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Angel Investing With Serial Entrepreneur Sunmeet Jolly

ValueWalk's Raul Panganiban interviews Sunmeet Jolly, Founder and CEO of GROTU app and 101 Islands.

Q4 2019 hedge fund letters, conferences and more

Interview with Sunmeet Jolly
 

Transcript

Hello podcast listeners. Today's very special episode with Sunmeet Jolly founder and CEO of GROTU. He's also the founder and CEO of 101 Islands. Sunmi brings over 16 years of angel investing experience. He is a graduate of the National Institute of Technology, Kirsch, Petra with a B tech and electronics and communications engineering. He also earned his master's of international business from Delhi University. In today's episode, we discuss his approach to investing in public markets and his way of investing as an angel investor. Welcome, send me to the show. And I want to welcome all our listeners to a very special episode.

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Welcome to ValueTalk with Raul.

Just wanted to welcome our listeners to a very special episode. I have Sunmeet Jolly. He is the CEO and founder of GROTU app. And then he's also entrepreneur and venture angel investor. So Sunmeet, welcome to the show.

Hello. Thank you for having me.

All right. Yeah, we can just begin with your background. And what led you to the investing field?

Yes, I have been in the United States for 20 years now. I grew up in India. I did my engineering as well as pursued a master's degree in international business in India, from your own schools over there. And once I came to Silicon Valley 20 years ago, I began investing in, in stocks in publicly listed equities. And then after four years or so, either In 2004, I started buying real estate, both internationally as well as in Silicon Valley. And from 2004 to 2007. I was active in real estate, buying and renting out properties here as well as internationally. And I had about six properties at a point wherein I was living in London then renting out the others. Or there were some which were under construction builders. So, you know, but it changed a little bit after the last financial crisis hit in 2008. And I consolidated my portfolio at that time, and I do hold some real estate now. But I don't actively invest or manage real estate apart from what I already have now graduated to early stage startup investing. Which is more risky and more rewarding as well.

All right. Yeah. How would you describe your approach to investing?

As far as early stage startup investing is concerned, it is a high risk game. So you have to watch you know, all the material, you have to read all the material including pitch deck, listen to the founders, look at their backgrounds, look at the company's intellectual property, etc. I mean, there's a list of factors that I see before I invest in that asset class. But my approach to investing generally is to diversify. So it's not that I have all my assets in early stage startup investing. I have a good mix of real estate gold some cryptocurrencies as well now and You know, then mutual funds and other safe assets in 401k and Ira, as well as, you know, a decent part of my portfolio in the early stage ventures. So it's a diversified portfolio. And that's what I recommend everybody. Don't put all your eggs in one basket in one sector.

Yeah and when you were investing in public companies, what was your idea generation process like? And did you screen person in financial metrics?

Over a period of time I have definitely I look at metrics, you know, in public companies, it's more than desirable that they are profitable. And we look for price to earnings multiples. If If a stock or a sector has fallen quite a bit, and it's become value, then we also look at, you know, tangible common equity for banks, or book value for certain companies have fallen and become value stocks. So that's value. So I do watch metrics. I look at the fundamentals of the business.

Alright, yeah. When you evaluate the early stage companies, and I said it was risky, but do you look at certain metrics for that? Or how do you generate those ideas?

So early stage investment is all about technology. And the founders dreams. I look at the founders, what they're saying how they're presenting, what's their background, and why they are doing such a tough thing. started finding and growing a startup is a very tough job. It is not for ordinary people. Several years you have to, you know, knock doors for raising money. You have to run a business which is profitable, you have to build products, which are unproven, you have to sell a brand which is unknown. You have to sell to customers, you know, something that they've not tried before, it is a tough job. So why is this founding team doing this tough job? What is it behind it? Do they have a purpose? You know, or are they experts in a certain field and the technology has evolved. So they're seeing that, you know, let's build something better, faster, cheaper. So, what is the founding teams motivation? And then how are they executing? You know, what traction have they built? What is the addressable market? You know, is their dream big this is Can this be a billion dollar company or more? What technology advancement are they doing in the current product which is not available in the previous period? Available or currently available products or services or processes? And then, you know, what's the problem and solution? Do I understand the problem too? Am I convinced that is the right solution for that? What kind of intellectual property that the founding team has built? Do they have any patents? Or is this product so difficult to build that it is creating a moat for any competitors? What are the barriers to entry, you know, for for this particular technology or for this particular product or service? How soon are they projecting profitability in the future, because we don't want to invest in companies which will keep eating money you know, at some point they have to have some profitability built into the system thereafter building this product and having so many customers then we will become profitable. So we have to project that and we have to be convinced Then founders management of investors money, you know, we all look for frugality in founders. No flashy offices, no flashy, throwing parties away with investors money, you know, those are all red flags. It's your dream, you want to build a dream you want investors to participate in building a dream, you have to manage their money very, very frugally. Because what if more money is not available in subsequent rounds for you, and you have to make the company profitable, so you know, how they manage their money? And then finally, what field are they operating in, you know, whatever the large companies with the traditional services or traditional model, who was whose business model is being disrupted. So if this team is disrupting somebody's business model, is that feeling large and rich enough to acquire or more Are there other startups which can be merged together to create a very big, multibillion dollar entity? So what's the probability of mergers and acquisitions for the startup? And again, what traction at the build for so far? Is the product ready? Is the product already available in market? Can we try the product? Can you see the demo? The traction? You know, and what are some early users saying about it? Those are some of the things I ran with.

When you evaluate the founder and their motivations to try to meet them in person before you invest?

I have met founders if the opportunity is there, this is sometimes what happens is there are investor breakfasts in which they are meeting the investors and then hold it either in their in their premises, office location or central place outside or many of them They're marketing their securities to a lot of people around us or globally. They do webinars. So webinars are very popular now.

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