Chase purpose, not valuation: Multiples' Renuka Ramnath

Looking out for shareholding over the success of the company is a grave mistake for startup founders, says Founder and CEO of Multiples Alternate Asset Management Pvt Ltd, Renuka Ramnath. 

“The day you register the company, dissociate yourself as an individual from the company as an entrepreneur. Think of it as a child you are here to give it soul,” Ramanth told Shradha Sharma, Founder and CEO of YourStory, in a conversation at TechSparks Mumbai.

Ramnath told YourStory that at the core of any investment by Multiples is the ability of an entrepreneur to build an enterprise. 

Key criteria for evaluating a potential investment include the outlook of the entrepreneur, she says. “How do you bring a balance between not compromising the enterprise and being compassionate to people, how do you think about partnerships for payments, technology, supply chain, etc, how do you operate with the spirit of partnerships…,” were key to the private equity fund, Ramnath said.

Apart from these metrics, thinking early on about governance and building agility to shrink operations ahead of bad times make for a sustainable entrepreneur. 

With the number of overall funding deals falling and valuations coming down to reach a steady state, Ramnath from Multiples expressed distress about the effect of capital dumping in 2021. 

“The hubris I have seen in public markets and the steep correction is what we are seeing in private markets now because private markets are big….I was deeply distressed by the behaviour of some investors from my community. By dumping funds on startups, they have destroyed the value of other companies,” she added. 

While Ramnath says that the Multiples team believes in bringing both heart and the mind to work as investors, her overall message to startups is to chase purpose over valuation.