Private Capital can not only help revive struggling companies but also nurture industries that are solving some of the biggest problems in agriculture, food security, healthcare, and financial inclusion.
Anuprava Chatterjee, our next pathbreaker, Final Year Student at IIT Kharagpur, works as Senior Associate at GradCapital, India’s 1st student-run VC fund that invests in student startups.
Anuprava talks to Shyam Krishnamurthy from The Interview Portal about personal experiences that led him to the field of Entrepreneurial Finance, specifically Private Equity, Venture Capital and Investment Banking.
For students, college is perhaps the best place to explore your interests and narrow down on what sticks with you, because you don’t have any responsibilities and should utilize this freedom to the limit.
Anuprava, Your background.
I grew up in a small town in West Bengal, India, named Durgapur. My dad is an ex-failed entrepreneur, currently working in a steel manufacturing corporation, while my mom is a homemaker. The failure of my dad’s businesses led to acute financial instability early on in my childhood. Right from my Dad sacrificing his holidays for extra cash, using the same old TV for 25 years, to not taking a family vacation in 17 years so as to save money, we as a family had to take every decision keeping our financial feasibility as an important metric.
Nevertheless, my parents always pushed themselves to their limits for my upbringing, giving me the best possible facilities that they could possibly give. I was enrolled in painting classes when I was 3, which shaped my creative thinking abilities and trained me to wildly imagine.
Apart from school, since I was home-tutored by my parents and my dad was excellent in science and mathematics, I naturally developed a fascination for these 2 fields and decided to dig deeper into them. I fell in love with numbers, complex models, and the mechanisms behind the seemingly magical occurrences in our day-to-day life.
It was Class 9 when I realized that being excellent in studies is the most risk-adjusted way to get rich in life. That was when I started pushing myself to the limits. I worked day in and day out to really excel in whatever life threw at me and earn that ticket out of the rabbit hole that we were in.
What did you do for graduation/post-graduation ?
After working hard for 4 years, I managed to crack IIT-JEE, one of the toughest engineering entrance examinations in the world. I got my seat at the Indian Institute of Technology (IIT Kharagpur), a regular name among the top 3 best colleges of the country and world-renowned for its rigor.
I was enrolled for a bachelor’s degree in Instrumentation Engineering in the Electrical Engineering Department, which I later converted to a 5 year integrated dual degree course, thereby also completing my post-graduation in Signal Processing Engineering along with my bachelors.
If we try to graph the performance and profile of a college student on any given year on the Y Axis with that particular year on the X Axis, it usually rises exponentially till the pre-final year and plateaus (reaches a constant amount) in the final year. This is because you slowly get better at the thing you are working on as you get more senior, and in the final year you assimilate all of them for your placements.
Since, I just figured out my final passion in my pre-final year, I wanted to stay on the exponential growth bandwagon for one more unit on the X Axis, and hence wanted to extend my stay for one more year so that I reach a better peak before appearing for campus placements. I got to do 2 more international internships, 3 more competitions and joined gradCapital to hone my experience and profile in that extra year. This enhanced the final constant resting value of my profile by a huge margin, and hence assisted me in clearing the threshold profile and skills that the investment banking selection procedure demanded.
Regarding the actual specialisation which I did in Signal Processing, as a finance professional, your thinking capabilities will widen if you know about a lot varied fields in depth. “Jack of all trades, Master of some” is the rule of the game here. So, I guess my master degree won’t go to waste hopefully 😀
How did you plan the steps to get into the career you wanted? Or how did you make a transition to a new career? Tell us about your career path.
My first year at college was weird in an interesting way. Until now, I was dead set to get into the college of my dreams, so my goal was quantifiable and distinct. This was the first time in my life when I didn’t have a target painted for me to shoot. But once I was in college, there were innumerable pathways that were equally good, that I could have taken, countless purposes that I could have pursued, and made a decent living out of, thereby solving our financial issues.
So in the next 5 years of college, my aim was to narrow down on that one career that makes me tick.
To solve this, I chose a very scientific approach.
There were 3 fields I was fascinated about pursuing:
- Electrical Engineering and Deep Tech: Since I was majoring in this.
- Entrepreneurship: Since we had an obvious apprehension about businesses after our bad experiences, I wanted to test that hypothesis of ours.
- Finance: Since I had a love-hate relationship with money, I wanted to dig deeper into my fears.
To explore each of these, I did the following:
- Electrical Engineering and Deep Tech:
I interned at the Slovak University of Technology in Slovakia in a data science project which was about detecting iron samples in brain cells for early prediction of Alzheimer’s. My work was to analyze tons of data points and find patterns. I realized that I wanted to work on something that encouraged me to think about the bigger picture and not pigeonhole myself in the nitty-gritties of innovation. So, I rejected this field.
In the meantime, I also decided to try my hands at entrepreneurship since my dad failed in it. I & a couple of my batchmates built e-Saathi, an assistive UI platform to improve technology penetration among poor Indians. We attracted seed funding, won 6 competitions, hired 5+ people. But eventually, we had to close it due to acute problems in business strategy and metrics.
I feel that to improve your chances of building a successful company, having deep exposure in your chosen market, experience in operations and high-profile decision-making is primal. Founders like Mark Zuckerberg are exceptions and not the norms. There is too much risk involved. On a purely risk-adjusted basis, being a successful private equity investor or investment banker is a lot easier and more profitable than being a successful founder on a similar scale. So, I decided not pursue entrepreneurship as of now, though I am open to it, if it makes sense in the future.
I figured out that a venture capital internship would allow me to get exposure to most aspects of finance and entrepreneurship at the same time. So I interned at an early-stage VC fund named Unicorn India Ventures. It was a dream internship: analyzing startup pitches, doing market sizing exercises, understanding financial valuations and statements.
I realized that I was attracted to private investments the most out of all sub-sectors within finance. Now within private markets, there are 3 stakeholders in the ecosystem :
Early-stage VCs, Late/Growth Stage PE (Private Equity), and Investment Banking (who advises on these deals). I explored each of them :
- Early Stage VC: Interned at INSEAD, France, and Windrose Capital, another early-stage VC fund.
- Growth Stage PE: I realised that valuation exercising for big corporations is common, but not for new age businesses. So with the dual objective of honing my technical skills and helping new businesses get their right worth, I started a personal financial advisory firm named AlphaX Consulting that does financial valuation modelling for big corporations, across 10+ countries. Some of the projects we worked on included a debt refinancing project of INR 35 Cr for a leading co-working space in India, assisting a PE fund in rationalising $45M PIPE investment in a blockchain trading firm, and DCF modelling exercises for several growth stage startups.
I briefly worked and interned with a team based out of Stanford University, where we evaluated business pitches and financial projections.
- Investment Banking: Interned at Equirus Capital, a leading mid-market boutique investment bank based out of India, where I worked in performing financial statement analysis for secondary transactions in private markets and rigorous econometric and feasibility analysis of the businesses.
From these experiences, I realized that private equity (Growth Stage/Buyouts) and investment banking are the 2 fields I love the most. Hence, getting an investment banking job to advise private market transactions became my primary goal.
What made you choose such an offbeat, unconventional and unique career ?
As previously discussed, I used a very scientific experimental approach to choose my career. I tinkered with all things that fascinated me and gradually kept narrowing down till I reached the very heart of what attracts me the most.
Apart from this, there was also a very personal reason behind choosing private investing and investment banking as a career. My dad had a cloth business, which failed in 3 years, crippling my family financially. A deep dive into this company’s failure would reveal the usual problems: Management instability, a corrupt bureaucracy, and a lack of growth capital. It was an era when any form of equity funding like venture capital or private equity were alien concepts, with businesses relying solely on debt as a source of external funding. Witnessing my dad’s company being killed by an antagonistic political system and inefficient labor and financial markets scarred my childhood.
While it is improbable that a few individuals can transform the political system or reform labor markets, it is very much possible for individuals like me to help build robust financial markets.
I aim to be a facilitator for infusing much-needed equity capital to fund growth, help businesses establish financial structures, improve corporate governance, create new supply chains, provide Indian companies the same resources which my dad didn’t have access to 25 years back. My dad suffered, I suffered, but I’ll make sure it happens to as few people as possible. And that’s what my life would be all about.
How did you get your first break ?
My first break in internships was mostly a result of writing 200+ cold emails to the concerned professors of Universities and managing directors of the investment funds. I wrote straight out of heart, and connected my motivation and skills with what the internship demanded.
I got my first break in jobs through college campus placements. I got a front office investment banking analyst role at DC Advisory, a multinational investment bank, a part of Daiwa Securities Group, Japan’s second largest security brokerage.
What were some of the challenges you faced ? How did you address them ?
Getting a front-office Investment banking role from a purely technical college in India is always difficult, given the extremely limited seats on the demand side and extremely tough competition from top-tier commerce colleges on the supply side.
The challenges I faced were :
- Learning finance as well as balancing usual academics: To ensure that I am putting finance into my mind as much as possible: I completed my CFA Level 1 certification; took valuation courses from the CFI Institute; read finance books like Warren Buffet and Interpretation of Financial Statements; watched finance movies and series like Margin Call, Big Shot, Billions; read business newspapers like The Mint, Economic Times daily; and read detailed articles on fundraises and markets from The Ken.
- Building a body of work to convince the banks to take the unusual bet: Apart from CFA Level 1 and valuation courses, I interned at a couple of investment roles: 2 VC internships, 1 growth equity internship, 1 investment banking internship. I briefly was also a part of gradCapital, India’s 1st student-run investment fund to learn the tricks of the trade. I also participated in and won 6 international competitions around business analysis and financial modeling.
- Negligible on-campus opportunities for IB roles: Since pre-MBA investment banking roles are very limited and most of those roles are hired laterally after 1 year of work experience, there were extremely less number of IB roles that were hired on-campus. Even at my college IIT Kharagpur (considered a top-tier target school), we had only 2 banks coming to campus for IBD roles. They chose a total of 4 people out of 900 applicants, one of them was me. So, I guess I lucked out big time 😀
Where do you work now ?
I currently work at gradCapital, India’s 1st student-run VC fund to invest in student startups. I have been working here for the past 1 year along with doing engineering and would be transitioning to investment banking at DC Advisory after I graduate this June. But I am happy to speak about gradCapital in length.
- Problem that I solve: When I started my tech startup in 3rd year, I realized that the student entrepreneurial ecosystem is widely unregulated and unstructured. The problem is double-sided: The enthusiastic student founders have an extremely tough job ahead of them to proceed with selling their product without warm connections, guidance, product strategy validation, and funding. On the other hand, the top-tier VCs are inclined to tap into the student founder ecosystem, but a lack of quality deal flow hinders their search. We operate in the white space between these 2 problems.
- Skills needed for the job: Excellent communication skills, empathy, knowledge about different sectors, a basic understanding of technology infrastructures & business models, a decent network of other investors and founders.
- Typical Day: There is no typical day as such, but most days revolve around finding relevant startups, listening to founders pitch their startups, having engaging discussions about their business and market, drafting our analysis on these startups, and discussing with the team about our conviction.
- What I love about the job: One of the most intellectually stimulating jobs in the business (No two days are the same), with a very steep learning curve. One of the few jobs that pay you for building a personal network and brand. You also get exposure to a lot of different businesses at the same time, an unparalleled asset if you are planning to start your company some-time in the future.
For our portfolio of startups (startups where we have invested), we get our hands dirty with the team in order to assist in product strategy, getting warm introductions with business partners, connecting with industry stalwarts who are our advisory committee, hiring tech-ops team. In short, we make the bright more beautiful and make them investable. Now, we connect them to the top tier VCs, angel investors and some of our own investors. It’s an absolute win for them since they would now get a curated collection of brilliant student led startups to invest on, which previously was too complex to source.
How does your work benefit society?
- While working in private markets, I realized that what Indian businesses need is not dumb money, but active investors who can not only provide capital but also be agents of transformation across key functions. Private equity and VC as a business model relies on improving the underlying health of the business and this can be leveraged to create world-class companies in India. An investor’s role doesn’t end with building better-run companies, but often creating entire industries, supply chains, and markets.
- You get to leverage business to solve India’s biggest problems. I believe being an investor, endows one with the agency to help build companies and create industries that can focus on solving many of the problems that India faces today especially in agriculture, food security, healthcare, and financial inclusion.
- Private Capital can also help in reviving struggling companies which are hurt due to challenging macroeconomic conditions. Interestingly, the non-performing assets/loans problem which has afflicted the banking sector in India today can only be solved through fresh capital infusion, where the PE industry can play a leading role.
- The single biggest drag on growth in India is the abysmally low investment levels, both public and private. The stressed balance sheets of India and the bad loan problems faced by Indian banks have put a straitjacket on the private sector to deploy capital. Hence, long-term capital is essential for the investment cycle to pick up. I believe PE/VC firms should be in the vanguard of this effort to improve long-term investment, especially in manufacturing and infrastructure.
I have been immensely lucky to get the opportunities I have received, be in the educational or professional spheres. And I choose to start paying it forward to the communities I grew up in, the institutions that shaped me, the people who contributed to my success, and the country which spent hard-earned taxpayers’ money to pave the path I have taken. These contributions should not be taken for granted.
Your advice to students based on your experience?
- If you are a student, I encourage you to keep a blank slate and have a big appetite for curiosity before you are choosing your career. College is perhaps the best place to explore your interests and narrow down on what sticks with you. You don’t have any responsibilities as of now and should utilize this freedom to the limit.
- Always have a scientific mindset while exploring. Tinker with things, work on projects, do internships, understand what your heart tells you about that work, and keep narrowing down till you find your zone of brilliance.
- You can make a killing in almost every career there is, provided you are within the top 1% of your profession. So, don’t worry about what pays more and what pays less. Double down your strengths, be authentic, so that you can be excellent in your job, which will automatically ensure that you are earning the big bucks.
- If you give your 120% every single day, you are answerable to no one. Always be true to yourself and give every ounce of what you have into your craft.
As of now, I am looking forward to performing my best in my upcoming investment banking job. I aim to build a good professional network, work in different industries, become a master of different financial analysis skills, hone my communication skills and have fun. I believe in going all-in on what I am doing currently and not fretting about my future so much. But I have the conviction that I would be facilitating the private markets for most of my life, because of previously discussed personal and professional reasons.