Founders: each one's painting their own painting

“Founders: each one's painting their own painting”.

Above quote is by Neil Mehta, Founder and Managing Partner, Greenoaks. A San Francisco-based investment firm Neil established in 2012.

I first heard of Neil, when Greenoaks played a key role in the acquisition of the luxury e-commerce platform Farfetch. What struck me about that transaction was that Greenoaks had been an early investor in Coupang, Inc. (the South Korean e-commerce giant) since 2012. And now twelve years later, in 2024, was backing them to part-fund one of their acquisition targets. As I delved deeper into his background and his/his funds philosophy, what i gathered is that their core belief is to be a concentrated, long-term partner to extraordinary founders building generational businesses. Hence, since he continued to believe in Bom Suk Kim (Founder of Coupang, Inc.) and the Institution he had built, he had not only stayed invested in Coupang, but was investing further to help them in their growth.

This does necessitate that the investors in his fund are similarly aligned and the funds ought to have a very long life. I sincerely hope sooner, than later, an Indian fund house will also attempt something on these lines. I clearly see a set of Indian investors / family offices, who would back such funds.

A few days back, a client expressed his exasperation over the multiple products & strategies being (almost literally) thrown at him from all corners, with everyone claiming to be better than the other. I could relate to his exasperation. As even after having spent 25+ years in the business of advising, more than the multiplicity of products & strategies, the hyper-competitive narrative around them confounds me. I witnessed it even at the start of my career. Sadly, it has only got shriller. What makes it tough from an investor's standpoint is that the narrative pushers have managed to excel at the art of nicely cloaking themselves in sophistry. It requires a very trained eye to see through the sophistry. Not easy for investors, given investing is not their full time job.

At Serenity, we try our best to go beyond these narratives and highlight that investing, at its core, is about the underlying businesses and founders. Your relationship could be that of a shareholder (stocks/equity) or a lender (bonds/debt). The business could be listed or unlisted. You might directly buy or you could hire a fund manager.

The fund manager could be directly employed by you (as some of the large Single Family Offices have done) or they could be sitting inside a mutual fund or a PMS or an AIF. The strategy could be short-term (implying that they are in the business of trading of businesses and trading between asset classes) or it could be long term, to very long term.

But the undeniable fact is that the underlying of all of the above, are businesses and their founders. To be a successful investor, you directly/indirectly need to be backing a bunch of businesses / founders. The extent of diversification and the relationship (equity/debt) could vary depending on your risk appetite.

We have not yet reached out to Greenoaks Capital, but we may soon. As, at Serenity, we have a bias in favour of fund managers and institutions that take a minimalist approach to investing. We generally prefer institutions that believe in doing one thing at a time and excelling at it. We stick to this as far as possible and stay away from the narrative-builders/maximisers; perhaps this is why we decided to call ourselves as 'Serenity Wealth'.

Sharing an article which covers Neil & his journey. Here he refers to an internal document – ‘Our Soul’, which explains the firm's relationship to the founders they invest in. Being a founder of a young firm myself – I feel that a relationship defined on these lines, is what every founder would be willing to give an arm and a leg for. If, as and when, we do decide to fund our growth by bringing in an equity investor, we will consider ourselves fortunate to have such investors.