In the fast-paced world of startups, a new class of investors is emerging—founders who have built and scaled businesses now backing the next wave of entrepreneurs. Unlike traditional venture capitalists, these founder-investors bring something unique to the table: deep operational experience, an intimate understanding of talent, and a practical perspective on what it takes to succeed.
“Entrepreneurship is a lonely and challenging journey, and I was fortunate to have experienced founders guide me when I was starting out. Now, I see investing as a way to pay it forward,” says Beerud Sheth, Founder and CEO of Gupshup.
Founders-turned-investors understand the pain areas of startups since they have been through similar challenges while starting their own businesses.
“Entrepreneurs with prior knowledge and expertise about the nuances of business operations not only provide the financial support but also the necessary knowledge, contacts and entrepreneurial promptness to undertake decisions intuitively adding more credibility to the ventures,” said a D2C founder, who did wished to be named.
Different roles
Many founders transition into investing, but not always as a full-time role. Instead, they invest selectively in people and markets they deeply understand. Their hands-on experience in building businesses helps them assess startups with greater accuracy than traditional VCs. They can distinguish between a good pitch and a truly scalable business.
Tushar Vashisht, Co-founder & CEO of Healthify, highlights that his investing approach is highly selective.
“I haven’t fully transitioned from a founder to an investor. I invest selectively, backing people whose skills and strengths I’ve observed firsthand over the years or where I identify a unique market opportunity like in AI and health,” he said.
Unlike institutional investors who often take a more active role, founder-investors tend to adopt a hands-off approach. They let entrepreneurs run their businesses while making themselves available for guidance when needed.
“My approach is hands-off. I believe the best investors let founders stay focused while being available when needed,” Vashisht added.
Founders-turned-investors also have a unique perspective on problem-solving. Since they have tackled similar challenges themselves, they can provide sharper, more practical advice.
Founder-investors Their ability to assess talent, identify market opportunities, and offer practical guidance makes them invaluable backers. While they may not take an active role, their strategic input and mentorship can be game-changing for early-stage founders.
