![\"Iron](\"https:\/\/www.newsbeep.com\/il\/wp-content\/uploads\/2025\/11\/Iron-Pillar-managing-partner-Anand-Prasanna---Abhi_1763370434079.jpg\" "\\"Iron")
Iron Pillar managing partner Anand Prasanna. (Abhijit Bhatlekar\/Mint)<\/p>\nAnand Prasanna, managing partner at Iron Pillar, is not one to sugar-coat the realities of entrepreneurship. In a world where funding headlines often outshine fundamentals, he urges founders to slow down, stay private longer, and build businesses that can breathe on their own. From navigating investor expectations to decoding the AI gold rush, Prasanna offers a clear-eyed view of what it takes to create lasting value in India\u2019s evolving startup landscape.<\/p>\n
Iron Pillar managing partner Anand Prasanna. (Abhijit Bhatlekar\/Mint)<\/p>\n
In this candid conversation, he discusses why many founders aren\u2019t ready for the scrutiny of public markets, how India can become the world\u2019s DeepTech factory, and why resilience \u2014 not speed \u2014 is the real moat.<\/p>\n
Edited excerpts:<\/p>\n
Are founders in India ready for the scrutiny that comes with public markets, the quarterly numbers, analyst expectations, governance discipline?<\/p>\n
That\u2019s the hard truth, many aren\u2019t. I tell founders two controversial things. First, the best way to build a business is to not take anybody\u2019s money. If you can grow profitably, like Dyson did, stay private. But if you choose capital, understand it comes with a timer. Investors have to return money to their LPs. That\u2019s the business model. Secondly, too many companies are being pushed to IPO prematurely. Public investors want predictability and profit; founders still want growth. That creates tension. If you\u2019re building long-term value, stay private longer, find patient capital, and go public only when you\u2019re truly ready.<\/p>\n
The best founders find a cash-flow moat early, one business line that self-funds everything else. It gives them negotiation power with investors and the freedom to focus on long-term value. Capital should be additive, not oxygen.<\/p>\n
We can\u2019t escape AI, it\u2019s the word of the year, the decade, maybe the century. Everyone\u2019s in the AI gold rush. What\u2019s your view as an investor, hype or enduring revolution?<\/p>\n
Both. There\u2019s genuine transformation, but also exaggerated euphoria. The best way to stay sane is to be early, to catch a trend before it becomes noise. We backed Uniphore, an AI company, long before this current wave.<\/p>\n
If AI were a country, then Microsoft, OpenAI, Google, and Nvidia own its roads and railways, the infrastructure layer. The question for VCs is: where do you build? On the roads (models)? In the cities (apps)? Or in the small shops (tools)? Most are crowding into the same neighbourhoods.<\/p>\n
Technology never stays still. Just as Broadcom went bust despite being the Internet\u2019s infrastructure darling, today\u2019s AI incumbents could be disrupted by cheaper, leaner models.<\/p>\n
Some startups are already training LLMs at one-twentieth the cost of OpenAI. Here\u2019s where India comes in: nearly 20% of the world\u2019s AI talent sits here. If we can solve cost structure and build alternative model pathways, we could emerge as the DeepTech factory for the world. But we need ambition, policy support, and energy infrastructure to match.<\/p>\n
Generative AI also raises anxiety, job loss, automation, UBI debates. Is AI friend or foe for an economy like India?<\/p>\n
A \u2018frenemy\u2019. Think back to 1984, when computers arrived and unions protested job losses. Forty years later, that disruption created millions of new jobs. AI will do the same, if we manage it well. It can unlock enormous productivity. Imagine credit underwriting for small businesses, AI can expand India\u2019s lending base two or three times by reducing friction. Or in welfare delivery, AI can plug leakages, create transparency, and make governance more efficient.<\/p>\n
Of course, some roles will vanish. But Indians are inherently entrepreneurial. I recently spoke to a friend in tech, worried about layoffs. He\u2019s now launching a farm-to-fork trading business in his hometown. That adaptability is India\u2019s safety net.<\/p>\n
The bigger truth: jobs will change faster than we can legislate. Everyone needs a sidekick, a secondary skill, an alternate income stream. Longevity has increased; retirement age hasn\u2019t. Reinvention is no longer optional.<\/p>\n
We\u2019ve seen so many hype cycles, e-commerce, crypto, metaverse, and each was declared the next Internet. How do you know AI isn\u2019t just another?<\/p>\n
History is humbling. Every few years, technology sells a new religion. As Charlie Munger said, Show me the incentive, and I\u2019ll show you the outcome. If you\u2019re in the business of selling hype, you must believe in it.<\/p>\n
AI too will stabilise after the euphoria fades. Then comes quantum computing, or biophysics, or longevity tech, another hype, another rush. The real investors separate cycles from substance.<\/p>\n
There are two ways to play hype. One is the Andreessen model, get in early, back the best founders, and ride the wave. You must be in the top 10 or you\u2019re irrelevant. The other way, our way, is to back the survivors of previous cycles. Companies that have endured, learned, and emerged leaner. We invested in BlueStone when the e-commerce hype had already died. That counter-cyclical patience is where long-term alpha lives.<\/p>\n
What\u2019s the hardest part of being a venture fund manager in India right now?<\/p>\n
Depth. India\u2019s early-stage ecosystem still lacks a deep follow-on market. In Silicon Valley, if you write the first $100 million cheque, you know the next $900 million will come. In India, that assurance doesn\u2019t exist. That\u2019s why Iron Pillar deliberately operates between venture and growth, investing in companies with $10\u201325 million in revenue, helping them scale profitably to $100\u2013200 million. We love founders who think long-term, raise less, and grow sustainably.<\/p>\n
We evaluate around 400 companies a year, track about 40, and invest in four. It\u2019s our 444 model. We\u2019re fast with feedback, founders usually know within ten days if we\u2019re in or out. And we respond to every email. I try my best to stay within 48 hours, though with global deal flow, it\u2019s not always easy.<\/p>\n
You\u2019ve mentioned the Indian consumption story often. What\u2019s your take on this new breed of Instagram entrepreneurs, building content, community, and commerce?<\/p>\n
There\u2019s a thin line between virality and vanity. If you\u2019re an Instagram success, you still need a hero product, something that justifies the story. Many brands nail the narrative but crumble on product.<\/p>\n
The playbook keeps evolving. But the unit economics are brutal. Digital customer acquisition costs in India are pegged to U.S. pricing, Facebook and Google ad rates, but you\u2019re selling to Indian consumers. That mismatch breaks the model.<\/p>\n
Interestingly, offline channels now deliver better contribution margins than online. BlueStone started 100% online, but our investment thesis was clear: go offline, build trust, and IPO. It\u2019s old-school, but it works. The real problem isn\u2019t the entrepreneur, it\u2019s the pipe. Our digital advertising infrastructure is too expensive for Indian economics.<\/p>\n
That brings us to a larger question. Most Indian startups still rely on global platforms, Instagram for reach, AWS for storage, Google for ads. Are we really building anything of our own?<\/p>\n
That\u2019s the heart of it. Competing head-on with global giants is like a lion charging an elephant, it rarely ends well. The lion wins only when it attacks from the flank, unexpectedly.<\/p>\n
We must stop pattern-matching Silicon Valley. Building a Facebook for India is futile. But rethinking problems from first principles, that\u2019s our edge. For instance, instead of importing pollution tech from Europe, why not invent India-specific solutions that solve the problem at one-tenth the cost? The next Indian unicorn will emerge not from imitation, but from sideways innovation.<\/p>\n
If you want to beat the elephants, don\u2019t play their game. Create new terrain.<\/p>\n
(Shrija Agrawal is a business journalist. The views expressed are personal.)<\/p>\n","protected":false},"excerpt":{"rendered":"Anand Prasanna, managing partner at Iron Pillar, is not one to sugar-coat the realities of entrepreneurship. In a…\n","protected":false},"author":2,"featured_media":138940,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15],"tags":[58534,86231,114,52055,86232,293,85,86230,46],"class_list":{"0":"post-138939","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-entrepreneurship","8":"tag-ai-gold-rush","9":"tag-anand-prasanna","10":"tag-business","11":"tag-deeptech","12":"tag-deeptech-factory","13":"tag-entrepreneurship","14":"tag-il","15":"tag-iron-pillar","16":"tag-israel"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/138939","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=138939"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/138939\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/138940"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=138939"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=138939"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=138939"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}