Book review: Inside the world of startup investing

Investing in general, and startup investing even more so, is rarely about making informed choices as it is about making judgement calls. Judgement calls, or educated choices, involve extensive pattern recognition and developing views on the future of an industry based on several factors, some known and many unknown. It takes at least a decade for the outcome of one’s ‘judgement call’ to become visible. As a result, everyone in the startup world is living with an incurable impostor syndrome—and it is this aspect of investing that a new book of cartoons has captured. Every cartoon also has a question at the end that brings out the essence and a lesson on which the reader can reflect.

A tongue-in-cheek look at the world of startup investing, The Serious (Comic) Side Of Startup Investing is both hilarious and real. The authors run a growth stage venture capital fund, Alkemi Growth Capital, and have been through the whole nine yards of raising money from limited partners, investing in startups and dealing with founders, and in the process, getting a ringside view of every shade of human emotion that insiders are privy to. It’s a mirror to players in the ecosystem, who, while in the flow, are unable to view their own behaviours with objectivity. Humour is always a good way to reveal the funny side of life, while creating a little awareness about human psychology.

One can flip through this book in less than half an hour, though the insights remain much longer. Every situation that I have encountered in my many years in the startup world has been captured with humour and grace. As long as you do not take life and work too seriously, these cartoons will make you laugh out loud whether you are a seasoned investor, a unicorn founder, or an employee at a startup or a VC fund.

The artwork by Shreya T.S. captures the insecurities, posturing, ambition, greed, obfuscation, and the subtle deception of every player in the startup world. An ensemble of eight characters—two founders, two venture capitalists, two limited partners, one banker and one lawyer—represent the key players in the startup ecosystem. The discrepancy between what founders and investors say and do, the change in their behaviours before and after a fundraise, and the inherent herd mentality of investors couched in seemingly sophisticated investment theses are all well captured.

If there is a lesson that Goel and Aggarwal want to send, it is the same that one could take away from the lives of Warren Buffet and Charlie Munger: character development is key to success in investing. Every situation and every investment opportunity is different and unique, and it is near impossible to determine whether the outcome, which one sees years later, is a result of one’s choices or a consequence of chance and different factors coming into play. It is human nature to attribute a good outcome to one’s own choice and knowledge and bad ones to luck and chance. Therefore, investing is often a lot more about developing “character” than “intellect”.

Every industry and every profession tends to have its quirks and standard, unimaginative ways of doing things, which creates opportunity for humour—and this is a book that seeks to convey serious lessons through humour to anyone even remotely associated with the startup ecosystem.

T.N. Hari is executive chairman, STEER World.