Investment Strategy

Our Investment Approach

Avighnaa Venture Partners adopts a growth-focused investment approach targeting businesses that demonstrate strong fundamentals, proven market traction, and potential for sustainable scaling. Our strategy balances calculated risk with robust governance to deliver superior returns.

“We believe in taking an active role in the Portfolio Entities but if we cannot add value, we prefer to stay away.”

Target Investment Stage

The fund focuses on investing in tech-based growth stage startups and Small-Medium businesses. Often, these companies fall into the categories of “Pre-Series A” to “Series B” or “Growing Businesses” or “SMEs” but we recognize that these labels are fluid.

Our sweet spot lies at the intersection of:

  • Revenue Growth: Development, operations, marketing, hiring
  • Business Growth: Market & product expansion, improving profitability, technology investment
  • Clear Exit Path: Companies positioned for strategic acquisition, PE buyout, or public listing within 4-5 years
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Investment Criteria

We evaluate potential investments based on these key parameters:
1. Strong Value Proposition & Product-Market Fit

o Companies with completed product development and increasing customer adoption velocity

o Clear solution to real, burning problems with significant market demand

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2. Founder & Management Quality

o Passionate & grounded entrepreneurs with strong vision and execution capabilities

o Teams that demonstrate commitment and capability to build successful businesses

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3. Exit Strategy & IRR Expectation

o Clear articulation of business evolution, future funding rounds, and exit timeframe

o Multiple exit options via Series B/C/D VCs, Buyout PE, Strategic sale, or IPO

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4. Large Addressable Market

o Businesses targeting substantial markets with strong growth potential o Clear product-market alignment with ability to capture significant market share

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5. Competitive Positioning

o Companies with durable competitive advantages or MOAT

o Differentiated products/services with long-lasting competitive edge

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6. Capital Efficiency

o Firms demonstrating excellent ARR-to-funding ratios

o Efficient use of capital with strong unit economics

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7. Path to Profitability

o Businesses that have profitable unit economics or clear path to profitability

o Strong understanding that every business has a unique path to profitability

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8. Governance & Rights

o Return protection, affirmative rights, board representation

o Willingness to implement robust strategic reporting and governance frameworks

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Investment Parameters

We evaluate potential investments based on these key parameters:
  • Fund Size: USD 75Mn + green shoe option of USD 50Mn (Total USD 125Mn)
  • Fund Tenure: 8 years with 1+1 year extension
  • Investment Size: $2M to $7M with flexibility for follow-on
  • Geographic Focus: Primarily India focused investments (minimum 75%)
  • Portfolio Concentration: 12-15 investments to ensure hands-on involvement
  • Single Exposure Limit: Maximum 15% of target fund corpus for any single investment
  • Sector Diversification: Single sector exposure limited to 30% of fund corpus

Sectors of Interest

We evaluate potential investments based on these key parameters:

We primarily focus on industry segments such as:

    • Fintech
    • Consumer Services / Tech
    • Healthcare
    • Enterprise tech / SAAS
    • New emerging businesses in AI / Web3
    • High-growth SMEs with robust business models and high EBITDA margins

What We Avoid

We evaluate potential investments based on these key parameters:
  • Paper Napkin Ideas: We will not enter an investment at the idea stage. The company should have developed the Product/Service and demonstrated a defined customer base and functioning revenue model.
  • Long Innovation Cycles: An innovation or idea that requires millions and a long gestation period to show its potential validation is not a target investment for us.
  • Project Financing: We understand that there are project owners, operators and developers looking to build energy farms, infrastructure projects or buildings. While these are all worthwhile ideas, they are primarily not under our purview.
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  • Project Financing: We understand that there are project owners, operators and developers looking to build energy farms, infrastructure projects or buildings. While these are all worthwhile ideas, they are primarily not under our purview.

Value Addition Strategy

Beyond capital, we provide strategic value in multiple dimensions:

  • Strategic & Market Expansion Support: Long-term strategy, market expansion, and M&A opportunities guidance
  • Business Development & Network Leverage: Access to our global network of industry experts, businesses and investors
  • Operational Efficiency & Technology Adoption: Process optimization and digital transformation support
  • Financial Planning: Capital structure, financial planning, and investor relations assistance
  • Governance & Risk Management: Implementation of strategic reporting and robust governance frameworks
  • Exit Strategy Planning: Guiding the optimal exit path that maximizes shareholder value

Through this comprehensive investment strategy, we aim to generate superior returns while building businesses that create lasting value in the Indian economy.

Our specialist team understands the importance of maintaining a lasting relationships with clients to deliver specific investment solutions.
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