Headline investments and unicorn exits are no longer the only markers of success as venture capital enters a more disciplined phase. Every successful fund relies on a complex operational system that oversees LP trust, regulatory demands, governance, data infrastructure, and scaled portfolio management. In this conversation withEconomic Times Digital, Sandesha Jaitapkar, Chief Operating Officer,Artha Group, explains why the future of venture capital may depend as much on operational excellence as on investment instinct. Edited excerpts.

Economic Times (ET): VC is often seen as a deal-driven business. From your vantage point as COO, what are the invisible operational levers that actually determine whether a fund succeeds or struggles over multiple cycles?
Sandesha Jaitapkar (SJ): A VC celebrates its deals and its exits. The machinery underneath, the parts no one photographs at a demo day, is where funds are won or lost across cycles. The invisible operational levers are divided into four parts.

The first is information architecture. How a fund captures, organises, and retrieves knowledge about sectors, founders, and market signals determines how quickly it can underwrite decisions. At Artha, we have invested in building proprietary databases that track not just our portfolio but the broader ecosystem we operate in. A team that can surface relevant context in hours rather than days exhibits a compounding edge.

The second lever is capital deployment discipline: commitment tracking, follow-on reserve models, fee and carry waterfalls. These require meticulous back-office rigour. Errors here do not surface immediately; they emerge as embarrassments during audits or LP reviews three years in.

The third lever is relationship infrastructure. Every meaningful LP relationship, co-investor connection, and founder touchpoint needs to be maintained with consistency. That requires systems that do not depend on one person’s memory.

And finally, talent and culture within the fund itself. The operational disciplined culture you build internally signals to founders exactly what to expect from you as a board member. If we are disorganised internally, founders notice.

ET: As Artha Group scaled its AUM to Rs2,300 crore plus, what were the most critical inflection points where operational infrastructure had to evolve, and what tends to break if it does not?
SJ: Every fundraise is also an operational audit. The infrastructure that works beautifully at Rs 100 crore AUM will quietly crack at Rs 400 crore and catastrophically break at Rs 800 crore. Identifying those thresholds in advance and building ahead of them is the COO’s central mandate.

The first inflection point for us was moving from relationship-based LP reporting to institutionalised reporting. When LPs are friends-and-family or angel-tier, a quarterly call and a summary email suffice. Once you have family offices, HNIs, and institutional limited partners in the cap table, they expect audited financials, NAV statements, IRR calculations by cohort, ESG disclosures, and structured governance documentation. Retrofitting these systems mid-fund is a painful task.

The second inflection point was portfolio monitoring at scale. Managing 20 companies is a people problem; managing 135 is a systems problem. We built standardised MIS frameworks that all portfolio companies submit to, and an internal team capable of synthesising signals across the portfolio on a rolling basis.

The third was compliance and regulatory infrastructure. As AUM grows and the LP base diversifies, including NRIs, foreign LPs, or DFIs; the regulatory complexity of SEBI AIF Category II obligations, FEMA compliance, and transfer pricing documentation multiplies significantly.

What is at stake if you do not evolve? First, LP trust. Second, your team: good investment professionals leave funds that feel chaotic. Third, your deal-making reputation, because founders also conduct due diligence on you.

ET: In a more selective investment climate, how are LP expectations changing, particularly around transparency, reporting, and governance? What does institutional-grade really mean in practice today?
SJ: The phrase institutional-grade has been used so liberally in venture that it is running the risk of becoming hollow. In practice, I define it across four dimensions: process rigour, reporting transparency, governance independence, and conflict management.

Process rigour means having documented investment policies: a written IPS, sector mandates, cheque-size guardrails, and follow-on criteria that an LP can audit. It means investment committee minutes that reflect genuine deliberation, not post-hoc ratification.

Reporting transparency means quarterly NAV statements with methodology disclosed, not just cherry-picked mark-ups. It means disclosing write-downs honestly and in a timely manner. LPs understand that venture is a loss-heavy business; what they cannot forgive is selective opacity.

Governance independence means having structures in place: advisory committees, independent valuation reviews, third-party fund administrators, that prevent conflicts of interest from contaminating decision-making.

LP expectations have tightened considerably post-2021. Today’s LPs ask hard questions about portfolio markdowns and DPI, not just TVPI. Showing NAV is necessary but not sufficient. Showing cash is what matters.

ET: LP trust is often tested during downturns rather than boom cycles. How do you structure communication and reporting to maintain credibility when portfolio performance is under pressure?
SJ: The test of an LP relationship is not the vintage year celebration call. It is the conversation when a marquee portfolio company has missed its Series B milestone or taken a down round.

Our philosophy at Artha has always been: communicate early, communicate honestly, and come with a plan. An LP finding out about a portfolio problem from media rather than from us would be akin to fundamental failure of relationship management.

What builds credibility during stress is demonstrating that you saw the problem, had a thesis about what to do, and executed. LPs are sophisticated enough to understand that not every bet pays off. What they are watching is whether the GP’s decision-making and honesty hold up under pressure.

We also resist the temptation to over-report good news in boom times and go quiet in corrections. Cadence consistency itself is a governance signal.

ET: With exposure to over 135 portfolio companies, what consistent patterns have you observed that distinguish breakout startups, and how do those insights feed back into fund operations and decision-making?
SJ: After working across 135 portfolio companies spanning multiple sectors and stages, the patterns that separate breakout companies from good-but-not-great ones are more about organisational DNA than product or market.

The first pattern is founder-market velocity: the best founders do not just understand their market; they learn faster than the market moves. They arrive at first-principles insight ahead of others and can articulate what will hold true 18 months from now.

The second is capital efficiency discipline. Breakout companies in our portfolio have consistently had a sharper instinct for when to spend and when to conserve. They build durable unit economics before scaling, even under external pressure to grow at any cost.

The third is team architecture. Founders who build teams of people obviously better than themselves in their respective domains create breakout companies. Founders who hire for comfort are building lifestyle businesses.

These insights feed directly back into fund operations. They shape how we evaluate founders at the pre-investment stage, what operational support programmes we build, and how we structure board engagement. We have codified some of these into a founder readiness framework that our portfolio team uses for post-investment reviews.

ET: The role of a VC COO is still not widely understood. How does operating a venture fund differ from running operations inside a startup, and why is this role becoming central to fund performance?
SJ: This is a distinction the Indian VC ecosystem is only beginning to appreciate. Running operations inside a startup means optimising for speed, product-market fit, and resource deployment within a single organisation. The feedback loops are fast. The metrics are relatively clear.

Running operations within a venture fund is a fundamentally different mandate. You are simultaneously the CFO, legal interface, compliance officer, LP relations manager, talent and culture builder, and the person responsible for fund-level risk management. Critically, you are doing this while also building and maintaining relationships with over a hundred portfolio companies, being useful to them without overstepping.

The fund COO role also carries a longer accountability horizon. A mistake in LP documentation or fund structure does not manifest for years. You are making decisions today that will determine whether Fund IV is raiseable in 2029.

What makes this role increasingly central to fund performance is the professionalisation of the asset class. As LPs become more sophisticated and regulatory requirements become more demanding, the GP’s ability to raise and deploy capital efficiently is increasingly dependent on the quality of their operational backbone. Investors are no longer just evaluating the investment team. They are evaluating whether the fund is well-run, and whether the GP’s values are reflected in their governance.

In short, the COO is the person who makes sure the fund deserves the trust LPs have placed in it.

ET: Talent is a challenge both within VC firms and across portfolio companies. How do you approach building internal teams while also guiding founders on scaling theirs effectively?
SJ: There is an inherent credibility requirement here. If we are advising founders on how to build high-performance organisations, we need to hold ourselves to the same standard internally.

Inside Artha, we have taken a deliberate approach to building a team that mirrors the diversity of insight we need: investment professionals who engage deeply with founders on product and strategy, operational staff with finance and compliance depth, and platform professionals who add value to portfolio companies on talent, marketing, and fundraising.

The hardest thing about building a VC team is that it is a small organisation with an asymmetric performance culture. A few decisions generate the majority of returns. This can create dynamics where process and collaboration may feel undervalued. We have worked hard to build a culture where rigour is celebrated, not just conviction.

On the portfolio side, we operate a structured talent programme combining executive search relationships, an internal talent database, and peer learning forums among our founders. The most common talent challenge we see is the transition from a scrappy generalist team to a more specialised organisation as companies scale from Seed to Series A and beyond. Founders consistently underestimate how quickly their personal hiring bandwidth becomes the bottleneck.

We try to help founders see talent as a strategic capability, not a reactive function. And we try to model that ourselves.

ET: Looking ahead, as venture capital becomes more disciplined and less momentum-driven, what operational capabilities will separate enduring funds from those that struggle to raise subsequent vehicles?
SJ: Venture capital is going through a necessary reckoning. The decade of cheap capital and multiple expansion trained a generation of GPs to conflate momentum with insight. That era is over, and what remains is a genuine test of operational and intellectual capability.

The funds that will endure share several qualities. First, a genuine data and knowledge infrastructure: not a dashboard, but a systematic way of building proprietary insight about markets and founders that compounds over time. This is an epistemology, not a CRM.

Second, the LP relationship depth that goes beyond the raise cycle. The funds that maintain quarterly dialogue, honest reporting, and genuine engagement through the correction will find it meaningfully easier to access capital in the next cycle. LP networks built on shallow transactions will not survive.

Third, portfolio value creation capabilities that go beyond capital. At the seed and early stage, the best funds have built genuine platforms: talent networks, go-to-market support, and regulatory navigation that give portfolio companies a durable edge. This is expensive and hard to build, and it is not easily replicable by newer entrants.

Fourth, and perhaps the most important one: governance integrity. The managers who stayed the course on ethical governance, transparent valuation, and LP-first decision making when it was inconvenient will find that trust is a compound asset. In a more disciplined market, LPs will allocate to people they trust, not just people with a hot track record from a bull market.

The enduring funds are built for the long game from day one.