Coronavirus: Survive now, thrive later, Sanjay Nath of Blume Ventures tells startups

Sanjay Nath founded Bengaluru and Mumbai-based Blume Ventures along with Karthik Reddy in 2011. A Mumbaikar at heart, Sanjay did his engineering in information systems from BITS Pilani, and MBA from UCLA's Anderson Graduate School of Management.

He started his career in product marketing with Sun Microsystems, and then moved to PwC as a strategy consultant. After PwC was acquired by IBM, Sanjay left the firm to become a member of Mumbai Angels, his first exposure to angel investing and venture capital.

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At Blume Ventures, Sanjay oversees the broad B2B tech space, and manages investment and ecosystem partnerships. The spectrum of investments Sanjay covers within the B2B space range from enterprise software, cloud, and SaaS, to hardware, IoT, robotics, AI/ML, data science and deep tech.

He has been closely associated with several leading portfolio companies such as Locus, LBB, Tricog, DataWeave, and Yulu Bike, amongst others. A board member on the Draper Venture Network (DVN) – an affiliation of global venture firms – Sanjay represents Blume as a founding partner-member of Arka Venture Labs, a cross-border B2B seed fund formed in alliance with Benhamou Global Ventures (BGV), and Emergent Ventures.

So far, Blume Ventures has nearly $150 million in funds, and has invested in over 192 companies. Its star portfolio companies include Dunzo, LBB, Cashify, and Unacademy.

Speaking of what really got him interested in venture capital, he says,

"It was just about connecting with people and passionate founders, and listening to these interesting folks who want to go out and change the world. I like to listen to those who are very obsessive and pathological about a problem statement that is close to their heart."

Sanjay recently spoke to Siddhartha Ahluwalia on the 100X Entrepreneur podcast – a series featuring founders, venture capitalists, and angel investors – by Prime Venture Partners.

Fighting COVID-19

The first and foremost important thing is to get your house in order, which is applicable to both – venture capitalists and startup founders.

Sanjay says players should be able to gauge and understand if they are adequately capitalised, or if denial over the absence of real-time cash has kicked in.

It is imperative that founders understand what’s going to hit them next. They should plan not just for the months of coronavirus' effects, but for the next two to five years, he says, adding the entire industry will now go at a more measured pace than before.

The first thing he did at Blume, when the coronavirus hit, was assess the impact, Sanjay says. His focus was to make sure that Blume’s portfolio companies had enough capital, were actively conserving cash, and extending their runways.

Second, was looking at an active backlog from last year, in terms of all the startups that approached the VC firm. He says Blume Ventures has actively worked towards building a brand around attracting the right kind of founders.

However, he also says it is not the time to rush and aggressively invest in companies either.

Sanjay says, “In one sense, it is an investors’ market as you can imagine. I don’t think people are rushing. I don’t think any VC is rushing. But have we stopped evaluating? No, of course not.”

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Is a crisis the best time to back founders?

Yes, and no, says Sanjay.

Startups have to think about surviving the crisis right now, instead of thriving, he says. Founders should start thinking of streamlining their processes (“put your house in order”), and find ways to save money, he adds.

The best companies right now are ones that are the most self-sufficient.

“You may be lucky to have a well-funded VC backing you. But if you have the extra cash in the bank, it is a good position to be in.”

VCs need to remember that founders, right now, don’t just have to deal with their investors, but also their employees, their teams, the morale of the company, their own health, and, in this case, the coronavirus pandemic itself, Sanjay says.

Their job at this time is to make sure that their portfolio startups get through the crisis with all kinds of support – financial or otherwise.

Companies like Goldman Sachs, and McKinsey, and venture capitalists on the other hand, in the same bracket, put their skin in the game, but don’t build a single thing, Sanjay says.

"A VC doesn’t make anything. We put our brain power, goodwill, empathy, EQ and IQ, and all our intellect to help our founders. We are a collection of all our founders, so what they actually do is extremely critical in this crisis.”

“Our job is only to coach, mentor, and guide them. That realisation seeps in every day, (for me), that I am a coach and mentor,” says Sanjay, adding the need to coach and mentor, at this time, is more than he has ever felt.