The role of finance within venture capital has undergone a fundamental transformation. No longer confined to bookkeeping or regulatory filings, finance today sits at the heart of deal-making, governance, fund strategy, and investor trust. In this detailed conversation with Indian Startup Times, Chetan GMS, CFO of Stellaris Venture Partners reflects on his professional journey—from chartered accountancy to venture capital—and unpacks the structural, regulatory, and strategic complexities shaping modern VC finance.
From Audit Foundations to Venture Capital Leadership
Chetan’s journey into venture capital finance began with a strong grounding in accountancy. As a Chartered Accountant, his articleship exposed him to financial due diligence early on—an experience that sparked interest in the transactional side of finance rather than purely compliance-driven work.
His tenure at KPMG, where he audited venture capital clients, provided exposure to fund structures, portfolio accounting, and investor reporting. However, he describes audit as inherently retrospective—a function that examines decisions after they are made. The transition into venture capital, first with Helion and later with Stellaris in 2016, marked a shift into a live, operational environment where finance participates in real-time decision-making across the deal life cycle.
Unlike audit, VC finance demands proactive intervention, continuous commercial judgment, and an embedded partnership with investment teams.
Defining VC Finance: Four Core Buckets of Responsibility
At Stellaris, the finance function is organized into four operational buckets: bookkeeping and compliance, transaction closure, portfolio support, and special engagements.
Bookkeeping and compliance form the foundational layer—ensuring accurate accounting, audit readiness, statutory filings, and regulatory adherence. But the function extends far beyond this baseline.
In transaction closure, finance works closely with legal and investment teams to evaluate tax implications, regulatory constraints, cash-flow impact, and structural risks before a deal is finalized. This includes modeling exit scenarios even at entry, ensuring future tax leakages or ownership complications are anticipated early.
Portfolio support is another major responsibility. Finance teams assist founders with MIS structuring, audit preparation, capital planning, runway forecasting, burn management, and governance frameworks. Rather than operating at arm’s length, finance professionals increasingly serve as advisors to portfolio companies.
The final bucket—special engagements—includes fund setup, restructuring exercises, reverse flips, cross-border structuring, and regulatory navigation across jurisdictions.
Finance as a Strategic Partner from Day Zero to Exit
Chetan emphasizes that finance must be involved from deal origination through exit. The role includes reviewing management information systems, validating valuation assumptions, assessing foreign exchange exposure, modeling tax implications on distributions, and guiding exit timing to optimize investor returns.
This end-to-end involvement ensures that regulatory compliance, investor communication, and capital efficiency are maintained throughout the fund’s lifecycle.
He notes that finance must strike a delicate balance—ensuring legal prudence while enabling commercial flexibility so that transactions do not collapse under avoidable friction.
Global LPs, Tax Structuring, and Reverse Flips
A substantial portion of the discussion focused on the structural complexities of raising capital from global limited partners (LPs).
When funds include international LP participation, tax structuring must be mapped over a five- to six-year horizon. Decisions taken at fund formation can have implications that only materialize at exit. Chetan advises building scenario models—best case, plan B, and worst case—covering exit taxation, cross-border distributions, reverse flips, and foreign direct investment (FDI) ownership restrictions.
Reverse flips—where companies initially incorporated overseas relocate or restructure back into India—present tax and documentation challenges. Ownership caps in FDI-restricted sectors require careful structuring and early LP communication. Transparent documentation and clearly defined timelines are critical to avoid surprises during exit.
The central principle: LPs must never encounter unforeseen structural consequences at the time of liquidity.
Governance, Compliance, and Rising Investor Expectations
Governance standards have tightened considerably. LPs now expect professional fund administration, timely reporting, audit discipline, and immediate transparency if issues arise.
Chetan acknowledges that regulatory bodies in India—including SEBI, RBI, and IFSC authorities—are continuously evolving oversight frameworks. While compliance costs are increasing, he advises funds to adopt risk-based compliance rather than blanket over-compliance that drains resources.
He predicts further tightening driven by misconduct from a minority of bad actors. However, disciplined funds that bake compliance costs into return expectations and maintain transparent communication will retain LP trust and fund-raising credibility.
Transparency in communication and reporting is critical to preserving long term investor relations.
Capital Discipline and the Evolving Finance Leader
In a post-exuberance environment, capital discipline has re-emerged as a defining theme. Finance leaders must guide founders on runway planning, burn control, and three-scenario modeling—ideal, likely, and worst-case projections.
Chetan frames the modern VC finance leader not merely as an accountant but as a strategic advisor and compliance watchdog. They must be candid about valuations, uncompromising about statutory obligations, and vigilant in preventing red-flag governance events.
At the same time, hiring remains a structural challenge. The skill set required—combining regulatory fluency, commercial judgment, tax structuring expertise, and investor communication—is niche. The talent pool for VC finance roles remains constrained, making retention and succession planning critical for funds.
Advice for Aspiring VC Finance Professionals
For finance professionals and chartered accountants aspiring to leadership roles within VC or AIF platforms, Chetan underscores the importance of developing transaction exposure, regulatory literacy, and strategic thinking beyond compliance.
Understanding capital flows, fund structures, cross-border tax implications, and investor psychology is as important as mastering accounting standards.
Above all, credibility and foresight define long-term success in venture finance.
Conclusion: Finance as the Backbone of Venture Capital
The conversation reinforces a clear takeaway: in venture capital, finance is no longer a backend function. It is a strategic pillar that safeguards investor trust, optimizes fund returns, enables founder growth, and ensures structural resilience.
As global LP participation increases and regulatory oversight tightens, the role of finance leaders will only expand in scope and strategic importance.
Through disciplined structuring, proactive governance, and candid capital guidance, VC finance professionals today are shaping not just fund performance—but the long-term credibility of the venture ecosystem itself.
-Interview conducted by Sandhya Bharti
