you can be anybody, right? Not just you, or am I learning more about you? And I think it’s more learning about me. Do you know what I mean?

Ajay Jain 4:47
Yeah, I think that’s a deeper point. And I agree, it’s always learning about yourself when you’re being exposed to various new avenues. In fact, just yesterday, I was having a chat with a good friend on how might be today’s children, at least in the Indian circumstances are not so exposed to newer avenues, they have a very comfortable life. And I guess I guess that’s something that needs to change a bit. But what do you mean

Michael Waitze 5:16
they’re exposed to a more comfortable life? It’s interesting, right? Because I was talking to a guy about this earlier today, India is this super dynamic, kind of very fast, growing, well educated place where the economy is growing nicely, the GDP per capita is growing really well. But just like every country, right? There’s tier one, their tier one places, but then there’s tier two and tier three. But India also benefits from the fact that the mobile penetration is like 200%, or something percent, right. So it changes the way people interact with data and information. But like, how does that impact all of this stuff that you were just talking about?

Ajay Jain 5:49
Well, yeah, so I think you’re right. And I might be talking about the tier one and tier two. Right, versus let’s say, I will leave out the tier three right now. There are around the description. So I think the access to a lot of things for the children has made it extremely good for them. And I think they’re more open to a lot of adventure open to learning in different ways. Yeah, then I was right. But when I talk about the comfort levels, I think they need to be more exposed to newer ways of doing things just might be adventures that are not as well driven. You know, you find something on your own. Yeah. Right. And that’s how I think entrepreneurship is above? And might be, we need that as part of the education itself.

Michael Waitze 6:39
Yeah, I don’t disagree with you at all. There’s a part of me and you know, this right from building your own education company, a private education company, but I feel like we’re kind of at a tipping point where education itself at scale needs to change, you know, when I look at the way that I was educated, and then look at the way my daughter was educated, it wasn’t that different to be fair, and the whole system through that I went through was basically based on how do we educate kids in an agrarian economy? Right? Not how do we educate kids in a modern economy? And like, I just hope that it’s changed. I’m 50, something years old, right. So I don’t interact with the schools on a regular basis. You’re probably closer to that than I am. But I see what you’re saying. Yeah, the way we educate people has to change.

Ajay Jain 7:17
Yeah, yeah. There are delta changes happening, but not large. And I think the education industry by itself is, I mean, has a huge inertia. It changes slowly.

Michael Waitze 7:27
Yeah. But of course, because it’s such a big infrastructure. I want to ask you this, too. When you went away to school, was there an expectation from your family that you would just come back and join the family business? Or did they kind of realise like, this kid wants to build something on his own? And that’s good, right? Because he’s comes from an entrepreneurial family, we’re just gonna let him do his entrepreneurial thing. Like, what is that struggle? Like? Yeah,

Ajay Jain 7:49
sure. That’s an interesting question. My dad was always clear, he has gone through hardship. So all my siblings you help 12 of us would have to get higher education and go their own path. Awesome. So no one comes back into the family business. But I was one of those who was very keen to run it, actually. And that didn’t happen.

Michael Waitze 8:11
But why? But don’t you think it’s kind of cool. That like, you can watch the struggles of your elders, right, your grandparents, your parents, and there’s a part of them, it’s really good, because it can be kind of binary, right? Half the people just be like, I don’t want my kids to struggle like I did. I want them to live a life of ease and, and I’m just gonna bring them into the business, teach them how to do this. And then the next generation will just take care of this. And then the other side is kind of like, you know what, you’re on your own. I gave you everything I possibly could I educated you and I struggled. You will also struggle. Like, I’ll make sure you’re not going to die. But you got to make your own way.

Ajay Jain 8:48
Yeah, yeah. So yeah. And I think I like I like both sides of it for some reason. Yep. But, but I think it also comes back from where you are coming. So humble beginnings might be a Dennard. You want your kid to really grow from there. Yeah. Whereas once you have a much stapler, life might be you can, you know, say, Okay, go find out what you really want.

Michael Waitze 9:13
Fair enough. Yeah, fair enough. So what got you interested in the investing world because it’s really far away from like the family business and kind of far away nominally from engineering. I can make the case later that it’s actually very similar, but I’m curious what got you interested in the investment business.

Ajay Jain 9:31
So actually, it is close to the family business because we were always valuing things against which we lend money, right. So if it is worth $100, we give $70 Right, so that that way, it was always closer and I think the main thing that got me interested in the investment space was growing with that. Second generation, Flan of entrepreneurs, my friends, etc. who were clear that business is the way to grow things? Right? And I think you had two choices, whether you wanted to become a business man yourself or you wanted to invest into businesses. And I chose the second,

Michael Waitze 10:14
is there a reason why you went early stage as opposed to growth? I mean, I can make the case with you that like growth stage investing, and I speak about everything in relative terms, right. So please don’t take this the wrong way. But like early stage, investing is the hardest stage. And you can say, well, Angel, but whatever it is, but that stage before there’s growth is the hardest. So it’s the most risk and the highest return potentially. But is there a reason why you went there? As opposed to we’re just going to go grow stage? Because it’s obvious who’s going to more obvious? Yeah, who’s going?

Ajay Jain 10:42
Yeah, yeah. Interesting question. So these chartered exceed partners at an early stage. So we used to go even when you have an MVP, right, you do not have revenues, we used to invest in them. Right? With Silverneedle, since I’m taking more public money, I’m moving a little ahead of the curve and saying, you have an MVP plus revenues, you have some product going on. And that’s when we come in. So I’m avoiding, let’s say the value of debt to some extent. Yeah, right. Yeah. But the reason why we are in that stage is because we are clearly a mentor driven fund. We want to be a partner to the startup, and we would help them grow. Right. So we would actually, so the interesting part is we would actually earmark funds for the startup are the follow on to rounds. Right? So we would go in when they’re growing as well. But we want to be part of the journey.

Michael Waitze 11:41
Yeah, I understand the follow on part, I want to ask you about the mentoring side of it, right? Because this is where things really get tricky, right? When I look at big investment firms like Andreessen Horowitz and then contrast them against firms like benchmark, right. And they’re obviously operating in different parts of the value investment chain than you are, but interested in words has made this decision that we’re just going to build this entire infrastructure. And then we’re going to invest in companies and feed them into our infrastructure. And benchmark has basically said, we’re going to invest in growth and you’re on your own, like, we’ll make connections for you, we’re not going to do the hard yards, and it feels to me like you’re doing this at the early stage and just go and we’re going to invest in you. We’re also going to sit next to you right out of foreclosure and just say, here’s what we’ve learned over time investing in the first 25 companies, and here’s what we think we can add value. I’m really curious about how that works in reality.

Ajay Jain 12:29
Yeah, sure. Yeah. Yeah. See, I think we’re clear that we want to play to the strengths of the team. Right? There’s a diverse team, but all of them. Some commissioners with the startup world, for example, entrepreneurs, ecosystem players, plus investors, right. So we are playing to and the technology background, we all have, I come from a semiconductor plus education. Right? So we want to play to the strengths. So how do we do that? And how do we justify to the startup, right? One is we are saying we would take a board observer seat or a board seat in all our portfolio companies. But more importantly, what we’re saying is we would work with them on a week, one week basis. Understand, I think, see, it’s the journey, which is very critical, right? For a startup founder. And there’s a lot of ups and downs. The question is they want to talk to someone who can help them pushing themselves the right way, I am a mirror, I’m not really saying this is the way it has to be done. Unless I’m sitting in a boat seat. Right, right. I’m asking you to reflect more clearly. And I’m the person you have to talk to suggest look, I have an HR issue versus you know, how do I get my cap table? Correct? Right. Right. So we are we are there to help you there. And obviously the connects the other point of it is we have a very strong investor base, you know, the CEO of one of the most popular radio channels in India is is investor in the fund. Right? The CEO of large US Space billion dollar finance companies India sighted is the is the sponsor actually. Right. So we have the right investor beta, and that’s a tactical move from our side to help these guys get the right attention. Right. And we are telling them clearly, look, you spend about four to six hours a month to help these portfolio will map you so I think the experience I have from T hub, right? Where we map the mentors to this like, you know, any given day funded startups versus 6080 mentors, right. So the experience of mapping these mentors, getting them to get the right value, the startups get the right value, right matchmaking? Yeah, it’s something that will help us in good stead for the entire mentorship programme.

Michael Waitze 15:00
So this is what’s really interesting to me is that to be a great founder, right, and I say this a lot, but I’m just gonna say it again, to be a great founder, you really have to care about the thing you’re building, right? You can’t just notice a market cap and think like, okay, I can do that you really have to believe in it and care about it, right. But it takes a special kind of person to do it. And that person’s usually headstrong, like, how do you figure out institutionally? If somebody is going to be mentor trouble? Do you know what I mean? Like, because even if they can build a big company, if you can’t add value, then what’s the point in a way? But like the greatest, the greatest sports players can also be coached? How do you figure that part out? Do you know what I mean? Like even if they have all the skills? If they can’t be coached? It doesn’t matter?

Ajay Jain 15:42
Yeah. So. So let me give you a bit about the secret sauce of Silvernail. Without really revealing it could be have without revealing it. Sorry, go ahead. We have three characteristics that we would like in any founder. And I’m not. I’m not listing them here. But I’m saying the team that general partners and Investment Committee rates, each of the founders against these characteristics, individually. And then we collectively decide whether we are all in sync or not. Right?

Michael Waitze 16:18
And you’re not going to tell us three, I promise.

Ajay Jain 16:23
I won’t fall for that.

Michael Waitze 16:25
Theory. I’m kidding. I’m kidding. I just wanted to make you laugh. I didn’t think you’d be here for it. I just wanted to make it. Go ahead.

Ajay Jain 16:30
And I think you’re very right. We are clear. For me. It is the story of the founder. Right? Yeah. Unless I see the story, right. I’m not investing it. So I need to see the story behind if a founder tells me Look, I’m here in it for making the money. Mostly though. Yeah,

Michael Waitze 16:49
it is the right. Isn’t that part of the reverse mythology around startups? The idea I think that the people outside of the industry cat is I just want to find a guy and a gal that just wants to make a tonne of money. But the reality is that that doesn’t work. It really doesn’t like my grandfather once said to me, if you if you hang out with people just to like make the money, you’ll spend the rest of your life earning it, which meant it’s just the wrong way to live. Yeah. And

Ajay Jain 17:10
I think as I had said, the journey is important. Right. So if you’re enjoying the journey, yeah, the money would be there. Sure. There is the pot of gold at the end of the rainbow. I think so too, right? Yeah, yeah. Yeah. So I think we believe that we want to be part of the journey along with the startup founder. And it is the story that kind of come out as genuine. That’s the single most important thing for me, when I am going in to invest into a stock. Do

Michael Waitze 17:39
you feel like you’re also constantly learning that like one of the greatest things about being an early stage investor is you get to talk to people that are building things that are different and differentiated and that you can wake up every day going, I’m going to learn something really cool from that lady who’s building that thing?

Ajay Jain 17:54
Yeah, I agree. I think that’s the thing that keeps me going. That’s the thing that keeps me I give office hours to some of the incubators, accelerators across the country, because I still like that thing to speak with founders without any strings attached without saying, I’m an investor. Right, right. Yes. Yes. What you’re talking about what you want from me, who has been there, done that? But don’t talk to me just as an investor?

Michael Waitze 18:24
Yeah. Yeah. Think about what I get to learn by just talking to people all the time, right. So there’s no preconceived notions of me giving them any money or doing that kind of thing. But I get to actually have conversations with people. And for me, the learning is the best part of it by far.

Ajay Jain 18:37
Yeah, I agree. It’s an amazing experience. There was a time when I was a de hub that I would speak to almost six to eight startups every day. Wow. Right. Yes, was exhilarating. But now I’ve pulled down. But I still continue to speak to a lot of startups get their ideas. Yeah, sometimes I can be too honest about the feedback. Okay. Especially for the very early ones.

Michael Waitze 19:01
Do you feel like it gets easier and easier for you to figure out like during a first meeting, or during a second meeting, particularly after speaking, you know, spending a few years speaking to six entrepreneurs a day or six people a day about this stuff? And then obviously making investments where you meet somebody, and you’re like, This is a great idea, but I just don’t think you can do it.

Ajay Jain 19:19
Do you know what I mean? Yeah, I do have the gut feeling more often than not, but I still try to rationalise it as I can. Yeah. Yeah. But that’s there. And, you know, I sometimes end up meetings in 15 minutes, because of that very reason.

Michael Waitze 19:35
I mean, I feel bad too. But I can tell look, there are some times that people want to be on the show and I get them onto a prep call. And I just think there’s just not enough there.

Ajay Jain 19:45
Do you know what I mean? Yeah.

Michael Waitze 19:48
Speaking what is the overall thesis of an early stage fund in India, and I’m curious if you think it’s different in India than it would be in Indonesia or in some other country.

Ajay Jain 20:00
Yeah, I think let me tell you, I was reading this book the power law by Michael Celebi. Yep. Very interesting book. And I think most fun, especially in this part of the world might be looking at a Belko more than the power code. Right. What I mean by that is they’re looking at how to get average results out of the entire fund. Yeah. Right. Whereas we are clearly approaching it with saying, Look, each investment I make, how do I get the homerun? Right. And I’m trying to get deeper and deeper into that philosophy. And the follow on rounds really helped us it’ll be heavy earmark 35% of the fund for follow on round. Yeah. Right. And that’s something not as common when compared to the early stage funds in India. Right? Well, globally, what I’ve seen is might be the business or more right than the head, and I’m talking at a fun level. Right. Right. But I think India being at the stage where it is being at, it’s very difficult for an entrepreneur to go totally wrong in India, right, you should be doing something terribly bad.

Michael Waitze 21:11
The growth is so fast, because so much because

Ajay Jain 21:13
there’s yeah, there’s so much market and you’re doing it at a low cost. Yeah. Okay. Right. Yeah. So I think the average hits are much higher in India when compared to at least the West. Right. And I do not have numbers for Indonesia, for example, comparison. Yep. Yeah. Yeah. And we are at a very nice age, right? I mean, we are finding newer sectors, like just now. Sky road, the Startup Launch vehicle into the space, right. And that’s, indeed genius startup launching something into the Aerospace is a great achievement. Yeah, right. Yeah, we’re not confined to the software world anymore. We’re looking at using technology across various segments. That’s, I think, the most interesting part where we are at this stage in India,

Michael Waitze 22:01
and is there some kind of synergistic view across the portfolio? In other words, do you look at it from a portfolio basis? Or do you look at it on an individual basis? You know, what I mean? Are you trying to have a balanced thing, because you know, you’re not investing in 7000 companies, you’re investing in 20 or 30 companies, right. And it depends how you take a portfolio view of them or you just don’t care, you just try to invest in the best stuff you don’t I mean, as

Ajay Jain 22:21
I said earlier, we are playing to our strengths. So we would still look at anything to do with technology. But we have some areas of focus, for example, b2b SaaS is a favourite among ours, b2c consumer internet is another space we would like to be in sustainability is, again, an interesting space where we would like to see technology being used much more, and we are getting much heavier, deeper Technologies has always been a favourite of ours, and we would go invest into it more. And the emerging ones like web three Dotto. So those are the areas we would like to focus on, we would avoid those that have a larger gestation period, or a high burn, kind of situation.

Michael Waitze 23:10
Yeah, fair enough. What’s your view on web three? Like, what do you look for when you think about what the web three investment ecosystem is going to look like? And how it’s gonna grow? And what its impact is going to be?

Ajay Jain 23:21
Yeah, so I think I would look at web three, a single parameter that I would look at is efficiency. Right? I think, you know, technology needs to enhance efficiency. And if that’s not happening clearly, for me, it’s a no. Right? And that’s why some of the, some of the extensions of the three and not keen on my single and some of my partners might have differing view. And that’s why that’s a diverse set of people. But for me, the single key point that I would like to make is the efficiency agenda. Right? And the scale that it is growing at,

Michael Waitze 24:01
okay, what is an example that so for me, web three looks like, looks like this? How can I build a community around the thing that I’m building? How can I engage that community in the thing that I’m building to make sure that they support but that they also benefit from it? How can I make sure that this decentralised aspect of the web three also has a hybrid element to it, where there has to be physical interaction at some level, because that’s where humans make real connections. And yet, it allows me to do things in a virtual world that I can’t do in the physical world that benefits my existence in the physical world. Does that all make sense?

Ajay Jain 24:35
Yeah, that that does. The single word that I would pick up from that is the decentralisation that I think can create inefficiencies, if not done properly enforce, let’s say securities, for example, right? And US border transactions, right? You need the decentralisation and that’s acceptable, because there can be an inefficiency in the system at that level. Yep. But at a very p2p level, our A C to C level, you are having decentralisation and causing inefficiencies. I do not believe that’s a good way,

Michael Waitze 25:08
it’s a super great point to make, right? In other words, there’s a reason why. And let’s just use like the New York Stock Exchange, as an example is a proxy, I don’t really care about the trading part of it. But the centralization of that, and the idea that somebody sits in the middle and guarantees both sides without either one of us knowing who we are, right? Like I could trade a million shares of Apple with you and never know, was you. Or I could trade a million shares of Apple with literally like 10,000 people and never know who it was. And that centralization actually makes it super efficient. I know where to go. I know who’s in charge. And I know how to like mitigate discrepancies, right? This is super efficient. Now there are other places in the world where I’d like to have decentralisation This is why I mentioned the word hybrid before. And that’s why I think that that’s where the real power is, if the decentralised part of it is what gives it its efficiency and makes it faster. Right, then I’m all in.

Ajay Jain 25:57
Yes, I agree. I totally agree with you. And for example, let’s say a vaccine, right? Yeah, vaccine tract and being insured that you know, can break your etc, is being maintained, etc, the gold chain value, I think I’m all for it. Right. But somewhere where it’s not necessarily and you’re just adding layers, it creates inefficiencies. And that’s where it will not work. Yep,

Michael Waitze 26:20
I agree with you. Look, I think it’s super exciting, right? Because we’re at the super, super early stages of it, I look at ways where I can take advantage of any kind of new technology in every business that I build, because I’ve seen it happen. When I was at Goldman Sachs, the idea that we’d use like, a non windows back end was anathema. But as soon as Linux became supported by Red Hat, and it was actually a product we could buy and had a service sector a service agreement around it, happy to use free software and open source software. Right. So it’s a completely different thing. And it made us way more efficient. Sorry, go ahead.

Ajay Jain 26:54
No, I agree. I think that is where we also would like to see some of the startups that we would invest in end up with. Yeah. And that’s something that we keep our ears and eyes open for?

Michael Waitze 27:05
Do you pay attention to these, the open source software development, I did a recording yesterday with a guy from Finland whose whole company is built around open source software. And it was just an incredible discussion around how to benefit from not while still building a really gigantic business.

Ajay Jain 27:20
Yeah. And I think that’s extremely powerful. In fact, I was speaking to robotics company the other day, which is trying to do tactile, you know, hand movements, etc, for dexterity. And I was trying to understand and actually advise them to choose one path, whether you want to be like an IP provider, right? You want to be like a three M, for example, right? Or do you want to actually go to the end consumer? And if you want to do that, that’s a very different path versus whether you want to get your IP royalty etc, going, right? And which one you have to choose? You have to decide? Because I think both are very different parts. Both require different kinds of monies and different kinds of people. Yeah,

Michael Waitze 28:04
I agree. Look, the VC business globally, and I think this is true in every country, right, in a way kind of tends to be a syndicate business. Right. And part of that is risk mitigation and risk sharing. You’re smiling at me, is that not true? Or?

Ajay Jain 28:17
I agree, but please complete your question.

Michael Waitze 28:19
So but I’m just curious, right? Because the syndication of any deal means that you have to work with other partners, right. And in some cases, because your the way one operates could be super different from the way another fund operates, that the syndication becomes a little bit challenging because of the differences between the funds. I’m curious if you think that Silverneedle operates in a way that’s different, like then what are some of the challenges for dealing with other partners? So if you’re going to do this syndication thing?

Ajay Jain 28:48
Sure. So we are early in the stages, so we have invested in one startup, and I’m looking at four others, and most, except for one, most of them are syndication. But it’s not like a formal syndication. It just so happens that people are coming up the cap table. Okay. For us, it’s very clear that among the portfolio 50% or so of the startups will go in as a lone investor, as an individual, and try to, you know, guide the startup through the journey, right. That’s something that we’ve decided because we think we need a better skin in the game trying to get the startup go through the rigmarole. The other part of it is I think other investors also look at value. For example, one of the startups we changed some of the term sheet detailing because of where we come from the learnings, etc. Right? The reserve matters, etc, will change and I think the other investors actually appreciated what we brought to the table. Interesting. So we’re happy to work with with other investors. The reason I smiled is because I think I agree there is a But mentality, but we are clear we would go in when we see value, and we can give value back to our industry. It’s very clear with that intent. Yeah, I

Michael Waitze 30:09
didn’t even mean to suggest that there was a herd mentality. And I would never suggest that you would participate in that. I mean, look, one of the things again, that I learned from a big investor GIC, when I was working at Goldman, and he said to me, the greatest investors are the people that are can anticipate other people’s anticipations. Right. So you want to get in first before everybody else figures it out. If your herd mentality investing? Well, everybody’s doing the same thing. It’s gonna be harder to win. And you said earlier, like, I don’t want to use the word venturing. We’re not attempting to get average returns. Right, right. Yeah, yeah. So I wouldn’t suggest that you’re trying to do herd mentality. As you get more and more into the development of Silverneedle, do you change the way that you evaluate companies that actually do get investment? Do you know what I mean? Cuz you said, you have a methodology for determining whether you like the founders and the founding team and stuff like that those three principles, right. But as you grow, and as you learn more, do you adapt those things as well? Definitely, we

Ajay Jain 31:05
adapt, I think even technology changes what we’re looking for changes, but I think the foundation is very strong. Right? We are building on a foundation that we have done through the earlier 25 investments that have paid handsome dividends for us, right. So foundation is strong, we will stick to those principles. But yes, we will adopt, adapt to what is happening in the market today. How do I get the right conditions, terms, etc? In my documentation? And how do I value a technology? So I think that’s the piece that keeps evaluating. evolving much better, right? Much more serious.

Michael Waitze 31:47
Do you ever have meetings with your own partners, right, so the other investment partners, the people that are part of Silverneedle, you’re sitting around and just thinking, you know, what, I think this thing is gonna happen X or whatever it is, is gonna happen, we need to go and find, you know, 10 or 11 people trying to build this thing, and then go out and find it, then evaluate and then make the investment or you like, are you waiting for people to come to you?

Ajay Jain 32:09
Or no, we have clear thesis, for example, the investment with it, in Irish, it is in the creative economic space. Right. So they help you know, your creators get more value for the, for the videos, they post and they have the Indian chefs and Jeep got bored on their, on their portal. Yep. Right. So so we are clear that space is going to expand and explode. And so that intentional investment on our site. Similarly, the other startups that we are looking at, for example, tomorrow, it is an event management platform, a virtual or physical event. Right. And it can help you improve the overall experience of the event, right? Let’s say you have 1000, attendees, etc. Right? Now, that’s again, a space we are seeing will change. Obviously, the pandemic has made changes to it already. It’ll keep adapting, and we believe the metaverse will come into picture as we go along. Right. So again, these are things that we are clear via we into it, we have areas or segments that we want to focus and get startups in that space.

Unknown Speaker 33:31
Yeah, it’s just interesting, you brought the event thing, both virtual, because everything I believe is going to be hybrid, right, we’re going to be able to use technology to take advantage of building immersive experiences. But at some point, people are going to want to be together in the same room as well. And mixing those two things together, I think is going to be really powerful. Let me give you an example. Let’s say your grandmother, I always use grandma, because I loved my grandmother. But anyway, let’s say your grandmother is getting older has never been to Paris, but you’ve been and you’ve been to the top of the Empire, not the Empire steel, but you pinned to the top of the Eiffel Tower. And you just think I want my grandmother to feel that feeling of going up the elevator getting onto the observatory deck and watching it, but she can’t go. So again, this gets back to efficiency, can’t get on a plane, but could go into a room or could maybe because I don’t think headsets are going to be the way people interact with virtual reality because I don’t think it feels natural, and you can’t share it with somebody like you can’t hold somebody’s hand and have that same experience. But I do believe that there are going to be spaces where immersive technology can give those types of experiences. Is that what you’re talking about when you say the metaverse in conjunction with the physical world is going to come together in a way like that.

Ajay Jain 34:40
I agree and I think sports I for me watching a football match with my friends across the globe. Yeah, it’s like it’s like an amazing experience. And I think that’s where I think we will be heading towards sooner or later. And some are might solve some of those problems as As it grows,

Michael Waitze 35:01
yeah, so I have this idea, right. And it’s just starting with a room, let’s say you sit in a room in India, and one of your buddies sits in a room in Paris and the other ones in London or whatever, right. And yet, we build an immersive experience that makes you feel like you’re at, you know, some stadium, you can hear the right or you can hear the feeling, you get the feeling, you know what I mean, you get that sense, you’re there, even though you’re not in the same place, but we can use it doing immersive technology to give you that feeling. But on the other hand, you can also do it with shopping. Sure, right. Because I think about this in the context of E commerce, again, you want to go to some store in Paris, but you can’t get there. But you can simulate it and make it feel like you’re there, the salespersons there and the products are there. So that now you really want to buy because it’s so immersive, right? This is the type of stuff I’m talking about. Sorry, go ahead.

Ajay Jain 35:51
I agree. And I think again, I relate more to the sports than the shopping. And I totally agree that if one can do that, and keep doing that much better. Watch Messi live the World Cup, for example. That will be awesome. Live feeding in India. But yes, the shopping. I think it has been tried a lot shopping in the past few years. And it has not taken off the way I believe it is. And that might be because of two reasons. One people are so used to, you know, trying it out still. Yeah. And second might be the technology was not. I think we are at the cusp right now. And it might come soon.

Michael Waitze 36:35
So can I ask you this to? Do you look at investments that like the world is making and read the press and just think it’s definitely too early? Like, I know, there’s a bunch of hype around this, but it’s definitely too early and you sit around with your partners and you just go on? We’re not doing that yet. You know what I mean?

Ajay Jain 36:49
Yeah, yeah, we keep doing that. And I think there are some things we have decided internally not to patch or not to look into. Because either it’s too early or might be there are better technologies that will come and overtake it. Fair enough. Yeah. Right. Yeah. And that’s something that you have to do a lot of research. So all of us spend a lot of time reading up on stuff trying to understand what’s the next thing that’s happening? And, you know, keep ourselves updated on that.

Michael Waitze 37:19
Got it. Tell me something about the Indian startup ecosystem that I don’t already know.

Ajay Jain 37:24
Yeah, I think I think the one thing that I’m seeing is people are trying to get into newer segments, which was not the case. Like what, right. So health, for example, life sciences is something that’s taking up much more than earlier. Right, and the government support this phenomenal there. Right. Okay. So the single one thing that if I have to say is driving it is the government support across central and state governments. Okay, yeah, there’s a lot of money available for those who want to, you know, get early grounds, the fund, and there’s a lot of encouragement, you can take a break in your education and come back a year later, because you try to do a startup and that’s a big change for red India, what do you

Michael Waitze 38:11
feel like the government support that’s there really is providing energy to the whole ecosystem. And I’ll give an example and try to get your opinion on this. You know, UPI is something, right, the payment rails so important, the way money moves around any economy is just so important for the growth of that economy and the stability of that economy, but also for the inclusion, right, the financial inclusion for everybody. India has done this superduper Well, do you can you get a sense for that when you go out to people that are building stuff that they’re really appreciate the support that the government gives, not just in the example that you’ve given, but in other subtle ways where like, they say, Yeah, we need to have this for everybody. And yeah, I think better go ahead. Sorry.

Ajay Jain 38:49
Yes, I think the garment has also opened up, for example, for a startup to work with the garment organisation was not so easy earlier. Okay. But today, they have opened that up. So that’s great. The space organisation is working with the startup, right is through is working with the startup. That’s a new thing for India. Okay, right. Yeah, that has happened over the past few years. Right. The encouragement of startups getting involved with the government is much needed thing. And that has happened opening up of the financial stack, as you know, and building on top of it has been phenomenal. I think it’s changed the way the entire world looks at finance from India perspective, I think so. I think we have grown leaps and bounds with that stack. And there are other stacks coming into the picture, which will make a lot of startups grow because of that.

Michael Waitze 39:41
What is that like? Okay, health information, stuff like that. Go ahead. Correct.

Ajay Jain 39:44
Open health information, for example, is a classic example. I think changes will happen in the insurance space a lot more. Right? And that, for example, Silverneedle is waiting on that to happen and see where we can better or

Michael Waitze 39:58
Qivana tell me how you think so you know, They have one of the largest insurer tech podcasts in the world. So I’m curious what you think about the insurance space in India as you look at it and think about how it’s going to grow.

Ajay Jain 40:07
I don’t know the exact numbers, but let’s say the bottom 30% has low or no access to insurance. Yep. Right. Yeah. And how do you make that happen? And that’s, that’s coming is what I understand. Yeah. Right. And that will change the game entirely. Right. Because today, most insurance companies are I mean, most of the insurance happens through offices. Right. It’s not personalised, much more in walls pays to get into the person. The other space is the home healthcare. Can I get insurance for home healthcare? Right? Yeah, I think that’s another interesting space that can open up a lot of avenues. Yeah,

Michael Waitze 40:49
because penetration in the insurance space is so low. And because technology is changing, and even through the UPI, you see companies like phone pay, we can go on and on and talk about insurance. The distribution side is trying to get solved the knowledge side, right. So the literacy side is trying to get solved and also the penetration side is trying to get solved. I love this idea. And India’s a massive opportunity for growth there. Okay, yeah. I don’t want to take up any more of your time. I feel like I’ve done enough of that today. You gotta come back. I want to keep an ongoing conversation. If you don’t mind this things change. I’d love to learn more. Mike, how this is going.

Ajay Jain 41:20
Yeah, yep. Yeah. Thanks for having me here. It was fun. And I look forward.

Michael Waitze 41:25
Ajay Jain, a Co- founder and Managing Partner at Silverneedle Ventures. Thank you very much for doing that.

Ajay Jain 41:30
Thanks. Bye. Take care.

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