'Experience, strong economics': TVS Capital's Gopal Srinivasan on what he looks in start-ups before investing

For investor, entrepreneur and a scion of the TVS family, Gopal Srinivasan, companies being EBITDA positive is an important criteria he considers while investing. “Strong economics, EBITDA positive companies, strong ability to scale, and experienced entrepreneurs,” is what Srinivasan looks at. He told Business Today on aspects he looks at while investing in start-ups at the TiE Global Summit 2022 in Hyderabad. 
 
He is the Chairman and Managing Director of TVS Capital which invests in Series B-funded companies. Srinivasan is also a Senior Board Member of Indian Private Equity and Venture Capital Association.
 
Elaborating on what kind of start-up entrepreneurs he would like to invest in, Srinivasan said that he looks at individuals who are “experienced” or have “worked in corporates.”
 
He also shared his thoughts on the ongoing lay offs happening across different industries across the globe. From BYJU’s to Unacademy, OLA, OYO, and several others announced layoffs as part of “restructuring exercises'' or due to “funding winter.” In addition, prominent tech giants like Amazon, Hewlett Packard, Meta, Twitter and others also laid off employees citing prevailing market conditions as the reason.
 
Calling the lay offs “cyclical,” he said this is a time of market correction wherein valuations are also getting corrected. “Remember what happened in the 2008-2009 crisis?” He cited the example of the real estate bubble burst to explain the current situation.
 
“Money has become expensive, return expectations have gone up and therefore the valuations have come down,” he told BT.
 
Srinivasan also noted that whatever is happening in the ecosystem at present is not just a “start-up problem.” He said, “We should look at the macro-economic cycle from a monetary economic perspective.”
 
Srinivasan has founded several businesses across sectors such as technology, financial services, auto components, and more in his 30 years of experience. He has invested in start-ups such as WebEngage (SaaS), Vivriti Capital (fintech), CredAvenue (fintech), HealthifyMe (healthtech), Wondrlab (SaaS), and many others. 
 
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