Krishna Gupta, alumnus of Massachusetts Institute of Technology, started Romulus Capital from his dorm room back in 2008. Krishna saw that there was a ton of startup activity at MIT, Harvard, but there were not enough early/seed stage investors in 2008. Being the entrepreneurial, smart and hard working person he is, Krishna immediately saw an opportunity to tap into. He raised his first fund of 7 million while still at college. Now, Krishna and his partner have announced the closure of a 50 million dollar fund to continue to support early stage entrepreneurs.
Krishna is passionate about India and understanding this market, and plans to deploy a fifth of this current fund in international markets (including India).
Edited excerpts from our conversation with Krishna Gupta:
YS: How did Romulus begin? Tell us your story.
KG: I was an entrepreneurial kind of a guy. I wanted to build companies, but the opportunity that I saw was to create a fund that can help create foundations for many companies. I started Romulus when I was a senior at MIT. Back in 2008, there weren’t as many seed stage funds in the US as well. In India, the story was somewhat similar. This was the time when Sasha Mirchandani was setting up Mumbai Angels. We started with a small fund of 7 million dollars. In fact, one of our first backers was from India, a group called Uflex Industries. Many of the companies we funded that time had MIT and Harvard connections.
Today, we are a 50 million USD fund. Our investors are diverse — we have backers from the US, Hong Kong, Europe and Russia. They are a bunch of very powerful, accomplished and diverse set of investors. Most of our investors have built companies themselves.
We prefer to invest in enterprise software rather than consumer companies.
YS: Was there a pressing need for seed capital in 2008 in the US? How has it changed today?
KG: Today a smart founder can raise seed capital in the US as there are many options out there. But clearly there is a dearth of good investment partners. We are very hands on. We help companies win customers. We help them win their teams. There are very few seed stage funds in the US that are able to do this even today.
YS: How did you go about raising $ 50 million fund at a very young age?
KG: This was done the old fashioned way. I invested a lot of time in building relationships with new people. I went to London, Hong Kong, New York and Boston. I don’t come from a wealthy family or anything. I did it on my own. The question always was how can we bring together a group of powerful people who are aligned with our business philosophy? We are not in the business betting game, we are in the business of business building. Our investors across the globe are people who have built businesses.
YS: What do you look for in founders?
KG: We look for intelligent founders. Are they mature enough about the markets? We are not interested in quick fixes. We want to support big long term businesses. It takes a different kind of founder, who is mature beyond his/her years, and has the technical proficiency to go about the task.
YS: You prefer enterprise businesses to consumer businesses. Why?
KG: Consumer companies at a seed stage are essentially a bet. We are not interested in bets. If you think about large consumer companies today, SnapChat, Twitter and Instagram, they were all bets at the seed stage. So that is not just our proxy.
Earlier, seasoned executives used to build enterprise companies, but today the age is decreasing. Lot of younger people are building enterprise companies today.
YS: Tell us about your plans for investments in international markets
KG: We will invest a fifth of our fund abroad. For which we are interested in places like India and Israel, which have strong entrepreneurial and technology backgrounds. My family is from UP. I spend a lot of time in India; I come here every year. We believe in Indian entrepreneurs’ potential to build large global companies. We look forward to hearing from them.
YS: What is your advice to entrepreneurs?
KG: Don’t get caught up in the hype. It’s not very fashionable to build a business like everyone makes you believe. If you have the stomach for entrepreneurship, think about building a very strong foundation from day one for a really big business for the long term.
To know more, visit romuluscap.com and feel free to reach out to Krishna.