Silicon Valley’s Naval Ravikant, Tim Ferriss back $45 mn investment vehicle for Indian founders

Bengaluru: At a time when a growing number of established entrepreneurs are setting up their own investment funds to back startups, AngelList India's Utsav Somani has launched a vehicle called Galaxy with a corpus of $45 million that will enable early-stage startup founders, typically at the seed to series-A stages to invest in young companies. Once selected in the programme, each founder will be handed out $1 million to invest in startups and if the first few bets are promising they will have access to $2 million each, Somani, founding partner of Galaxy, told ET.

Well-known names from Silicon Valley including Naval Ravikant, cofounder and chairman of AngelList and Jake Zeller of Spearhead are advisors to Galaxy.



Spearhead runs a similar programme for founders to make investments in early-stage startups in the US. It starts with a $2 million fund for founders who are then allocated $10 million based on their previous bets. Some of these companies funded via Spearhead include Clubhouse, Roam and others which have raised follow-on capital from venture funds like Sequoia Capital.

Somani said the founder-led funds as a concept hasn’t taken off yet in India but Galaxy will look to drive the momentum. “Founders want to raise capital from other founders. Founders are the most helpful startup advisors. With Galaxy, they can also provide capital to get early-stage companies off the ground,” Somani said, adding that founders also have empathy for fellow entrepreneurs.

He said Galaxy will operate independently with no affiliation with AngelList India and founders participating in it can invest in startups at their own pace. AngelList will handle legal and back-office for the funds. In 2020, Somani had also set up iSeed, a micro VC fund to invest in early stage companies.

Former Stripe employee Lachy Groom, investor, author, podcaster, Tim Ferriss are among backers of Galaxy besides overseas institutional investors. Somani didn’t disclose the institutional investors.

“The value proposition to raise from a founder is also the operating experience. For example, a founder having raised from Tiger Global can advise on how to negotiate a deal with them, terms in a term-sheet etc,” Somani said.

Somani said, when asked about entrepreneurs who will manage running their company and investing, " there is no pressure from us... Most founders already help out by investing their time.... Now with Galaxy, they have capital to invest too for better alignment of incentives on all sides. "

By investing in other founders and being part of this small and elite network of explorers - they become better founders themselves.

Galaxy is being launched on the back of seasoned entrepreneurs like fintech veterans Amrish Rau and Jitendra Gupta having set up their own venture fund White Venture Capital with a corpus of $40 million to largely invest in fintech startups as reported by ET on January 25.

Other entrepreneur-driven funds which have come about in the recent years include those by Udaan cofounder Sujeet Kumar and Flipkart Group CEO Kalyan Krishnamurthy who are limited partners in Tanglin Venture Partners, Freshworks CEO Girish Mathrubootham who recently launched Together Fund to back SaaS (software as a service) startups.

Dream Sports cofounder and CEO Harsh Jain is also setting up his fund to back early-stage startups operating in the sports arena.