A stock market is a fascinating place. Many men have tried to decode its workings, tried predicting its unpredictable moods, gained a lot, and lost a lot too. This fickleness adds to the charm of the stock market, where millions of investors flock to daily, aspiring to make a fortune. And, there’s a popular tale from the Stock Markets that: Bulls make money, Bears make money and Pigs get slaughtered; which fits the current situation of the investors.
Siddharth Kothari is Chief Investment Strategist at the Om Kothari Group. The group was founded in 1971 and has interests in engineering construction, infrastructure, automotive dealerships, manufacturing and real estate. The group’s flagship company, Om Metals Infraprojects Ltd (listed on the NSE and BSE) is a global leader in hydro-mechanical equipment for dams. His startup portfolio has crossed over 12 companies including Grexter, ClearDekho, ApnaComplex, Innov8 and Beardo. Siddharth is a Partner at 2Point2 Capital and Venture Catalyst’s 9 Unicorns Fund. He is also an INK Talks Future Maker.
Siddharth Kothari – About
Siddharth Kothari – Journey
Siddharth Kothari – Investment Mantra
Siddharth Kothari – Few signs to Trust a Founder
Siddharth Kothari – Aid to Startups
Siddharth Kothari – Productivity Hacks
Siddharth Kothari – Right Time to Invest for a Startup
Siddharth Kothari – Pitch Deck
Siddharth Kothari – Best Way to Divide Equity Among Founders
Siddharth Kothari – 3 Private Companies to Invest in
Siddharth Kothari – Indian Startup Ecosystem
Siddharth Kothari – Recommended Tools
Siddharth Kothari – About
Siddharth grew up in New Delhi and went to the British School for further studies. He was the President of the student council and served as the Captain of the Cricket team, and enjoyed playing most sports. Siddharth was an above-average student and studied Finance at Boston University. Shortly, after graduating he read a book about Warren Buffett, and he knew exactly what he wanted to do. He aimed to be a successful investor.
In India, Siddharth Kothari considers RK Damani, an idol given his massive achievements in investing and business and a humble attitude despite all of it. Both these great leaders proved to him that anyone can achieve great things in life while keeping a high bar when it comes to ethics. Another fun fact that Siddharth admires about RK Damani is, that he is also a vegan.
Siddharth has been vegan for 10 years now! He also prefers investing in vegan-friendly companies. Apart from investing in stocks and startups, he enjoys reading non-fiction, watching documentaries, and playing poker. He spends about 3-5 hours a day reading. The rest of the time he is either meeting founders, attending con-calls, or hearing startup pitches. Siddharth Kothari used to spend about a week each month in Bombay before COVID.
Siddharth Kothari gives credence to the fact that to be a good investor one needs to constantly keep learning and that is what he enjoys the most; whether it is through books, movies, conferences or interactions with founders, or other investors. He enjoys poker, sports, books, and movies. His passion for cinema has also led him to finance films produced by Wishberry Productions, a portfolio company.
Siddharth Kothari – Journey
Siddharth first started investing in stocks in 2013 and in startups in 2016. He believes that investing in the stock market is not tough as it is a democratized process for everyone, by setting up a DMAT account, and buy whichever company’s stocks they like. But breaking into the startup ecosystem took him some time as it is a tougher game. Afterward, he started investing in startups through angel networks like Venture Catalysts. When he found some success there, he started getting good deal flow, and so did several direct deals with companies too.
Siddharth is sector agnostic. He invests for the long term and shoots for high returns, north of 26% CAGR.
Siddharth Kothari – Investment Mantra
Siddharth has a similar outlook to a famous investor who once told him: “I look for a smartass founder, in a big-ass market, with a kick-ass product.” It is a cliche to say that the founder is the absolute most important part of an investment, but he cannot turn up the volume on that enough. Siddharth, typically, looks for founders who are hungry and driven. If they are passionate about what they are building then that generally comes through during their pitch.
Parnas Ghosh
Siddharth Kothari – Few Signs to Trust a Founder
Siddharth pays almost no attention to which college a founder is from. He himself has seen many great founders who came from unknown colleges, or even no university education, and they still succeeded. What is important in a founder is that s/he should be able to hustle and bring a team together and deliver.
A startup is like a child and it takes a village to raise a child. Similarly, it takes a group of people including co-founders, mentors, investors, clients, suppliers, etc to build a startup. He believes that this is the founders’ job to sneak out synergies between various stakeholders and keep adapting to change.
Siddharth Kothari – Aid to Startups
Siddharth helps startups not just with capital, but also by opening up his network to them, giving his mentorship, and leveraging the strengths of their 50-year-old conglomerate: Om Kothari Group. This could be in the form of better deals with his real estate connections, better hiring using their established HR platform or even access to debt at reasonable rates. Since the Om Kothari Group is diversified in several sectors, synergies pop up for various startups.
Purbalee Dutta
Siddharth Kothari – Productivity Hacks
Siddharth shared quite insightful hacks and one of them is Mindful Meditation, which is extremely beneficial to clearing up the mind and being more efficient. Just 10 minutes a day to start off with makes quite an impact. Sitting is the new smoking, so walking meetings are better at times than sitting down for long periods of time. Monitoring screen time is also important as smartphones can be a huge distraction. Very often – the smarter the phone, the dumber the user!
Siddharth Kothari – Right Time to Invest for a Startup
Startups should raise money when the environment is favorable and capital is available. If startups try to time it too, well then they might get stuck for long periods without capital as the macro environment can hamper investors despite founders and traction being good. Surviving is very important so raise the money when its available at decent terms. Siddharth believes that getting proof of concept is important to avoid failures at startups. Founders should dip their feet in to test the water before they dive.
Siddharth Kothari – Pitch Deck
A pitch deck should be crisp and quickly communicate to the investors what the USP of the product or service is. What problem does it solve? What the founder’s stories are. Why they will succeed. What is the competitive landscape? And what expectations investors should have for the downside and upside.
Parnas Ghosh
Siddharth Kothari – Best Way to Divide Equity Among Founders
Siddharth affirms that this depends on the companies. Co-founders should own a significant chunk so as to not over dilute themselves by the time they are done with seed, angel, and Series A rounds. If it is a single founder, they should look for adding one more founder, and if there are already three founders, they should look not to add another. Generally speaking, there are exceptions, such as Infosys, amongst India’s greatest tech companies had six co-founders. Other than founders, deal leads or mentors should also have an equity incentive and there should be an ESOP pool for early and key employees.
Siddharth acknowledges that founders should not look for keeping maximum equity but optimum equity while negotiating with investors. This is because the investors should also be incentivized with enough skin in the game to add value to the startup. Instead of accepting capital from any investors giving good terms, founders should raise smart money where the investors bring in advantages other than just money. This could be industry know-how, connections to distributors, etc.
Covid19 is a black swan event. We feel comfortable buying equity in companies with virtually debt free balance sheets flushed with cash as they’re highly likely to survive the crisis and thrive when normalcy returns. They will also benefit from gaining market share of the many mortalities most sectors will mourn. – Siddharth Kothari, Chief Investment Strategist, Om Kothari Group
Siddharth Kothari – 3 Private Companies to Invest in
We asked Siddharth if he would like to invest in 3 Private Companies of his choice today, at a valuation of his own choice, what will they be and why?
- Impossible Foods (USA) – As they are majorly impacting the plant-based food revolution being led by Beyond Meat, Very Good Butchers, and other vegan food companies
- Oatly (Sweden) – As they have taken on and are beating the giant dairy industry by leading a massive and important migration towards plant milk in a global manner.
- Paytm (India) – As they have spearheaded India’s digitization movement and are pushing our country towards digital transactions which is the future
Siddharth Kothari – Indian Startup Ecosystem
Siddharth really wishes that Founders and VC’s in India should understand the importance of constantly experimenting, failing, and keeping at it. Actually, startups tend to be at risk-averse because of the fear of failing. But failing is important to keep learning and evolving. Of course, the failure should not cause such a large financial loss that no one can’t survive. But take small losses so that anyone can live to make more. And through these failures and experiments even if one works out well, it can be more than makeup for the duds.
Lakshya Singh
One of the largest companies in the world, Amazon, become such a success because of its willingness to constantly experiment, many of which didn’t work as the Fire Phone. But the ones that did like Prime and AWS made history. Same for Google which failed with Google Glass bit hit big with Google Maps.
Siddharth Kothari – Recommended Tools and Books
- Screener and MoneyControl are good to monitor and track listed companies.
- Ken and MoneyLife are great investigative publications that dig deep into their stories.
Some of Siddharth’s favorite books that have influenced him in a better way are:
- Poor Charlie’s Almanack by Charlie Munger
- Fooled by Randomness by Nassim Nicholas Taleb
- The Dhandho Investor by Mohnish Pabrai
- Zero to One by Peter Thiel
- How to Win Friends and Influence People by Dale Carnegie.
