The Omega Files - The “Why did you do it?!” Question | Part 1

Part I: The (rest of the) Blume Team takes a shot at it

90% of the Blume team had not seen the Omega Files before its public release in mid-Dec. I asked a bunch of the leadership and investment team to share their personal rationale of “why (they think) we did it?”

Before I reveal my own reasons (in Part II), let me share what I received back from them. Most folks shared 2-4 reasons. I’ve clubbed and anonymized all responses received, and categorized them.

Teachings on how to build an early stage Fund (in India)

“Tough building a company, tougher to scale a fund.  It’s a primer on early-stage by folks who built it. No college can treat it any better.”

“Biz can’t be built with assumptions, it has to be built with conviction. Early stage is not about sitting back and waiting for things to happen. It’s as much a fund manager’s job as the company’s. Creates awareness and helps all to appreciate the business of early stage VC.”

“At times you have to build in spite of the ecosystem and not becoz of it. Important for new entrants (GPs, founders, employees of ecosystem) to understand and make an informed call.”

“The hard work it takes, as well as the flukes that happen along the way”

“I think rather than borrowing gyan from the west and then rewriting it, this is a story of an Indian fund manager for the Indian ecosystem. India VC has to be played very differently then the west and hence the idea is to help the ecosystem understand it differently.”

“What you see when you fund first is mostly not going to be what you have when you exit - zopper, webengage and many others. Back the founder and the market when writing seed. A founder who is ready to parse through many ups and down and near death experiences, and sell his hand (Zopper selling the pos business) to survive will likely win.”

“Follow-ons from tier A, gora funds are not an elixir. Even folks getting follow-ons there have died and folks who didn’t get that validation have excelled. So get your act right.”

“Playbook for young fund managers - In our commitment to sharing knowledge, these reports serve as a playbook for emerging fund managers. By transparently dissecting a fund’s performance, akin to an autopsy, we contribute to the ecosystem’s growth. Our mission extends beyond individual success; we strive to elevate the entire Indian startup ecosystem globally.”

Transparency

“Private (equity) is the asset class but performance has to be public. Benchmarking for the ecosystem and aligning incentives between investors and founders are key benefits.”

“Demystify venture capital.”

“De-glamourise venture. Show the duration of time to see results and debunk the notion of fast wins.”

“Bridge the gap between public and private markets, offering public mkt investors valuable insights into the dynamics of the private market. By showcasing well-run companies in each fund’s portfolio, it helps public mkt investors learn more and take a keen interest in VC backed companies - beyond mere valuations. Many of these companies we hope will make it to the public markets - so it helps to educate and keep these investors informed and intrigued.”

Investment Performance

“Also puts pressure on us to deliver great outcomes. If we get a 2x fund, and we put it in public, people will say see what a dabba fund, SIPs would have been better (some folks are already hinting that a small cap or midcap SIP would have given you similar returns), and if we don’t publish, people will say, the results were so bad that they didn’t want to embarass themselves. So publishing all our results, eventually, creates a forcing function to deliver, to push ourselves more.”

“Too many people talk about too many things - important that rather than trashing each other, fund managers put their performance out there for people to compare.”

“Immense help in setting and leading a narrative around performance, as opposed to reacting to questions. The stories behind the numbers make this particularly strong.”

“Allows us to demonstrate a strong leadership position in the industry with this bold, unconventional approach - sets a high bar for others”

“As some of these reports become more granular into sub-portfolio data per partner or sub-sector data, opportunity for us to benchmark against global peers (I'm thinking from a SaaS pov) -> also added positive pressure on partners to deliver individually as strongly or more then the fund collectively does.”

Investors as stakeholders

“Ground venture capital in its obligations to return capital to LPs as a primary stakeholder.”

“The journey of a VC is not rosy, it takes a long long time. In my mind, it would be great if this can seed the thought of 15 year funds in the wider ecosystem.”

“Exits sometimes need to be modeled in form of secondary funds and if the original LPs and new LPs have no issue in it, it should be well accepted as transfer of the risk.”

“Empowering Endowment funds, HNIs, and wealth managers to make more informed decisions - Omega files intent is to provide a transparent comparison of performances across funds and strategies, we emulate the openness of public markets and hope this will inspire others to follow suit. This we believe will eventually build more  confidence in the asset class and the India story.”

“Helps put a strong spotlight on the exit orientation - especially important to show the ability to generate outcomes pro-actively”

“Whenever you all pitch to US investors, I always imagine you pitching the India story more than just Blume.

I know our decks have a bunch of numbers and slides, but a bare-it-like this, not to mention the guest appearance of another native VC grown in the nascent venture era could help build a lot of trust amongst potential LPs.”

“Game theory-style move - now that we do it, most funds might want to do it to keep up with the benchmark we've set. More transparency across ecosystem -> easier for potential LPs to evaluate (not sure about this?) -> higher bar for us to meet and thus this pushes us to deliver better.”

Thought leadership, Marketing and PR

“Blume stands out as a "pioneer" - I see this as a common theme across many things we've done, we like being pioneers - whether it is being the first domestic capital institutional seed VC, using continuity/opp funds, IVAR, our thought leadership around path to IPO etc. This is another feather in that cap. Blume builds a strong brand for being a pioneer in pushing the edge of VC ecosystem.”

“I think it is a great marketing hack, but here it makes sense to be early in the game - after 4-5 people do it, unless there is like a 10x returner, no one will notice - so it helps we are early.”

“All in all, found this to be a great marketing move that hit the perfect tone probably because it was so Blume like to begin with.”

Founders as primary stakeholders of the ecosystem

“Makes startup founders more responsible too - when their name is out there in the public domain  - they will be more mindful.”

“I can also imagine more founders vying to be on the Pareto within Pareto slide more than ever. It also sets a great performance benchmark for a team member, current or potential, particularly since this is not even supposed to be the best fund yet. #EkTeerSeTeenNishan”

“My personal favourite is the slide with city wise returns. Feel Bangalore is so glorified within and outside the firm, most founders assume I am joining from Bangalore on pitch calls. So it’s good to know as an investor or a builder that value has been created solidly outside of the city also.”

“Founders want to compete to be featured in future Omega files - increases competitiveness of performance and outcomes inside the portfolio, and draws more ambitious founders closer towards us to partner with - they can see that we don't hesitate to push the envelope, and we become the fund that they want to be associated with (even more so than today)”

The Omega Files. The Why? Part I. Fin.