India’s startup ecosystem has transformed over the past two decades. Access to capital has improved, angel investing has expanded, and founders have more opportunities to turn ideas into businesses. Yet, building a successful startup requires more than a promising idea or a strong pitch. Founder-market fit, execution, and the ability to build a business that lasts remain critical.

For Sasha Mirchandani, Founder & Managing Partner at Kae Capital, years of investing have reinforced an important lesson: the quality of the founder often matters more than the original business plan. From his experience with Mumbai Angels to building Kae Capital, his investment philosophy centres on backing the right people, allocating capital carefully, and supporting businesses through the challenges of growth.

Founder-Market Fit Matters More Than a Big Idea

Earlier in his investing journey, Sasha believed that a big idea combined with a smart founder could be enough to build a successful company. Over time, his focus shifted towards founder-market fit: whether a founder genuinely understands the industry and the problem they are trying to solve.

Founders who have experienced a problem firsthand often bring insights that cannot be gained from market reports alone. When evaluating entrepreneurs, Sasha looks for clarity of thought, speed of execution, resilience, and the ability to build a strong team. He also pays attention to whether founders follow through on their commitments.

One way he assesses this is through what he calls the founder’s “say-do ratio”. He looks at what a founder promises during the first meeting and checks in during the second to see whether those commitments have translated into action. For Sasha, the difference between what founders say and what they actually do can reveal much more than a polished pitch deck.

Lessons From Mumbai Angels Shaped Kae Capital

Sasha’s experience co-founding Mumbai Angels, when angel investing was still relatively new in India, reinforced an important principle: early-stage investing is about backing people, not just plans.

Reflecting on the limitations of the early angel investing model, he observes, “Most of us wrote a cheque and disappeared.” Investors could provide initial funding, but many lacked the capital, time, or structure to support companies through subsequent funding rounds.

Myntra was one example of how a startup’s journey could evolve beyond its original idea. The company began as a personalised gifting business before changing direction, demonstrating the importance of founders being able to adapt as their businesses develop.

Kae Capital was built to address the need for sustained early-stage support by combining investment with follow-on capital and a team that works closely with founders. The objective is to support businesses beyond their initial funding and help them navigate the challenges of growth.

Why Investment Trends Should Not Drive Decisions

Venture capital markets move through cycles, with sectors such as ecommerce, edtech, and crypto experiencing periods of intense investor interest. However, Sasha believes investors should not allow market trends alone to determine their decisions.

He offers a simple test for evaluating an opportunity: “Would we still do this deal if the sector went out of fashion tomorrow?”

The question shifts attention from market momentum to the underlying business, its potential, and the people building it. A sector may attract substantial funding today, but investors still need to assess whether a company can create lasting value when the excitement fades.

Sasha also points to a common mistake among founders: overestimating the importance of a large total addressable market while underestimating distribution. In India, reaching customers, building trust, and acquiring them at a sustainable cost can determine whether a business succeeds.

A large market creates an opportunity, but founders still need a clear strategy to capture it.

Starting Up Is Easier, but Winning Is Harder

With more angel investors and funding opportunities available, starting a company has become more accessible. However, the growing number of startups has also intensified competition.

As Sasha puts it, “Starting has become easier. Winning has become harder.”

In a crowded market, capital alone does not provide a lasting advantage. Founders need to identify meaningful problems, make sound decisions, and execute consistently. They must also distinguish between genuine business growth and growth driven primarily by spending.

Financial discipline becomes particularly important during funding downturns. Companies that recognise problems early and reduce unnecessary expenditure are better positioned to manage periods of uncertainty. Capital should help a business grow, not become something it cannot survive without.

Sasha also cautions against relying too heavily on established frameworks. As he says, “A playbook is someone else’s situation.” What worked for one company may not work for another, making it essential for founders to evaluate their own circumstances rather than follow someone else’s formula.

AI-Native Startups Could Find Opportunities in Traditional Industries

Sasha sees significant opportunities for Indian founders to build AI-native startups in traditional sectors such as manufacturing, logistics, financial services, and healthcare.

Drawing on his experience as a board member at Fractal, he has observed the challenges large enterprises face when adapting existing processes to artificial intelligence. Established businesses often need to rethink their workflows before they can fully benefit from the technology.

Startups built around AI from the beginning may have an opportunity to approach these industry challenges differently. Rather than competing only in the global race to build horizontal AI platforms, Indian founders can focus on applying AI to specific industries and business problems.

The combination of technological capability and deep domain knowledge could help founders develop solutions for practical business needs, particularly in sectors where established processes leave room for improvement.

Staying Close to Customers Is Essential

For Sasha, founders should spend more time with customers than with investors. His early career as a salesperson at Onida’s Mumbai branch taught him the value of understanding customer behaviour directly.

Sales calls, customer complaints, and conversations with people who stop using a product can reveal insights that may not emerge in boardroom discussions. Reflecting on the lessons of his sales experience, he says, “You learn more in a dealer’s shop than in any boardroom.”

The principle is straightforward: direct exposure to the market can help founders recognise problems, improve their offerings, and make better business decisions.

Sasha also believes successful businesses should be judged by more than their market position. A company that builds a product customers depend on, remains profitable, and continues growing over the long term can create meaningful value without necessarily dominating its category.

Employee wealth creation is another important measure. When employees benefit financially through employee stock ownership plans (ESOPs), they may gain the resources and confidence to launch businesses of their own. This creates a wider cycle of entrepreneurship, with experienced professionals contributing to the next generation of startups.

Building Globally Competitive Indian Companies

Having witnessed the evolution of India’s startup ecosystem, Sasha wants to see more Indian companies build deep technology and compete globally.

Fifteen years ago, Sasha would fly to the US to pitch large tech companies on acquiring small Indian startups for $15 million to $27 million. Exits were hard to come by. That has changed.

The experience reflects how the startup ecosystem and its exit opportunities have evolved. The broader ambition now is to build Indian businesses with the technology, scale, and capabilities to compete internationally.

For Kae Capital, Sasha hopes to be remembered for backing promising founders early and staying with them throughout their journeys.

As the ecosystem matures, access to capital and a compelling idea will remain important, but they will not be enough on their own. Founders must understand their markets, execute with discipline, build strong teams, and remain connected to the realities of their businesses.

For investors, the challenge is to identify entrepreneurs who can adapt, learn, and build companies that last beyond changing funding cycles and market trends.

-By: Aakriti Jaiswal