From boardroom to startup: This private equity firm is looking for experienced managers to build new businesses

The mid-market private equity firm is actively seeking experienced professionals to build new businesses in consumer businesses, education, financial services and enterprise software.

“We have an entire generation of professional managers who had no opportunity to start a business in their twenties and thirties. Now more and more people are interested in starting a business,” Gopal Jain, co-founder and managing partner at Gaja Capital, told Mint.

“It goes both ways – sometimes we approach people and sometimes they approach us,” he added.

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Last month, Gaja Capital and venture capital fund Lok Capital agreed to invest $Weaver Services, an affordable housing finance startup founded by former executives of mortgage lender HDFC Ltd earlier this year, invested Rs 800 crore.

Domestic private equity firms have made similar investments before. Gaja Capital first invested in RBL Bank Ltd in 2010 when the private sector lender was led by former Bank of America MD and CEO Vishwavir Ahuja. Gaja Capital has since diluted its stake in RBL.

“The starting point is a space and a management team,” Jayne said. “In order for it to become a reality, we need to find something worth buying – an asset where we can tap into the market potential. Additionally, we need to make sure we can buy it at the right price.”

Entrepreneurship ramp

Jain was clear that he was looking for potential entrepreneurs to build businesses with private equity firms.

A professional should be an expert in a large addressable market area and have successfully managed and expanded a business. “It is crucial for such professionals to have the ability to source deals. Some claim to be vertical experts but fail to identify viable targets,” Jain added.

He is also looking for leaders who can build a core team to work with them on new business ventures. “If someone can’t get people to work with them, it could be a sign that they’re not effective at managing people,” Jain said.

While Gaya’s check will come later, its involvement begins earlier, from refining the idea and identifying potential deals to negotiating the deal. Currently, in addition to conversations with professionals, Gaja is looking to acquire early-stage companies and accelerate their growth.

“It’s more capital efficient because if you’re willing to buy a small amount of an asset, you have more purchasing power than if you were going after an asset that 100 investors wanted to buy…” Jain said.

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Private equity firms typically retain majority control of the company in such deals, said Aakash Choubey, a partner at law firm Khaitan & Co. While management teams benefit from equity and other incentives, these may be limited, he said. “These conditions may limit management’s ability to sell stock, exercise full control or explore other opportunities,” Jobey added.

Mumbai-based Gaja Capital, founded in 2004, prefers investing through acquisitions and growth capital. The company has raised more than $800 million across four funds, with the latest raising $400 million in 2023.

Jain declined to comment on an Economic Times report earlier this month that Gaja Capital was considering an IPO and had appointed IIFL Securities to manage the issue.

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