Kushal Bagia talks about how First Cheque is investing in startups by leveraging founder-angel network

Kushal Bagia, CEO of First Cheque, says that the venture capital firm was conceptualised by Mumbai-based India Quotient to create a programme that will back founders through a network of other founder angels.

“We have backed almost 100 companies now through the first fund. We have seen startups from every possible sector of the ecosystem right from space tech, deep tech, AI startups, ecommerce, payments, fintech, edtech among others. We have got quite an opportunity to partner with great founder angels such as Fareed from Sharechat, Vidit from Meesho, Harpreet from CoCubes, Farooq from Fynd, and we are just learning from these guys who have already built and run businesses, working with them to support startups that they fund,” he says.

He reveals that the First Cheque is currently in the process of setting up its second fund, which is expected to go live sometime in December.

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Leveraging founder angel network

Kushal explains that First Cheque invests in companies founder angels in its network chose to fund. He says that the model has worked well for them and will continue to double down on the model to write bigger cheques in the future.

“We did basically, around 30-35 deals in 2019, 40 deals in 2020. And another 35-40 deals in 2021. Overall, about 45 companies from our cohort have raised follow on rounds and the number should go up soon. Most of our deals are pre-product, pre-revenue stage companies. What we have seen is that once we fund the company, they ship product, show some traction, and build out what they set out to do,” he says.

The average ticket size is around Rs 75 lakh per company, he adds.

Speaking about the evaluation process, Kushal explains that two things matter at First Cheque — size of market and quality of team.

“We look a lot at the quality of the team and the size of the market. Now, if the deal has come through a venture partner and if a venture partner knows the founder and is vouching for the founder then we will almost blindly invest. If the deal has not come through a venture partner and has come through our network, then we will apply our mind on what is the calibre of the team, we will do some research on market size to just ensure that this is a big space,” he adds.

In this episode of 100X Entrepreneur Podcast, Kushal Bagia, CEO of First Cheque, talks about the launch of the venture capital fund under the umbrella of India Quotient and how it invests in early stage startups.

To know more, listen to the entire podcast here.

01:19 – Background prior to First Cheque

03:00 – Various domains where they’ve invested

05:35 – Performance of the companies from Fund-I

07:48 – Change in valuations in early-stage funding

13:18 – Top performing portfolio companies

16:50 – First Cheque’s edge in early-stage investing

25:49 – Value addition by First Cheque to founders