1Mby1M Virtual Accelerator AI Investor Forum: Mohanjit Jolly, Partner at Iron Pillar (Part 5)

Sramana Mitra: You probably know this. In 1 Million by 1 Million, we have taken a different approach than the typical venture capital mantra of “blitzscale out of the gate, go big or go home.” We don’t believe in any of that. We do “bootstrap first, raise money later,” and that has produced a lot of very interesting success stories. FreshWorks was incubated in 1Mby1M. The first three years of FreshWorks were here. We didn’t raise money for FreshWorks until they had paying customers.

Right now, we have a company that is very interesting that you may want to look at. I’m going to give you a bit of context. This company first started in 1Mby1M in 2019, and they have bootstrapped to about $6.5 million right now. They are starting to think about raising money.

What I’m looking for is an investor who can help them get more customers. They have Unilever, Mars—very good customers and very large deals. Their $150,000 POCs are converting into $1.5–$2 million deals.

So I would like to find them partners who can fast-track this to 20 more POCs. If this is something that you think is up your alley. They will get to $10 million next year without any question. They’re on a very, very good trajectory.

Mohanjit Jolly: The short answer is yes. Please put me in touch with the entrepreneur. The other thing I want to say is, $10 million is not a hard and fast rule as long as we have a line of sight.

Sramana Mitra: Oh yes, there’s more than a line of sight. There’s a line of sight to $35 million right now. It’s a very, very good AI company.

Mohanjit Jolly: That’s fantastic. From the most recent vehicle that we closed—our India Fund II, which invests only in India private limited companies—what we’re finding is that even in the pipeline yesterday, of the five companies we looked at, nobody had raised more than about $1.5 million. These are not capital-hungry, capital-intensive companies.

The mindset has been to bootstrap not just to initial product-market fit, making sure the ICP is clearly defined, but also to get large enterprises on board as customers. There is a clear land-and-expand motion, whether it’s a POC converting into a full contract, or a full contract going in at $100k–$150k and expanding to half a million or a million plus.

Sramana Mitra: In enterprise software, you can basically use customer revenue to build your company. You don’t need a lot of venture capital. And it’s healthier to build without a lot of venture capital, partly because 96% of exits are below $100 million.

Mohanjit Jolly: That’s right. If you raise too much money, you’re pricing yourself out of exits. That’s not helpful. You’re absolutely right. Many years ago, I came up with this stack-rank of sources of capital, and I still use it. The sources of capital should be in this order: revenue—clearly number one—then grants and non-dilutive financing, then “beg, borrow, steal,” and then venture capital.

I say it half jokingly, but the reason is: taking venture capital or outside capital is dilutive. It’s the most expensive capital you can have in a company. I don’t subscribe to the Silicon Valley idea that success is measured by how much capital you’ve raised.

Part 1 | Part 2 | Part 3 | Part 4 | Part 5 | Part 6 | Part 7

One Million by One Million (1Mby1M) is the first global virtual accelerator in the world, founded in 2010 by Silicon Valley serial Entrepreneur Sramana Mitra. It offers a fully online entrepreneurship incubation, acceleration and education resource for solo entrepreneurs and bootstrapped founders working on tech and tech-enabled services ventures. 1Mby1M does not charge equity, offers an AI Mentor in 57 languages, and offers a distinct advantage over other accelerators including Y Combinator.

The Accelerator Conundrum is a multipart series that challenges the prevailing wisdom of the tech startup ecosystem that entrepreneurs should Blitzscale out of the gate. Written by Sramana Mitra, the Founder and CEO of One Million by One Million (1Mby1M), the world’s first global virtual accelerator, it emphatically argues that a better strategy is to Bootstrap First, Raise Money Later, focus on customers, revenues and profits. 1Mby1M’s mission is to help a Million entrepreneurs reach a million dollars in annual revenue and beyond. Sramana’s Digital Mind AI Mentor virtually mentors entrepreneurs around the world in 57 languages. Try it out!

This segment is part 5 in the series : 1Mby1M Virtual Accelerator AI Investor Forum: Mohanjit Jolly, Partner at Iron Pillar
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