Build what matters or what gets funded? India’s VCs say the real gap sits in the founder’s head

There is no spreadsheet to determine whether a startup matters or not. The panel discussion at Huddle Global 2026 highlighted the fact that venture capital decisions do not always align with what truly matters. The speakers, Madhukar Bhatia, Anil Joshi, and Aditya Agarwal, emphasized that "what matters" depends on one's perspective.

They advised founders to focus on customers—understanding the problem, its uniqueness, and the potential for scaling—rather than relying solely on investor perceptions. While the difference between what matters and what gets funded can seem narrow, it is often more a matter of mindset. Founders preoccupied with impressing investors may struggle to secure funding, while those focused on solving real customer problems tend to attract investors.

The panel also acknowledged that not all impactful companies fit within a venture capital portfolio. For instance, some funds have limited theses and cannot stray from them, even if certain companies seem promising. Investors also admitted to making mistakes, such as passing on successful companies due to a lack of alignment with their investment criteria.

The discussion further highlighted the disparity between revenue-generating businesses and those that can compound returns. While the latter may matter greatly, they often do not meet venture capital's high return expectations. Additionally, not all growth paths are suitable for venture backing. Slow and steady growth, while legitimate, might not be attractive to investors seeking dramatic returns.

The panel underscored the importance of depth, with investors seeking founders who have deep industry knowledge and established relationships. An example was provided of a company in electronics manufacturing services (EMS), which, despite initial skepticism, found success because the founders had extensive industry experience. Lastly, the panel highlighted the significance of a founder's passion and mission.

A healthtech investment made in 2019, for instance, survived the COVID-19 pandemic due to the founder's unwavering commitment to addressing tobacco-related health issues in India. The takeaway from the panel was that building something meaningful requires a founder's deep understanding of the problem, coupled with an investor's willingness to fund it based on realistic expectations and the founder's proven commitment to the venture.