E107: Rahul Chowdhury (Managing Partner, N+1 Capital)

Rahul Chowdhury is the Managing Partner at N+1 Capital, India’s first revenue based debt fund. He brings 18+ years of intensive entrepreneurial and operating experience. He is a two-time founder, having founded and sold DenuoSource, a Chicago-based data analytics firm, in 2011. He later founded Reboot, India's first refurbished IT asset lifecycle management firm.

How does revenue-based-financing (RBF) work?

N+1 will provide startups access to capital, at a premium, without taking any equity share or collateral from the company. Further, it collects a percentage of the borrowing entity’s monthly revenues to pay the capital back, and gives steady returns to its limited partners on a quarterly basis. Unlike venture debt firms, N+1 isn’t dependent on future fund-raise of the startup, but will invest on the basis of its revenue outlook.

Episode Notes:

What motivated Rahul to pursue a career as a venture capitalist? (3:38)
The impact of Rahul's operator journey on his venture capital journey (6:02)
With whom does Rahul do business? (12:50)
Key characteristics of successful entrepreneurs (15:41)
Rahul’s decision making process (23:10)
How important are metrics and numbers in investment decision making? (35:40)
How does Rahul view black swan events and their impact on predicting the trajectory of startups seeking revenue-based financing? (38:18)
Evaluating businesses of varying sizes with respect to revenue based financing (45:31)
How significant is TAM to a revenue-based-financing investor? (55:20)
Challenges of revenue based financing in India (58:38)
Why VCs like to collaborate with a revenue-based-financing firm? (1:04:20)
What were the LPs' concerns about a revenue-based-financing firm? (1:09:51)
Personality-Fund-Fit for a fund manager (1:15:35)
Things about India that continue to surprise Rahul (1:21:28)