Alteria Capital Focuses on Investor, Founding Team and Business Plan The venture debt firm has a strong set of institutional VCs which can guide and fund the company in difficult times.

Ajay Hattangdi, Managing Partner and Co-founder, Alteria Capital started the venture debt fund with Vinod Murali in 2018. Alteria is India's largest venture debt fund focused on innovative startups backed by strong VC sponsors. It has invested in almost 20 companies including Stanza Living, Dunzo, Universal SportsBiz, ZestMoney. Vogo, Country Delight and Toppr, among others.

Hattangdi started the country's first venture debt program while at Citibank in 2005. He subsequently went on to create the first dedicated venture debt business in the country as the founding CEO for InnoVen Capital's flagship India non-banking finance company (NBFC) which he ran from 2007 to 2017.

The essential condition for Alteria Capital is that the company has a strong set of institutional VCs which can guide and fund the company in its difficult times. "We are sector agnostic, so, we do not look for the nature of the business but there are certain sectors from which we keep away. What we look for is the investor, founding team and the business plan," Hattangdi says.

What makes Alteria different is that along with providing capital for the business to grow, they also provide other support like connecting start-ups with customers, vendors, other start-ups and technologies. "We have a dedicated team for that as well," he tells.

Venture debt is very helpful for companies to add to their cash runway between equity rounds. It can help the start-up improve valuations while minimizing dilution when taken as part of an equity round. Companies should not take venture debt where there is a binary element to their business or if the business model is still in the proof of concept stage. The tenure of the funding usually varies between two to three years. However, the rate of interest is higher than that of banks because of a huge amount of risk involved.

Hattangdi believes that it is very important for BIZ Experiencess to balance passion with cold logic to chart the path forward in their business. "Passion provides the fuel that BIZ Experiencess need to obsess about their companies and drive forward relentlessly. But BIZ Experiencess that work with only pure passion may miss the signs that the business is off course. Knowing how to balance these two forces is critical for success," he adds.

(This article was first published in the November 2019 issue of BIZ Experiences Magazine. To subscribe, click here)