Beyond business models and revenue projections, it is the passion, energy and tenacity of the entrepreneur that makes investors bet on a startup, venture capitalists were unanimous in their opinion when asked about their investment theses at the News Corp VCCircle Startup Summit 2017 in Mumbai on Thursday.
"About 75% of our cheques are on passion," said Rehan Yar Khan, managing partner, Orios Venture Partners, adding what matters is whether one is able to hold out in the face of challenges like extreme competition, regulatory hurdles and attrition.
Khan was one of the early backers of cab-aggregator Ola and enterprise IT company Druva. His investment of around $100,000 in Ola, which he made six years ago, is now estimated at around $40 million. "They had a lot of passion and capability," he said of Ola, which was valued around $6 billion when it last raised money.
He dismissed the public perception that Ola has copied the Uber model of cab aggregation. "It was an original idea. Ola is incorrectly perceived to be a copy of Uber. Our angel investment in Ola was pre-Uber. Uber’s early model was black cars and limos; Ola’s model was mass-oriented," Khan said.
He added that Uber was at a very early stage and had just raised seed funding when Bhavish Aggarwal and Ankit Bhati launched Ola. "They quit very good jobs to do this and the fact that they were computer science graduates was helpful as they could manage problems at large scale," Khan said.
According to Sandeep Murthy, partner at venture capital firm Lightbox, it is the energy of entrepreneurs that attracts investors. "There’s not a company we have invested in the last 12 years that’s gone according to the plan that was laid out. They wouldn't have survived downturns if they weren’t committed. They succeeded because they were tenacious," he said.
"What we look for, and this varies from fund to fund, is whether we can really buy into that vision and whether the founders really have the energy to make that happen," Murthy  added.
In investment decisions, the wavelengths of investors and startup founders matter a lot, said Sateesh Andra, managing director, Endiya Partners: "In the last 10 years of my career as an investor, I have seen that the decision to invest or not is made in the first ten minutes of the first meeting."
Angel investor Sanjay Mehta said his key priorities were the money-making potential, the founding team and deal terms. "I look at three key questions. Is there money to be made? Can these people (founders) help me make money? How much can I make (deal terms and valuation)?"
As for the downturn in startup funding, Manish Taneja, founder of beauty and grooming products marketplace Purplle.com, said the current phase is good as it makes startups focus on their core business and address tough, existential questions.
"In a way, it is a very good time. Survivability and sustainability are the key challenges now. Those who survive through this tough time are bound to do well later," said angel investor Anand Ladsariya.
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