Why is the funding required & the scale of the amount? — While bootstrapping primarily involves making use of past accumulated profits as well as existing reserves for meeting the funding requirement, presence of external investors in case of Venture Capital means involvement of third party players. Generally a new startup company with sizeable requirements for entry finance will need to secure external deals & investors to run their business. This often means that newly launched ventures will often need to rely on VC funds and other outside sources.
Founders are often faced with the nagging question of whether Fundraising or Bootstrapping is the best choice for them. What is better, having access to capital or maintaining full control over your vision and profits? What is preferred, to have the seasoned oversight of an experienced investor, or to plow forward with a disruptive and pioneering ‘can do’ attitude? Of course, every situation is different, but what standards can be used to help a founder decide? As a part of this series called “Venture Capital vs. Bootstrapping: How To Determine If Fundraising Or Bootstrapping Is The Right Choice For Your Startup”, I had the pleasure of interviewing Vijay Valecha.
Vijay Valecha is the Chief Investment Officer at Century Financial, a key position he has held since January 2015. Vijay has over 14 years’ experience trading the financial markets, with a deep knowledge of both fundamental and technical analysis, specializing in asset management and derivative trading.
In his current role, Vijay tracks economic and market trends for global markets, bonds, shares, commodities and currencies, formulates trading strategies and plays a key role in educating clients. He also frequently produces research reports which give an in-depth look at topical financial and economic events that have the potential to impact regional and international markets. He works closely with clients to help them understand their risk and return expectations and provides support to novice and experienced traders, HNI investors and corporates.
Vijay is very passionate about spreading the critical message of prudence in money management and is especially interested in the economy, behavioral finance, fin-tech, retirement planning, systematic & modeling methods as well as short-term trading and long-term investing strategies. He has delivered several seminars on trading strategies and technical analysis and has been regular contributor to business channels across the country.
Before joining Century Financial, he spent over 5 years as a Financial Analyst in firms like Edelweiss (India) & Hira Global DMCC (Dubai) and as a quant analyst at Rasmala Investment (DIFC).
Vijay holds an Engineering degree from Mumbai University and an MBA with a specialization in Asset Management from ISBM. He is also a certified Financial Risk Manager.
Thank you so much for doing this with us! Before we dive in, our readers would love to learn a bit more about you. Can you tell us a story about what brought you to this specific career path?
As an individual, I have always been a calculated risk taker and adventurous in nature. The current competitive world requires an individual not only to be passionate about his/her own career but also think out of box for further professional growth. What this implies is that you can only be successful if you believe in your dream & stick to your passion. Skills & experience are added qualities that support the career growth.
One of the major events that had helped me to gravitate towards the field of global financial markets is the GFC crisis of 2007–2008. This event highlighted how bad things can get if proper risk mitigation measures are not followed. On the bright side, the crisis gave rise to new investment & funding opportunities for startups. On the investment side, major global blue-chip stocks were available at lower valuations. This included companies with sound business model & financial valuations. On the funding side, major unicorns at that time including Uber, Airbnb started riding to prominent success. Today, these companies products & services are being used across the globe with company valuations itself at billions of dollars. One of the key opportunities that I saw post this crisis was the amount of returns & rewards the financial markets can give over a longer term. While not restricted to personal investment, the growth avenues for investing in global markets are broad & diverse in nature. One needs to especially focus on the risk & reward part by balancing out both to get the desired outcome.
Can you share a story with us about the most humorous mistake you made when you were first starting? What lesson or takeaway did you learn from that?
During my initial days of career, I always used to get carried away by multiple data points & news that was not even relevant to the investment decision I was about to make. While in some cases this relied on free tips or even blogs that appeared to make you rich investors, in majority of these I had no proper plan & strategy chalked out. This is still the scenario with majority of the prospective & new existing investors who have little knowledge of the markets & are often being pressured to buy complex products.
One of the key lessons that I have learnt is to always keep your eyes & ears open. Not following anything blindly but also doing your own analysis is critical in our markets. The whole concept of ethical investing also comes in to play where the investment firm or the brokerage is required to act in a proper fiduciary manner towards his client.
You are a successful business leader. Which three character traits do you think were most instrumental to your success? Can you please share a story or example for each?
3 of the most desired character traits for successful business leaders include — Warming up to new ideas, Balancing confidence & attitude, Unite employees towards a common goal.
Warming up to new ideas — A business leader always has to be on a lookout for new avenues of income & growth. This involves braking down complex things to simplest execution paths. As an example, CEO of a global multinational organization may decide to expand into new territories where there could be initial resistance. This could be on account of local population feeling threatened as well as other barrier of entry. During such times, the CEO has to be open and willing to be criticized & even look to decentralize some of his power.
Balancing confidence & attitude — This involves the business leader neither appearing too brash nor too low in confidence when carrying his authority around. A successful business leader always sets higher standards for his fellow colleagues and imbibes the culture of team spirit & humility.
Unite employees towards a common goal — A newly appointed business leader who has just joined the management ranks would be wise to understand the binding factor & driving force behind the organizations success. At the core of any organizations growth & success, there is always the human capital that has contributed towards the organizations brand. A business leader who can unite his employees under a common mission can than easily delegate work & responsibility to achieve the maximum outcome.
Are you able to identify a “tipping point” in your career when you started to see success? Did you start doing anything different? Are there takeaways or lessons that others can learn from that?
One of the key factors to understand the tipping point in your career is when the job starts affecting your personal & professional life. An individual whether salaried or self-employed will often find it difficult to segregate personal life from professional life. For a salaried individual, the pressure can be sometimes even more considering factors like peer pressure as well as legacy hierarchy issues.
For me, in such situations, I have always tried to be open to acknowledge the problems & think about probable solutions. This has involved me working on my own personal self as well as taking feedback from fellow stakeholders. This includes involving people from both sides of hierarchy — top as well as bottom. The key takeaway would be clearly understanding the source of negativity & keeping an open mind to come up with probable solutions. A successful business leader always needs to understand the repercussions of his words & actions on the entire organizational system.
None of us are able to achieve success without some help along the way. Is there a particular person or mentor to whom you are grateful who helped get you to where you are? Can you share a story about that?
One of the persons I have looked up to in my career is CEO of our group Mr Bal Krishen Rathore. With over 2 decade’s worth of experience in these markets, his distinguished career & legacy experience has helped shape up our group’s vision & value statement. Not only have we benefited from his individual decision making, but we also look up to him during difficult times.
In the past there had been a scenario where our group’s brand image was being tarnished by certain individuals owing to various spoofings & hacking attacks. It was during these times that Mr Bal Krishen reminded us of the importance of being patient & clear in our approach. Our core group values of honesty, ethics & loyalty helped us in a long way to get the message out to the markets.
You have been blessed with great success in a career path that many have attempted, but eventually gave up on. Do you have any words of advice for others who may want to embark on this career path but are afraid of the prospect of failure?
The world of financial & global markets is primarily based on unpredictability & uncertainty. The key over here is timing & understanding the probability of things failing fast enough. Since the global investment markets are ever evolving & dynamic in nature, there is little room for complacency and boredom. Due to the risk element present, there will always be periods of ups and downs in this domain’s careers.
Before entering this field, one needs to be passionate already or develop enough enthusiasm in order to challenge himself in the competition. Skills & experience will only act as a subset towards further success.
Ok, thank you for that. Let’s now jump to the main part of our discussion. Can you share a story with us about your most successful Angel or VC investment? Or an investment that you are most proud of? What was its lesson?
I am currently engaged in two ventures that are at a initial stage. First one involves Blockchain technology & the other one relates to online gaming & sports trading. Going ahead, Blockchain based technology will likely become the business norm with more & more companies expected to explore solutions in this space. Online gaming & sports trading still happens to be a relatively untapped market segment in this part of the work & one that could provide immense growth opportunities.
Super. Here is the main question of this interview. Let’s imagine that a young founder comes to you and asks your advice about whether Venture Capital or Bootstrapping is best for them? What would you advise them? Can you kindly share “5 things a founder should look at to determine if fundraising or bootstrapping is the right choice”? If you can, please share a story or example for each.
Some of the key points that need to be considered before the appropriate path is chosen include –
- Why is the funding required & the scale of the amount? — While bootstrapping primarily involves making use of past accumulated profits as well as existing reserves for meeting the funding requirement, presence of external investors in case of Venture Capital means involvement of third party players. Generally a new startup company with sizeable requirements for entry finance will need to secure external deals & investors to run their business. This often means that newly launched ventures will often need to rely on VC funds and other outside sources.
- Control of ownership — A VC fund will get involved with business decision making & overall company affairs once their own money is at stake. This would often mean the current business owners having to relinquish their existing control to make space for other investors.
- Requirements for outside references & networking — A business that is heavily dependent on new growth avenues & markets will need to involve certain key prospective players present over there. This would also come with additional economies of scale in helping the business to grow further.
- Extra — Credibility — Presence of large scale & well reputed VC funds just adds more value to the brand image of the startup. This will be especially critical when the company is trying to raise further funds in the form of debt financing — bond sale, bank credit or equity financing — IPO.
- Expert Resources & Professional Help — Presence of large scale VC fund also ensures availability of various other technical & human resources. This is especially critical when the underlying startup is trying to enter into a niche segment that is likely to turn competitive in the near future — e.g Cloud computing which was once considered a niche field has become the common market place for all major companies. Today, the technology is being used by an individual email user to large scale corporate for storing & accessing their data anytime online.
You are a person of enormous influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
The advent of new & multiple trading / investment platforms has altogether raised the bar on how the products are sold & marketed. We have all seen multiple cases of people staking their entire savings & income to get rich in these markets.
This has often seen mistakes being committed from both the product sellers as well as buyer’s side. Never before has the need for ethical investing been more urgent.
While ethical investing not merely comprises of sustainable products based on political, social or religious values, it also implies selling the right kind of solution to the desired target market. Today’s investing world is filled up with new & complex investing products like crypto currencies, SPAC’s & other derivatives. Making the target market understand these to their fullest extend while ascertaining the clients risk capacity should be the focus for all key stakeholders.
We are very blessed that a lot of amazing founders and social impact organizations read this column. Is there a person in the world with whom you’d like to have a private breakfast or lunch, and why? He or she might just see this. 🙂
Satoshi Nakamoto — Person/Group believed to be the original creator of Bitcoin. Although his/her identity is still in the darks with many conspiracy theories around, I look forward to having a private chat with this person and understand his initial thoughts and rationale of creating such a concept. Now that Bitcoin is making new highs, the markets have already started to digest the emergence of such technologies.
How can our readers further follow your work online?
You can get in touch with me through LinkedIn https://www.linkedin.com/in/vijay-valecha-frm-64118b15
Or through our company website and social channels:
Thank you so much for this. This was very inspirational, and we wish you only continued success and good health!