Over the last two decades, venture capital has changed how we think about building companies; and, in many ways, made our thinking very narrow. Its model, exemplified by companies such as Uber, Ola and Flipkart, is built around a particular proposition: Identify a large market, invest substantial capital ahead of revenues, grow rapidly, eliminate competition, capture market share and ultimately build a dominant business. For certain businesses, this model is exactly right.
Think about social networks and technology platforms such as Facebook, Instagram, TikTok and WeChat. These businesses often have winner-takes-all (or winner-takes-most) economics. The more people who join a network, the more valuable it becomes to users, advertisers and businesses. Meta's platforms, including Facebook, Instagram and WhatsApp, now reach billions of people, while China's WeChat has evolved from a messaging service into an ecosystem encompassing payments, shopping and other everyday services. Once a platform reaches this scale, its competitive advantage can become enormous. Financing years of losses can therefore make economic sense because the prize at the end is exceptionally large.
There are also businesses where investment has to happen years ahead of revenues. Drug discovery and other deep-tech businesses are obvious examples. Billions are spent on research and development long before a commercial product generates revenue.
But most businesses do not have these economics. Not every business needs to burn cash. Not every industry is winner-takes-all. Not every successful company needs to become a unicorn.
India has already produced companies that challenge conventional assumptions about how successful businesses are built. Sridhar Vembu's Zoho built a global software business without venture capital, while MapmyIndia spent decades developing digital maps and location technology now used by companies such as Amazon, Flipkart, Apple, Uber and Paytm. Wingify built a profitable global software business without external funding, with customers including Microsoft, Disney and Lenovo, before attracting private equity investment.
By applying the same unconventional thinking, other companies have also achieved remarkable scale by recognising opportunities that established businesses had overlooked. PhysicsWallah grew from Alakh Pandey's YouTube lessons into a major education business, building a loyal student base before raising venture capital. In financial services, AU Small Finance Bank began by financing commercial vehicles for borrowers underserved by traditional banks, while Equitas built its business around microfinance, including small loans to women entrepreneurs. Both expanded into much larger financial institutions and secured small finance bank licences from the Reserve Bank of India. Their journeys demonstrate how businesses serving overlooked markets, solving specialised problems or investing patiently in their capabilities can achieve remarkable scale without necessarily following the conventional venture capital playbook.
Some of India's biggest opportunities today are in healthcare, manufacturing, logistics, speciality chemicals, engineering, food services and consumer businesses. Many already have customers, revenues, employees, assets and profits, and have been operating successfully for decades.
In many industries, coexistence, specialisation and steady expansion can create enormous value. A hospital does not need to drive every competitor out of business to become a leading healthcare provider. A restaurant chain can be highly profitable without dominating the entire market. An engineering company can build a valuable global business by excelling at serving a particular set of customers or solving a specific problem in the value chain.
There is, however, one important lesson worth taking from venture capital: ambition. VC-backed businesses encourage entrepreneurs to set bigger goals, take calculated risks and pursue growth beyond what they might otherwise consider possible. Traditional businesses, including many family-owned enterprises, have much to learn from this approach.
Many of these companies are run with a single lens: profitability. Given that they are self-funded, that is understandable. But protecting today's profit can come at the expense of tomorrow's growth and therefore tomorrow's value. If investing ₹10 crore today can create ₹50 crore or ₹100 crore of long-term value, not spending the money is not necessarily financial discipline. Capital efficiency and capital avoidance are not the same thing. The question should be: What is the highest-value use of the next rupee?
India's nominal economy grows at roughly 10% over long periods, including inflation. Large companies might grow at 12–15%, while mid-sized companies can potentially grow at 20–25%. For a smaller company that wants to become genuinely large, 30% growth should be an ambition worth pursuing; and 50% may be appropriate in the early years. But 30–50% growth does not happen simply by working harder.
A company looking to grow may need to enter new cities or international markets, strengthen its distribution network, invest in technology, expand production capacity, hire experienced managers or acquire other businesses. Sustaining annual growth of 30% or more also means moving beyond a business that depends entirely on its founder. This requires professional management, stronger systems, sound financial controls and better governance.
Such expansion comes at a cost. Investments in people, infrastructure and technology require substantial capital, often reducing profitability in the short term even as they lay the foundation for long-term growth.
This is where the traditional funding debate becomes too narrow. We often present founders with two choices: remain bootstrapped and profitable, or raise venture capital; play the valuation game and pursue hypergrowth. There is a huge universe between "bootstrapped forever" and "constantly raising another round."
These may not be venture capital opportunities, but they are certainly private capital opportunities. As family wealth in India becomes institutionalised, family offices can provide patient capital to businesses that don't fit the traditional venture model. They can support expansion, acquisitions, professional management and the transition from a promoter-driven business to an institution.
The opportunity is to find businesses already growing at 15–20% and ask: what happens if additional capital, stronger management, better technology and a more ambitious expansion strategy help them grow at 30%+ for the next five or ten years? The result could be an extraordinary company, even if nobody ever calls it a startup.
My gut feeling is that India's next great companies may not all emerge from incubators or startup accelerators. The next generation of ₹10,000-crore and ₹1-lakh-crore businesses may already be among us, operating factories, hospitals, restaurants, warehouses and consumer businesses across the country.
The opportunity for private capital is not to become the next VC in town, but to recognise the great company hiding inside an already good business and provide the capital, management and ambition needed to realise its full potential.
Having spent the past decade looking at hundreds of pitch decks every year, I have come to believe that some of India's most exciting investment opportunities may be businesses that have never put together a pitch deck at all.
For founders and local businesses, the message is simple: don't feel left behind, and don't feel the need to copy the VC model. Take the ambition, pursue growth, build professional organisations and strong governance and attract the right kind of Indian capital to fund the right kind of growth.
And India's next unicorn may not be a VC-backed startup at all.
