At Malpani Ventures, we’re committed to fostering entrepreneurship and intrapreneurship within the startups we fund. We understand that startups are often strapped for cash, limiting their ability to offer employees opportunities to think and act like business owners. That’s why we are taking an unconventional approach by offering grants of Rs 1 lakh to selected employees within these startups.
This initiative is designed to spark innovation, promote engagement, and cultivate a sense of ownership among team members. Why Rs 1 lakh? Because we want to promote frugal innovation, and if you can’t accomplish something useful with Rs 1 lakh, you won’t be able to able to deploy Rs 1 crores sensibly either. For the ones who deliver results with this initial funding, we are happy to offer more money, to help them scale it up!
Why Intrapreneurship Matters
Intrapreneurship is about empowering employees to think like entrepreneurs within the safety net of a startup. We believe that when employees are encouraged to act as business owners—generating ideas, solving problems, and taking initiative—everyone benefits: the employee, the startup, and the investor.
Often, employees are focused solely on their assigned tasks, leading to a narrow view of their role in the company. By encouraging intrapreneurship, we shift this mindset, allowing employees to see the big picture. This helps foster creativity, innovation, and long-term thinking, all essential for a startup’s growth. Employees who think like owners are more engaged, more likely to generate valuable ideas, and more invested in the company’s success.
How the Grant Program Works
We partner closely with the founders of the startups we fund. The founders are in the best position to identify which employees show potential for intrapreneurship. These selected individuals are then invited to pitch their ideas to us for funding consideration. If their ideas align with the company’s vision and show growth potential, they receive a grant of Rs 1 lakh to explore and implement their projects.
A Win-Win for All Stakeholders
This intrapreneurship grant creates a win-win situation at multiple levels:
- For Employees: This is a zero-risk opportunity for employees to explore their interests, hone their skills, and showcase their leadership potential. They get financial backing to experiment and take ownership of their ideas without having to leave their current jobs.
- For Startups: The CEO gains an extended team of intrapreneurs, enabling him or her to tap into more creative minds. Startups often struggle to incentivize employees beyond salary and equity, but this grant creates an entirely new dynamic. It helps founders identify those employees who are willing to take the initiative, think outside the box, and contribute more than their job description demands.
- For Investors: For us, these are low-cost experiments. Not every idea will succeed, but the upside potential is enormous. If just one or two of these intrapreneurial experiments bear fruit, they can significantly accelerate the startup’s growth, creating a positive feedback loop for everyone involved.
The Challenge and Opportunity for Founders
This model requires a confident and forward-thinking founder. Not every entrepreneur will be comfortable with giving employees the freedom to experiment, as it may lead to fears about losing control or employees leaving. However, we believe that founders should create opportunities within the startup that allow employees to grow, learn, and stay engaged rather than being afraid of attrition.
By offering employees a safe space to experiment and expand their skill sets, founders can retain talent and avoid the stagnation that often drives good people away. It’s far better to provide a platform for growth and innovation within the startup than to lose valuable team members because they feel uninspired or underutilized.
Conclusion: Intrapreneurship is the Future
Intrapreneurship isn’t just a buzzword—it’s a powerful tool to fuel growth in a startup. By offering Rs 1 lakh grants to employees, we aim to encourage innovation, boost engagement, and create opportunities for growth at every level. This approach benefits everyone involved—the employees, the startup, and the investor. It’s time we started thinking bigger and investing in the potential within our teams.
In startups, balancing narrative and numbers is crucial. Both aspects are interconnected and provide a comprehensive picture of a startup's potential. Founders focusing on both increase their chances of securing investments, building trust, and scaling successfully.
The Role of Narrative:
A strong narrative is often the first thing investors and customers encounter. It paints a vivid picture of why a startup exists and the problem it seeks to solve. An engaging narrative helps founders to:
The Role of Numbers:
While a great narrative can capture attention, numbers validate it. Startups need to show evidence that their solution has traction, growth potential, and financial viability. Key elements that numbers highlight include:
Why Both Are Essential
How Founders Can Master Both
To attract capital, founders must develop coherent narratives about their firms, convey these narratives effectively to investors, and act consistently. To allocate capital well, they need to identify value drivers, track certain parameters to measure the unfolding narrative, and adapt to unforeseen events.
For investors, it's important to find companies with compelling narratives, convert these narratives into value, and avoid overpaying. Diversifying investments across multiple narratives and remaining open to changes is essential.
The general partners (GPs) of the firm have a legal and ethical obligation to act in the best interests of the limited partners (LPs) or investors. This involves ensuring that the companies in which the fund invests adhere to financial, legal, and regulatory standards. Venture capitalists (VCs) typically carry out due diligence (DD) to meticulously examine and verify the accuracy of past performance and compliance data of potential investments. This process helps to mitigate risks and make informed investment decisions.
What is generally covered in DD:
Legal Due Diligence
Financial and secretarial Due Diligence
In venture capital (VC) investments, the party responsible for paying due diligence costs can vary depending on the deal's terms and the relationship between the investor and the startup. Here’s an overview of common practices:
1. VC Firm (Investor) Pays
2. Shared Costs (Negotiated)
3. Startup Pays (Most Common in India)
4. Reimbursement after Investment
In most cases, the VC firm assumes the costs, but this can be negotiated. The terms should always be clearly defined in the term sheet to avoid disputes.
To avoid disputes, we believe the best approach would be to establish a tripartite agreement involving the Investor, the startup, and the due diligence (DD) firm. This agreement would outline that if the investment is successful, the DD firm will receive payment from the funded startup, ensuring that the Investor is not financially burdened. Additionally, if the investment falls through for any reason, the venture capital (VC) fund will be responsible for compensating the DD firm for their due diligence services.
Malpani Ventures is an early-stage investment firm that provides patient capital to frugal founders. Our portfolio includes businesses spanning education, healthcare, and software.
We realize that not all businesses solve problems that can provide outsized venture returns but are essential for society. We have a long-standing commitment to supporting impact-based startups backing entrepreneurs who are driving meaningful change. Over the years, we’ve helped scale innovative solutions that address key challenges like access to quality education, digital learning, and inclusive models for underserved communities.
We are now looking to hire a full-time manager who can oversee the impact portfolio.
Location: Mumbai, On-site role
Type: Full-time
Experience: 3 to 5 years - We are not fixated on education/ experience but want to work with someone passionate about working with founders In this field
Salary: Fair remuneration, commensurate with experience and responsibilities
Role Overview:
As the Program Manager, you will be at the forefront of supporting early-stage startups focused on social impact. We have a bunch of startups that we actively support. Apni Pathshala is our effort to increase digital literacy in the country,
We are planning to launch an incubator program to support and fund education-based startups. You’ll manage the incubator program end-to-end, from the selection and onboarding of participants to providing hands-on guidance, mentoring, and facilitating access to resources. This is a unique opportunity for ex-founders/operators/consultants with a track record in the social impact space, particularly in education, who are ready to help the next generation of mission-driven entrepreneurs.
Key Responsibilities:
This would be a great fit If you are:
Our Incubator is in the works...
Our next audacious plan is to launch an incubator to work with young companies and provide them with access to funding, our network and more to help build more sustainable businesses
We have designated office space of 1,500 sq. ft. in Kurla and intend to focus on ideas that look to solve the following:
o Upskilling of youth
o Increasing access to education: affordable or vernacular or socially inclusive
o Learning aids to improve the quality of education
How to Apply:
Interested candidates are requested to carefully read through our website and available resources, to understand our philosophy and objectives. Please send an email to pitch@malpaniventures.com with the subject line “Social Impact Manager - [Your Name]." Include the following:
1. Your updated resume including your links to your social media profiles, blogs, and other online platforms.
2. A one-pager that explains your motivation for wanting to work at Malpani Ventures and how your skills align with the role.
3. A one-pager on how you would run the social impact incubator
We appreciate your interest in joining our team. Kindly note that only applications that include all (3) of the above, will be considered for review by the team.
Join us in making a lasting impact and empowering the next generation of social entrepreneurs!
All Early-stage venture capitalists (VCs) typically operate within a fixed time frame, usually 8-10 years, to generate returns for their investors (known as Limited Partners). Similar to any investment, VCs need to exit their investments within a specific timeframe and meet their obligations to their investors according to the fund's lifecycle. Therefore, it's common practice to include exit rights as part of an investment term sheet.
What Are Exit Clauses?
Exit clauses are provisions in a venture capital agreement that outline the conditions under which an investor can exit their investment. They essentially dictate how and when an investor can sell their shares or otherwise liquidate their stake in the company. These clauses are designed to protect the investor's interests and ensure a structured way to realize returns on their investment.
Key Types of Exit Clauses
1. Drag-Along Rights
Drag-along rights enable majority shareholders (often the founders or a leading VC) to force minority shareholders to sell their shares if a third party offers to buy the company. This clause ensures that a potential buyer can acquire 100% of the company, making it more attractive and feasible for acquisition.
2. Tag-Along Rights
Tag-along rights protect minority shareholders by allowing them to join in on the sale of shares if a majority shareholder decides to sell their stake. This ensures that minority investors have the opportunity to exit on the same terms as the majority.
3. Liquidation Preferences
Liquidation preferences determine the order and amount of payouts to investors in the event of a liquidation (e.g., sale, merger, or bankruptcy). Common preferences include:
4. Redemption Rights
Redemption rights allow investors to force the company to buy back their shares after a certain period or under specific conditions. This clause provides investors with an exit mechanism if the company hasn’t gone public or been acquired within a specified time frame.
Key Factors to Consider
When negotiating exit clauses, both entrepreneurs and investors should carefully evaluate several key factors:
We think that at the Early stage, an exit clause is onerous for the founders. It's premature to establish an exit date and offer investors extra remedies when they are simply speculating on a very early-stage company. We feel Pre-seed investors should consider a timeline of 8-10 years given the stage they operate at. Whereas Post Series-A the standard of 5-7 years as the exit timeline is reasonable.
Strategies for Founders:
Extend your timeframe
Founders should consider extending timelines according to their vision for their business
Seeking involvement in exit decisions
Rather than complete blocking rights, consider fair middle grounds like rights of first refusal
Negotiating Exit Clauses: Tips for Founders and VCs
Conclusion
Exit clauses are a fundamental aspect of venture capital agreements that can significantly impact both the startup’s growth trajectory and the investor’s return on investment. By understanding the various types of exit clauses and their implications, both startups and VC funds can better negotiate terms that protect their interests while fostering a productive and mutually beneficial relationship. As with all aspects of venture capital deals, clarity, alignment, and good legal guidance are key to crafting effective exit strategies.
References:
https://www.svb.com/startup-insights/vc-relations/Venture-Capital-Term-Sheets/
https://kayoneconsulting.com/vc-term-sheet-important-clauses/
https://treelife.in/legal/exit-rights-a-founders-perspective-detailed/
We had the opportunity to learn about ABM last week, in a seminar that Chris Higgins conducted for our founder group focusing on the fundamentals of Account-based marketing (ABM). Chris has over 20 years of experience as a marketer at organizations such as Netcore Cloud, CleverTap, among others. We covered practical aspects of ABM in the seminar relevant to startups like:
•What is ABM - What type of ICP/GTM does it work for?
• Step-by-step plan for running your first ABM campaign
•How to think about budgets for ABM campaigns?
In this blog, we will talk about some of these concepts that Chris was gracious enough to share with us in his insightful seminar. We will also share some nuggets from our conversation in the coming weeks,
Stay Tuned!
You can learn more about Chris & his work here:
What is Account-Based Marketing?
ABM is a highly focused business strategy in which a marketing team works closely with sales to identify key prospects or high-value accounts, creating personalized campaigns to engage each account individually. Rather than taking a one-size-fits-all approach, ABM treats each target account as a “market of one.”
The main Elements/Pillars of ABM include:
Benefits of ABM
ABM Tactics and Tools
Challenges in ABM Implementation
Conclusion
Account-Based Marketing is a strategic approach that aligns marketing and sales to drive meaningful engagement with high-value accounts. By focusing on quality over quantity, ABM enables businesses to build deeper relationships, shorten sales cycles, and achieve better ROI. In an increasingly competitive market, ABM provides the personalized, targeted approach that B2B companies need to stand out and win big.