Vishal Tripathi, investor at Next Legacy Partners, delves into venture capital dynamics, spotlighting Next Legacy Partners' unique blend of philanthropy and athlete-focused strategies. Vishal shares his journey into venture capital, underscoring the industry’s allure for innovation and human connection. He also discusses key insights including the importance for emerging managers to define their unique differentiation and adapt to investor preferences, evaluation criteria for managers, AI's transformative role, and the need for VC innovation amid challenges like prolonged private company timelines.
Vishal Tripathi, investor at Next Legacy Partners, delves into venture capital dynamics, spotlighting Next Legacy Partners' unique blend of philanthropy and athlete-focused strategies. Vishal shares his journey into venture capital, underscoring the industry’s allure for innovation and human connection. He also discusses key insights including the importance for emerging managers to define their unique differentiation and adapt to investor preferences, evaluation criteria for managers, AI's transformative role, and the need for VC innovation amid challenges like prolonged private company timelines.
In this episode, you’ll learn:
[1:20] Venture capital allows you to engage with and learn from driven entrepreneurs at the forefront of innovation.
[5:14] Next Legacy Partners mission: linking philanthropy, athletes, and cultural figures with venture capital.
[6:49] Define your unique differentiation as an emerging manager.
[10:27] Emerging managers should align their strategy with their unique strengths and personal approach, remaining open-minded instead of adhering to any one-size-fits-all model.
[21:39] Emerging trends in venture capital, including AI's transformative impact and the need for innovation to address challenges like liquidity and evolving market conditions.
[28:03] VCs should prioritize founders as their primary customers and focus their efforts on adding value to them.
The non-profit organizations that Vishal is passionate about: Anjali, Smile Foundation
About Vishal Tripathi
Vishal Tripathi is an investor at Next Legacy Partners. Vishal analyzes and oversees venture capital funds and industries at Next Legacy, leveraging prior roles as a portfolio manager at Plexo Capital. With a background in financial engineering and quantitative research at J.P. Morgan, he brings extensive expertise in capital allocation and early-stage venture capital. Beyond his professional endeavors, Vishal finds enjoyment in reading DC comics, watching UK panel shows, developing computer games, and avidly following Cricket and Chess.
About Next Legacy Partners
Next Legacy Partners is a venture capital firm formed from the merger of Legacy Venture and Next Play Capital. It stands out with its dual mission to connect the philanthropic world with venture capital (Legacy Venture's focus) and to bridge athletes and cultural luminaries with venture capital (Next Play Capital's focus). Next Legacy Partners is highly community-driven and distinctively focuses on established large funds, direct investments into startups, and emerging leaders in the venture capital industry.
Subscribe to our podcast and stay tuned for our next episode.
The GP came out of a big venture capital firm and he said that "I am not gonna take the traditional approach to venture capital. I am not gonna do what everyone else does. I am gonna have a functional approach to venture capital."
Gopi Rangan: You are listening to The Sure Shot Entrepreneur - a podcast for founders with ambitious ideas. Venture capital investors and other early believers tell you relatable, insightful, and authentic stories to help you realize your vision. Welcome to The Sure Shot Entrepreneur. I'm your host, Gopi Rangan. My guest today is Vishal Tripathi. He's an investor at Next Legacy Partners.
What is Next Legacy Partners? What is the mission? It's actually a mission driven organization. We're going to find out more about that. What kind of investments does he focus on? What gets him excited? He is also a gamer. If we get a chance, we'll talk about his passion for gaming as well.
Vishal, welcome to The Sure Shot Entrepreneur.
Vishal Tripathi: Thank you Gopi. Nice to be here.
Gopi Rangan: Tell us about yourself starting with where you grew up. You grew up in Calcutta, but you came to the U. S. to study and then you got a master's degree and eventually you made your way into the world of venture capital and specifically in the limited partner side. How did that happen?
Vishal Tripathi: Yeah, I was born and brought up in Calcutta, which is on the east side of India. I was born in a family of civil and mechanical engineers. So I ended up doing my undergrad in a place called Birla Institute of Technology and Science (BITS), Pilani, which is on the other side of the country in Rajasthan.
I did a chemical engineering degree, but I realized I love math. And at the same time in college, I was a part of the entrepreneurship cell there. And we did some amazing stuff. We ran India's first and biggest student run startup accelerator called Conquest. We had projects on rural entrepreneurship given where we were located.
So it was a really fun undergrad journey. After that, I joined JP Morgan as a quant in the commodities desk. I was majorly working on macro investable indices. So think risk premium strategies around commodities, bonds, credit, all those markets. I really enjoyed my work there. It was really high paced. I ended up coming to us to do my master's in financial engineering from UC Berkeley.
It was another very fun experience. I really enjoyed the people I had in the program and the Dean, it was really an active experience. I ended up working with Citadel for a brief period as an academic project but working on the same thing I did with JP Morgan, but on the equity side. So that was really fun, but I decided that I wanted to move to the private market; more a function of the innovation that was happening back then, but also a fact of, I thought, I still think my skillset could be really useful to this industry and I can make a change in one way or another. I was recruited by Lo Toney who runs Plexo capital. It's venture capital firm, which was spun out of GB.
And the strategy was to do LP investments and direct investments. LP investments in diverse emerging managers and direct investments sourced from them. More like a barbell strategy of extremely early and extremely late stage investments. It was really fun. I really enjoyed doing that. I got to meet you there and a lot of other great emerging managers through that journey of mine.
I ended up joining about two years ago, Legacy Venture, and now I'm at Next Legacy Partners.
Gopi Rangan: Fantastic. You started as a chemical engineer, but there's a streak of entrepreneurship there in college. Entrepreneurship has become a very popular career choice in India. And that was not the case until maybe a decade ago.
You were part of that movement of creating entrepreneurship as an attractive career choice for people. You deeply pursued your desire for quant. And now you're on the people side of the business. Emerging managers investing in venture capital funds is a lot about people. I'm curious to understand, what do you like about this asset class?
What gets you excited about it?
Vishal Tripathi: One of the reasons I moved to doing venture capital investments was the fact that it's very innovation driven. Something great is happening at the forefront of things every day and looking at emerging managers who are talking to these entrepreneurs who are changing the world in one way or another.
And it's great learning experience where you get to see real time innovation happening. You get to be a part of that. That is the most exciting part of this journey. And as you mentioned, it's a people's business. So you get to meet a lot of successful, driven, motivated people, and you get to learn from it.
So I like to say that I'm getting paid to learn, and that's the best thing someone can ask for.
Gopi Rangan: That is so true. These entrepreneurs are incredibly brilliant. They've researched topics and they're often the world's best expert on those topics. They have a point of view on where the world is going, and they are really changing the way we live our lives.
And we get to hear those stories. When you're an investor in this asset class you're pretty much at the forefront of innovation. You kind of get a peek into the world where it's going into the future. What is Next Legacy Partners? And how is Next Legacy Partners different from other limited partners?
Vishal Tripathi: Sure. So Next Legacy is a combination of two firms, Legacy Venture and Nextplay Capital. Legacy Venture is an early stage venture fund of funds started in 1999 by Russ Hall. It was out of Meadow Pickard, Iron Anderson, uh, one of the original venture capital firms in the Valley. The mission for Legacy Venture was to connect the philanthropic world to the venture capital world.
So there's a fund of funds where the fund had no carry and every dollar, every proceeds from every investment went to the various nonprofit causes our investors support. So that is what Legacy Venture has done for the past 25 years now. And it's been a great journey for us. At the same time, Ryan Nece started Next Play Capital with a similar mission of connecting the athletes and the cultural luminaries of the world to the venture capital world.
So both these firms are very community driven. And given how similar our communities are, how similar our mindsets are, the two firms came together and Next Legacy is a combination of Next Play Capital and Legacy Venture. And it's a great pleasure to be working with such a mission-driven and community-driven organization.
Gopi Rangan: You seem to have a method to attract, visionary leaders, or you are attracted by visionary leaders. You work with Lo Toney, you worked with Russ Hall. This new firm is definitely very different from other limited partner entities out there in the world. I understand that, uh, Next Legacy focuses on established large funds and also does direct investments into startups. And there's a third angle, which is focused on emerging leaders in the venture capital world. Can we focus on the emerging leaders? How do you define emerging managers? What is your advice to emerging managers when they're building a new firm?
Vishal Tripathi: That's a great question, Gopi.
Just to take a step back. At Next Legacy, we have three vehicles - one focused on the established managers, one focused on emerging managers and a direct co investment vehicle. But we've been doing emerging managers from the flagship fund forever. There's a very famous venture capital firm, which is top one in the valley right now with their first fund.
Actually, as a statistic, about 40 percent of the relationships we've had started off as an emerging leaders or emerging manager relationship. So we invested in their first three institutional funds. So for our emerging leaders funds, that's how we're defining emerging managers. First three institutional funds with step raised.
And yeah, I mean, we've been doing this for a while, so it's, it's really just spinning out that strategy and acknowledging the greater return potential for this specific strategy and the new environment which you've seen the second part to your question. Let me just preface that by saying how we look at emerging managers, like what are the kinds of different emerging managers out there?
The way I would define it is there are three major buckets. You've got the investors who have worked in big institutional shops. So they are great investors, but they've been a part of doing institutional rounds and institutional funds for a bigger fund, and now they wanted to start something of their own.
So those are the institutional spin out managers. Then you've got people who are great operators in the past and have great network because of that and have done some angel checks, but are known for their operator track record. Like someone like Kraft, something like Andreessen Horowitz, they had a great operator track record, and that is what they turned into the venture capital experience.
And the third, which is people who have got great network by being in the industry for long enough. They had some angel experience. They have a great network in a specific geography sector and then an expert there, and then they want to translate that expertise into a venture capital experience. So they start doing that.
So like those are the like three major buckets. Of course, there's a lot of overlap. There are operators who have been in institutional funds and some have great network, but those are the three big buckets the way we look at emerging managers and we invest in all three of them.
Gopi Rangan: Do you have a favorite among the three, the kind of VCs you like to invest in? Someone who's
Vishal Tripathi: done all three, that's my favorite. Like someone who's, who had a good operating experience, had a good network, angel network, and ended up doing a few years with a big shop. Those guys it's difficult to match their energy and it's easy to bet on them.
Gopi Rangan: What's your advice to a new fund manager starting fund one, fund two in this current market?
Vishal Tripathi: I think, Gopi, it's very important to define your differentiation. Both of us know what has happened in the past four or five years with the number of VCs that have come along, the number of emerging managers or established managers that have come into the space.
Defining your differentiation is something which is very important. When you are pitching to an LP, when you are pitching to a founder, for example, how would a founder know why should they choose you basically. A specific advice I would give to emerging managers, fund one managers is know who you're pitching to.
Like if you're going to an LP to pitch, my assumption right now is that you have some investor experience, so you're a good investor already. So now it comes to building a firm, forming a firm, and that is the area where an emerging manager in the fund one requires the most. My experience would be if you're speaking to a family office, know what they want.
If you're speaking to an endowment, know what they're looking for. How would you fit in that journey? If you're talking to a fund of funds, you need to know, "Oh, they already have these kinds of exposure and me bringing this will be beneficial for them." So like doing your research and homework before coming and pitching to an unlimited partner or using a network in an effective way, I think that's something which is very important and will be really helpful for first time fund managers for sure.
Gopi Rangan: It's difficult to evaluate opportunities to invest in startups. And it's even more difficult to evaluate emerging managers. There's another level of complexity there. How do you assess the quality of emerging managers? Now, how do you know that they are well differentiated? And how do you know that they have done the homework to understand who you are as a limited partner or other things that are on your mind?
What questions do you ask?
Vishal Tripathi: At the core of our business is how good of an investor you are can be defined by three or four principles. Uh, there are a lot of LPs who like to use the three S's, the sourcing, the selection, the stewardship. I would add another aspect to it for emerging managers specifically that is winning.
So it's sourcing, picking, winning, and value add. Those are the four pillars at which you're judged, wherever you are. And that is the core of venture capital firm. You need to have a clear differentiation or an answer to the question. What makes you special? What will make you be a 3X, 5X, 10X fund? Like what is driving for you?
So knowing that " i've got a great network. I'm a great sourcer. I can pick good deals. I can add value." But more importantly in this market, you can win those deals. Yes, you can see a great deal. Yes, you can pick, but when it comes to good, hot deals, you have a lot of managers with great names out there who are going to get in and get the ownership and you might get some token check.
I think a good emerging manager, when they are great at saying that, "Oh, this is why we're going to win. And this is why we're going to be awesome." I think that's a great answer. And I think that's a, create defining principle for them. And on the value side, it's an emerging manager who focuses on early stage needs to have a clear answer on what, like, you can give a generic answer for sure.
Okay. We just help the founders. We're going to call all the time, but having a structured approach to value add, given your time is limited is also something which at least I value a lot. I mean, on the early stage, you can help founders with customer introduction because you know the space and the founder might not, or you might know someone in the corporate space.
You can help them hire because they're a great builder, but they're not necessarily someone who can build a great team. And also it is your responsibility and role to connect those founders, entrepreneurs to the next set of big investors. That is where your network comes into the picture. And that's how you can help the founders.
So yeah, these are some small nuggets in which I, when I look at an emerging manager, I try to evaluate them.
Gopi Rangan: See sourcing, picking, winning, and value add. It's I'd say humanly impossible to be good at all four. What's most important among the four?
Vishal Tripathi: It's important to be great at one or two of them more than it is important to be.
could at any one specific things. There are great examples of funds where they have a great network. Like you think of YC has been the strongest brand, any, like they're differentiated in the way they have built their whole fund, their whole structure of the fund. Every inspiring entrepreneur uses that metric.
Oh, I want to go to YC. And even the successful ones, even, uh, Brian Chesky says, I'm a YC alum. So like that power of having the YC brand is something very important. Hence, they're very amazing at sourcing. Given they're amazing at sourcing and they have a, like, they just write common check across so many companies.
Picking isn't that important for them, but they're great at sourcing. So they ended up getting the great returns because they end up having a great model in which they get higher equity early on. There are good names out there who have defined themselves as saying, you know what, we're going to be founder first.
We're going to be value add. That's how Andreessen started. That was their whole thing that, Oh, I'm going to be founder first. Founder say anything I'm going to be supporting them. So that's the value add aspect. And they define themselves like that. And hence they were able to build a brand around it.
And there are people who are saying that, you know what, I know what the next big wave is. I know what's going to happen next. I have a great year on the ground in the venture capital space. I'm going to find the next Coinbase and I'm going to find the next OpenAI and I'm going to back them early on when everyone is saying no.
They have a contrarian view and that's where the picking ability or this comes into the picture. So yeah, like if you are good. at one, two, or all of them. That's a really great thing. As I said, it's very difficult to be great in all of them, but if you build a strong brand around one of them, that's good enough.
Gopi Rangan: This is a great way to double click on this topic. Very interesting. Thanks for sharing your candid thoughts. Some LPs like diversified portfolios, large number of startups in the portfolio and some LPs like concentrated portfolios. They want the GP to have high conviction with every investment. Where do you fall in that spectrum?
What's your logic?
Vishal Tripathi: I think it's very important in venture to be open to changing your views. When I started, coming from the quant space, I was very analytical and quant driven, right? And I remember like we've known each other for four years. So like in 2020, I remember speaking a lot on how having a diversified portfolio is very important, how the power law comes into the picture, which I still agree on, but I think my answer has been a bit more nuanced now.
As an LP, If I'm investing in a couple dozen firms or funds from within a fund, I have enough diversity. I want the manager to have high conviction bets because on my end, I am looking at multiple, many companies. So if each manager is doing a concentrated high conviction bet, on my end, I'm going to see the bigger winner that way.
So like, that's how my mentality has changed as an LP, as an allocator right now. I think it's important to have high conviction, but not like do five, 10 checks. Like there's a sweet spot for your strategy. Also when it comes to portfolio construction that way, we have a metric at Next Legacy, we use quite deeply.
It's called GP capital load. So it's a function of fund has how many GPs, what is their investing period? Is it two years, three years, four years, five years? And what is the fund size? Like what is the amount of capital is there deploying? And you just divide the number of GPs and you can, you can get a how much capital is a GP deploying in a year from within a fund.
So that is a good metric which actually compares apples to apples between funds. Like there are funds, some funds, which are sole GPs. So they have a smaller fund size. They're doing a smaller number of checks. On the other hand, there's another fund, which is, Oh, you know what? They have four or five GPs.
They have the ability to write that many checks, that many number of investments. So like this metric helps to push to apples comparison, but getting back to your question. Yes. I fall somewhere in the middle of that spectrum, more towards, 'go have conviction bets on your fund and let the diversification is something.'
Let it lie on us. Let us decide that.
Gopi Rangan: Let me push you a little further on this. Let's say there's an emerging manager raising a 20 fund one. What's the right number of startups in the portfolio?
Vishal Tripathi: Again, it depends. There are some who have a 20 million fund and you know what their whole thing is.
"I'm very good at getting into deals. I can get that 1 - 2 percent ownership and I can get early and that is my edge. Transcribed So your fund size becomes your strategy at that point in time. So then for you, if you're getting one, two, three, 4 percent ownership early on, get a bigger number of checks.
That's good. But let's say if you have the ability to get higher ownership, get 20, 15, 20 investments and get whatever amount of ownership you can get within those companies. Again, it's also dependent on the sector you'd invest in some sectors. It's super hot. The valuation is super high. You'll spend like, if you're investing in AI right now, and let's say you're a venture fund which just does foundation lab investments. It's impossible to do a check, like even one check with a 20 million fund and get a good ownership. So it really, I think one thing which I would push back to anyone who tries to put venture in a box is that it's a very, there's no one size fits all policy in venture. Everyone has a different strategy and you have to have an open mind to evaluate and hear out what makes them differentiated and why it will work for them.
When you're building a firm, you cannot build a firm on the mentality of, "Oh, this is what other people, LPs want to hear. And I'll get money and I'll get my fees." That's not how you build a venture capital firm. It's a function of, "Oh, this is what I'm good at. This is where I can derive value. And this is going to be my strategy.
Yes. 20 million fund. I'm going to make 10 investments, 2 million each, no reserves. That's going to be me." So like, that's one that works the other way. You can make 15 investments, smaller checks, have reserves. It's all across the spectrum. So there's not one answer to this.
Gopi Rangan: That's a very practical way of looking at it.
Yeah,
Vishal Tripathi: I've tried to put things in boxes and I've been proven wrong by thinking, Oh, this is the right way to do things. And then I've seen a success story coming, which is, which I wouldn't have looked at if I had my, you know, horses have blinds if I had my blinds on and I wasn't looking.
So it's really important to be open in venture.
Gopi Rangan: Can you give an example?
Vishal Tripathi: I think there are two examples. There's one which we recently invested where the GP came out of a big venture capital firm and he said that I am not going to do the additional approach to venture capital. I am not going to do what everyone else does.
I am going to have a functional approach to venture capital. I'm going to have one GP which just does sourcing, one GP for value add, one GP for picking, one GP for winning, and that's how I'm going to build my firm. Like that is differentiated enough and that's not common in the market. And if someone who's used to the artisanal approach, or this is the GP, he's going to source pick win. This is a left field for them. He's an emerging manager. He's on his fund too. I have huge trust that he's going to drive great returns because he's seen the space and he knows what's coming next.
Another example is a manager who is with a big shop, not necessarily venture capital, but a big name in venture capital. And they reached out to me because I have a systematic risk premium strategy background, right? I was a quant and they wanted to have a quant strategy for venture capital where they want to write smaller checks, multiple companies because of what the network they had and their brand name.
You know, the LPs, it was me from Plexo Capital and it was all hedge funds. It was WorldQuant, it was Two Sigma, like those are the names who came into that specific fund. That is differentiated enough. And I would have said no, because that's not something what venture capital is, right? It's, you just write small 10K, 50K checks in the companies and you spend no time diligencing.
Like that's again, another left field example, which if I had my blinds on, I would say, no, this is not normal. I'm not going to invest in that. And I have huge trust that both of them are going to be very successful.
Gopi Rangan: From your description, what I gather is that eventually it boils down to the personality of the GP. How they live their life, how they How they want to spend their time and how they want to allocate their bandwidth.
Who do they want to associate themselves with? And that changes from person to person. Some people like very good personal brand building, and they are able to source extensively far better than anybody else. And for them, it makes sense to build a diversified fund with a lot of bets because that's what they're good at.
And picking doesn't matter as much to them because they're able to get access to good deals anyway. And for someone who wants to have a very deep tight relationship with founders and they really like the art of building a business from scratch, they spend a lot of time with every company. Every investment is an important investment.
It's a high conviction investment, not to say that for diversified managers it's not an important investment, but it's as they spring into many, many companies. So compared to that high conviction, large check investor, has much more concentrated portfolio and they spent a lot of time with the founders.
They really know the founders very, very well. And if the personality of the GP is that it makes sense for them to let the firm display their personality.
Vishal Tripathi: Play to your strengths. That's the whole game.
Gopi Rangan: What are some things that you're really excited about in this asset class? What are trends that you're super bullish on?
Vishal Tripathi: The thing that has changed again in the past year is, and I know everyone who's listening to this, you included have been like bored by this word now, but AI is revolutionizing the way companies are being built moving forward. It's a different landscape. They don't need that much capital.
They don't need that much human. The way they're building company from ground up is entirely different. We're in a new era and I'm expecting that we're going to see a similar innovation revolution in this asset class itself. We like to invest in innovation and we haven't seen many great innovation within our asset class in a long time.
I think this we are at the precipice of some sort of a differentiation coming out in our asset class, you are seeing companies are staying private longer. You're seeing a lot of secondaries happening. So the liquidity problem is being solved in one way or another. You're seeing funds focusing on, "Oh, we're going to do a specific geography or a specific sector really well."
So I'm excited to see what new innovation comes into the asset class. Maybe you know what it's going to be one person venture capital firm; everything is outsourced, everything is handled and you have a platform and you can invest in that asset class in a very efficient way.
There is a good case to be made that there are going to be a lot of incubations happening within venture capital firm. Basically i'm excited about what's going to happen next. I am very confident that someone who's open to change. That's another thing for emerging managers - markets change very quickly.
And one the very important factor on how good you are is how quickly and well you adapt. If someone who's married to their principles, to their thoughts in they're not willing to even change, that's not a good recipe for success for sure. So I'm excited for this new innovation that's going to come in the venture capital space.
The new players who are coming along, the new strategies. Yeah, that really excites me.
Gopi Rangan: So from a technology perspective, AI is changing many things. And it is likely to transform how we live our lives, how businesses are run. That is a very big trend that will have an impact on how this asset class shapes up over the next 10, 20 years. I can see that. You're also excited about many new things that are happening in the industry.
New emerging managers coming into the sector from all the three different types of VCs that you described earlier. But you did mention a few things that could be potentially problematic or is actually very problematic today, which is companies staying private longer. As an LP, do you worry about liquidity? Do you feel like we've gone too far on that, where startups used to take six, seven years to go IPO, and the IPO market is not as attractive, M& A is 80, 90 percent of liquidity opportunities, and outside of these two, when companies stay private longer and longer, like more than 10 years, sometimes even 12 years, how do you optimize for liquidity?
Vishal Tripathi: That's a very interesting point you've mentioned, Gopi. Another thing I would add to that is. You know, back in the day, you could go public with 150 million of revenue. Now it's impossible. Like it's, you start thinking of when you reach the 200 million or 500 million era, that's when you think about going.
So there was a point when the public markets were putting money into growth and creating value. Now it's just a function of liquidity and you have venture capital, which is backing growth. So yes, the companies are staying private longer and yes, that is a problem from a distribution point of view for LPs for sure.
We've seen funds which have stayed active way past their 10 year life, 15, 16 years, and they're still active and they still have some stragglers in their portfolio. But what I think is changing is a lot of liquidity options coming into the market. You're seeing a lot of secondary specific funds.
So the thing that secondary market defines is you can get liquidity, but you have to pay a price as a discount to it. So what changes is what is your TVPI might not become your DPI. Like that's going to be a shift. So people will value DPI a lot more and in their heads moving forward, given the company was staying private longer, they're going to have a discount to the TVPI on what they're going to get.
So that is a function that will change. But yes, if you want access to the asset class, if you want access to the growth, you can no longer get it from public markets. So it's going to be stupid to just say that because the companies are staying private longer we're not going to have any access to the venture capital space when that's where all the magic is happening.
So yes, this is a problematic trend, but we are seeing solutions in one way or another. I think the way the market behaved in 2022, no one was ready to go public, but I'm seeing glimmers of hope. Once you have these big leaders go public, you're going to see a lot more companies follow them. There's going to be an, um, as I said, once you're through the growth, now you need liquidity.
That's when public markets come to the picture. And apart from that, the market is very resilient. We've seen various solutions come into the space. There's of course, M&As, you're seeing these big companies have a ton of cash on their, on the balance sheet. What will they do? I mean, the two things they're doing is they're buying up companies and they're just holding on to cash. That is not what your investors want. So I think that's a solution that will happen is you'll see a lot more M&As. You'll see a lot more consolidation, which probably is a worry point in terms of if only the big players are out there having all the monopoly and power and like new industries.
Yes, it gives liquidity, but it stops the big Googles to be formed. So yeah, that is a problem I think, which needs to address, but I'm a very optimistic person by nature and I am being in public markets. I'm well aware that public markets are very resilient and that things work out one way or another.
Gopi Rangan: The early investors, the founders, and retail investors who are not able to capture value creation in the public market, they are at a significant disadvantage when companies stay private longer and longer. Founders aren't able to get liquidity. Early investors aren't able to get liquidity. They're limited partners. Aren't able to see DPI that, uh, we have to find a solution to make this industry more robust, not leave it up to 12, 15 years. And eventually when companies go public, that's when retail investors eventually get access to innovation, essentially. Well, let's hope that we can march towards a better model for this industry. That's a very,
Vishal Tripathi: that includes the innovation point I was talking earlier. There are going to be innovation through this as well. I think AngelList was a good example back in the day where they allowed a bunch of retail investors get in the asset class. So yeah, that is the another aspect of innovation which I'm expecting and hoping Venture Capital to have.
Gopi Rangan: So besides this one, this topic, is there anything you would like to change or you would like to see change happen in this industry to make this asset class better?
Vishal Tripathi: When we started this podcast, I use the term of truth seeking. Like that is what our role is, right? As venture capitalists, both on the LP side, on the VC side, on the founder side, that's truth seeking.
If people are aware of who their actual customers are, I think that is gonna be the success factor for we see their actual customers. They think it's the LPs, but it's actually the founders. That's where the value is being generated. Even as an LP, I have a close eye and a ear on, "oh, this company is doing great and this is what's gonna be the fund returner."
There's a term called uni unicorn. There's a term called Dragon, which returns your whole fund. So I think one thing which I would want. In good conscience in the venture capital in the GP's mind is know who your customers are and focus your energy on them. Do not change your story to raise money for fees. Fundraising is difficult for everyone, but you have to have your true north star in your head You know what entrepreneurs that's why i'm doing this.
That's what excites me the most That's where i'm gonna spend most of my brain power and time on
Gopi Rangan: Pretty much every VC says that they are founder focused, but the reality is not true. There are only very few VCs who really consider founders as their customers. And I call it like they're in the business of selling money to founders, not generating returns for LPs, which is also important, but they, Those VCs do not think of LPs as their first customers.
They think of founders as their first customers. It's hard to differentiate and find out who's actually thoughtful and conscientious about approaching this the right way. It's a difficult role to play as an LP. Yes,
Vishal Tripathi: it indeed is.
Gopi Rangan: We're coming towards the end of our conversation. I want to ask you about your community involvement. Is there a non profit organization you are passionate about? Which one?
Vishal Tripathi: That's a great question, Gopi. Mental health and teenage mental health is a cause which is very close to me. There's a non profit in Calcutta where I grew up called Anjali, which I support.
There's another one in Delhi for welfare for children, youth and women called Smile. So those are the two causes which I support. And also, like I began talking about Next Legacy as a flagship fund, giving away the capital to the various philanthropic organizations. If you come to our office, you'll see these storyboards of all the nonprofits we've supported.
So every time, every day I walk into the office and I see one cause out there, it makes my heart feel good. It makes me feel happy about what I'm doing and it makes me feel good when I go back to sleep. So yes, the nonprofit support in India, Smile and Anjali and the work which we do, every dollar goes to the various different nonprofit causes.
And that gives me a lot of happiness.
Gopi Rangan: Next Legacy is truly a mission driven firm and your work has an impact on people's lives all over the world on a daily basis. Well, Vishal, thanks a lot for spending time with me today and sharing candid thoughts as an LP. It's very rare to find an LP who is willing to share their experiences based on their own practical lives.
It is great to be able to get that wisdom from you. It'll be super useful for many emerging managers who are building new firms. I look forward to sharing your nuggets of wisdom with the world.
Vishal Tripathi: Thank you, Gopi. It's a pleasure being on this podcast.
Gopi Rangan: Thank you for listening to The Sure Shot Entrepreneur. I hope you enjoyed listening to real-life stories about early believers supporting ambitious entrepreneurs.
Please subscribe to the podcast and post a review. Your comments will help other entrepreneurs find this podcast. I look forward to catching you at the next episode.