The headline number is lying to you

Sounds good.

Thanks, thanks, Nicholas. Likewise, it's a pleasure to be on this show and share my experience and learnings with your audience.

Right. Well, let me start with the first question. How did I get into this place? So I have always loved ideas, technology, startups, entrepreneurship. That has always excited me. I've done a number of entrepreneurial roles in my life, though my early life has been spent with global institutions like Citibank, Bank of America, First Abu Dhabi Bank, NAB. But I've always, you know, veered towards technology and startups and done my own startup. So after my long career with setting up first of all, with Hobby Banks India business, I thought, let me pursue my passion of technology and venture capital and startup. So I moved to US as a Stanford GSB Sloan Fellow. And, you know, that's what led to this beginning and for the last seven years, I've worked as an operator in tech startups, as CFO, as global business officer. And finally, I decided I'll marry the two my banking expertise and experience and my newfound technology, you know, strength and use it to support startups and technology founders in &A and growth, raising gross capital. So yeah, just following my passion, my dreams, my interest areas. And I also love, I understand the challenges founders face in building companies and I absolutely admire them. So it just makes me happy to be working with some amazing founders and help them grow and build their business.

So, you know, I actually put down an article on this last week only. you know, pricing can be very, you know, what is even pricing? I mean, I mean, I think you're talking about valuation, right? So, valuation, you know, it's a very, I mean, of course, we have AI now and it can answer questions about valuation. But the fact is valuation is a very, very fuzzy word. You know, you can look at revenue multiple, can look at EBITDA multiple. There are obviously more traditional DCF ways which are more applicable to growth stage companies, not startup. But valuation is also about for the same business in the same industry. It can depend on what's your growth rate, what are your profit margins, what are your customer churns. You know, that's another lens to look at valuing a business. The third glasses that you could put on valuation is who is buying it. You know, the same company can have different value for different buyers. If it's a strategic buyer who can cross sell the same product to its customers, versus a private equity player who's just buying the cash flow, versus someone who can actually use the technology or It's an acqui hire for the team and their strengths or it's an IP. So as they say beauty lies in the eye of the beholder. know, so the valuation is a very subjective thing and founders get sometimes may get stuck at one metric and something they read about in the market. And then even after you agreed on a valuation, if it's an &A situation, you know, I was just reading yesterday that a founder sold the company and then The headline number was X, but what came into his hand was actually 0.3 X because there were so many so many other terms which would not really immediate cash in hand. So, yeah, I think it's a complex subject and it's easy to get kind of lost in this whole thing. And therefore you have to look at it from different glasses.

Well, as I briefly referred to, some of the biggest mistake could be just getting excited by the headline numbers and not getting into details about what are the terms, how much upfront cash, how much roll over equity, you know, and so on. As the devil is in the detail, I can actually talk about one situation that I faced with a client of mine.

you know, we were in an &A situation and there was an offer on the table which was let's say X and you know, it was a great offer from my perspective. The buyer looked motivated enough to close the transaction. However, we just got in another bid from another interested party at 60%, you know, 1.6X. Now, This second buyer had already negotiated with the company once and had dropped off because there were too many gaps. But here he threw his hat in the ring second time. Whereas my opinion was that we should stay at X because that looked like a higher probability close. But the sellers obviously got excited by this second offer from the same buyer. And they stopped that process and went to the second, the first buyer second time. And we wasted like four months and you know, it just went nowhere. We got stuck into the same issues, undefined, you know, not clearly defined LOIs, confusing terms, and so on. And we wasted four months in the process. So yeah, that's an example that headline numbers can a lot of times be misleading.

So I've tried to point out what is the certainty value of cash in hand. There should be a multiplier expected value of our transaction. That is what the founders should take a more composite model into account rather than looking at just the headline number.

So I need to clarify, you I was with the Dream Big during its early phase. I was there for the first 15 months. So I did work closely with the founder and help them raise capital. But the acquisition happened long, long time after, you know, almost three, four years after I had moved on. So I wasn't there when the acquisition by arm happened. But, but, you know, I can answer the question. Your question was how did my work with Big Big banks have. So, you know, I've been in I've helped clients in &A's at big banks and typically the transactions have been much larger, more formal processes, more formal, you know, engagement with buyers, you know, like you expect with big banks, a lot of people, a lot of analysis, very beautiful looking decks. So that just tells you What are the dynamics? How do you negotiate? How do these things matter? The buyer-seller interactions, what are people looking for? What are their motivations? So in general, all of that experience has prepared me very well to understand these dynamics a lot better and what people say and what they mean and what they may not understand in the first look. versus what might slowly become evident. So that is what any banker, I think the best thing that a great investment banker brings to the table is a deep understanding of the buyer, seller and transaction dynamics. And that is what I think my big bank experience has helped me build over a number of years.

So I think AI is as fundamental as the invention of wheel, the printing press, the computer and the internet. So it is touching all aspects of our life. It is touching all industries and it's a fundamental change. You know, I think what it is doing is it's democratizing knowledge. Previously, you know, you had to do a lot of studying and research and to understand anything. Now it's bringing anyone who has an idea can actually build or research or develop. So that way I feel AI is fundamental. How is it affecting my industry? Well, I'm an extensive user of AI. I automated a lot of my processes from research to outreach to my CRM to my social media activity. So I'm a super user of AI and agents to automate and how that is affecting the industry is that at the lower end boutique investment bank, it is getting a lot more fragmented. can, you know, so the only difference otherwise you needed to have analysts, large teams and so on. Now, Small team can do work equal to 10 people earlier. So now the only differentiating edge is, or the biggest differentiating edge is, what does the investment banker bring to the table? His or her expertise, deep understanding, and whether he can deliver trust and genuine concern for the founders in trust. So relationship and trust is something that AI cannot deliver. But that is, I... feel that industries at the lower end is going to get increasingly more fragmented and smaller boutique banks will be able to do a lot more work as independent bankers rather than as being part of larger firms.

Well, I'm a self-claimed certified founder, friendly banker. you know, I think I work for the cause of the founders as I've been a founder myself and I understand it is so difficult. You need a lot of courage and passion and expertise and enthusiasm to build companies. I pretty much set this up to work with founders who who struggle with some of these things to help them find great outcomes, to help them give a knowledgeable trusted advisor or by their side who could really work hand in hand with the founder to help them either do an &A or do a capital raise or even other strategic advisory. So basically be a partner. So Batec exists to support founders. grow their business and be successful.

Well, think courage, it takes a lot of courage giving up a paycheck to the uncertainty of entrepreneurship. So, courage is big. Ability to live in uncertainty, you know, there is no guarantee what will work, what will not work. So, being able to live and handle a lot of uncertainty. And, you know, perseverance, think a founding characteristic of entrepreneurs is that they don't give up. You know, they keep fighting. They might get boxed, punched repeatedly, fall down, but they always get up and, you know, take up the whole thing with renewed passion and vigor. So I think I would sum up maybe courage, ability to handle uncertainty, perseverance and never saying. Never giving up. think those are some of the few things that I find, you know, every successful entrepreneur will have these things.

Well, I would say that it's taken me a little bit of time and a few years to understand that, you know, our ability to handle uncertainty is such a big thing because if you get scared, not knowing or fearing not a good outcome, you know, you will never be a successful entrepreneur. So I think it's, you know, I would tell my younger self that you know, have more patience and don't get scared by what you kind of see or by your worst fears because they might... then it's, know, psychology proves that we tend to bloat our fears and, you know, reduce our expectations of success. know, human beings are programmed to expand fears and, you know, basically make your successes look small. So I think I wish I had known that sooner in life.

Well, I'm focused on technology startups, lower middle market startups, cross-border &A. So just starting out in the sense, been a few years since I've started on this adventure. I'm more focused on Bay Area and tech companies and give them a cross-border access to APAC, Middle East, and of course, North America. expect us to be a lot more cross-border, maybe open up in a few couple of more markets in APAC so that we can build those bridges by being physically present in those markets. So yeah, that's that is my medium term agenda. But right now, I'm absolutely focused on building it up and closing a few transactions that we're working on and really, you know, be known as someone who's a trusted advisor. to the founders because I have seen in my experience that a lot of times, know, need a founders need someone who will just work for their best interest and not necessarily for his own, either her own fees or outcomes. And that is what I want Batec to be most well known for that. We will do the right thing no matter what the outcome, even if it is not the best outcome for our own fees and income. But if it's the right thing for the founder, we wouldn't rethink twice to advise him to walk away if we feel the outcome is not in the best interest of the founder.

Well, I am extensively available through my my candidly link either from my website or people can email me at nirvikar at beteccapital.com or they can message me on LinkedIn. So yes, my website email or my LinkedIn page. All of these are great ways to reach out to me.

of course. Thank you, Nicholas. It's been a pleasure talking to you.