Raj Kumar & Manu Sharma on Venture Capital Investments, in a nutshell

Rachna Singh

Most of us have read about the Flipkart success story. Founded in 2007 by Sachin and Binny Bansal with just Rs4 lakh, the Flipkart valuation in 2018 was a stupendous $20.8 billion when it was acquired by Walmart. But very few know that the initial funding for the business was raised from venture capital firms Accel India and Tiger Global, followed by several rounds of funding by other angel investors and venture capitalists. We often try to make sense of terms like venture capital (VC), VC funding, start-up valuation, deal evaluation, etc, but more often than not, hit a brick wall. The book ‘Venture Capital Investments’, by the scholarly duo Raj Kumar and Manu Sharma, is a quick and easy guide that handholds the reader through the seemingly complex jargon of the venture capital world.

The book would interest even an untutored reader as it explains how venture capitalists zero in on innovative ideas that are game- changers and do not only invest capital, but also mentor and nurture such ventures. Weaving in of the WhatsApp story and how its sole venture investor, Sequoia Capital, invested $60 million but sold the start-up to Facebook for $22 billion, adds an element of interest and pizzaz to what some would consider a largely academic discourse.

The analysis of India-based start-ups and their venture capital investors — like Yatra and IDG Ventures or Policy Bazaar and Inventus Capital Partners or Snapdeal and Nexus Venture Partners — gives the book a contemporary Indian context.

A large chunk of the work, however, targets prospective entrepreneurs and instructs them about the intricacies of obtaining venture capital for their start-ups. The chapters on the structure of VC funds, valuation of start-ups, fund economics of VC firms, etc, read like an academic textbook but are concise and informative. The book offers a quick and compact course on the fundamentals of venture capital.