Nurture Capital: Rethinking Leadership in the Age of AI and Quantum

In this episode of the Leadership Quotient Podcast, Sunil Goyal, Managing Director and Fund Manager at YourNest Venture Capital, shares how decades of experience in capital markets and operating leadership shaped his philosophy of “nurture capital” and what that means for backing deep tech founders in India today. Drawing on lessons from IPOs, private equity, and venture investing, Sunil explains why leadership fundamentals do not change across company stages, but become more demanding in entrepreneurial environments where there are no safeguards and purpose must supply the energy that brand and scale cannot. Sunil and Lindsay explore how YourNest evaluates founders through an unusually intensive diligence process, what it means to assess adaptability, accountability, and emotional intelligence before investing, and why the best leaders are not married to the product but responsive to the market. They also discuss the challenges technical founders face as they transition into people leaders, the importance of creating trust so founders bring bad news early, and why “nurture capital” can help companies navigate difficult moments more effectively than traditional venture support. The conversation closes with a look ahead at leadership in an era shaped by AI and quantum computing, and why the next generation of founders will need even greater humility, resilience, and capacity to align diverse talent around a meaningful purpose.

Transcript

SPEAKER_00 0:00

Welcome to Leadership Quotient, a podcast by The Crucible, where we explore how leadership teams and investor-backed companies are built, aligned, and scaled for impact. I'm your host, Lindsay Gazowski, and in each episode, we'll talk with the people shaping value behind the scenes, from operating partners to investors to advisors to C-suite executives, about what it really takes to drive performance through leadership. On today's episode of the Leadership Quotient Podcast, I chat with Sunil Goyal, managing director and fund manager at Your Nest Venture Capital about the concept of nurture capital, not staying married to the product, and why leadership is going to be more challenging in the age of quantum and AI. Sunil, welcome to Leadership Quotient. I wanted to hear a little bit to set the stage as to how you got into venture investing and walk us through a little bit of your background and leadership journey.

SPEAKER_01 1:12

I am 58 years, living my youthful days. And uh, you know, never ever had imagined that I'm going to be venture capitalist uh someday. However, becoming a portfolio manager, allocator of capital was on the horizon all the time. Very young, 1984, one professor of economics had engraved in me that the one person or one profession that creates value for the economy is an entrepreneur. And that was at the age of 17. And then there's some small negates that kept on happening. Three incidents, 1995, 1, 2001, another, and 2010 was the third one. 95, I was uh part of uh India's homegrown FMCG, fast moving consumer goods company. This was outperforming uh Unilever, PNG, Colgate by revenues, by profits. And uh I was reaching out to fund managers to raise capital for in the initial public offer. And uh the market taught me a biggest lesson of life. This was about uh that yes, you're growing 40% revenue, you're growing 25% profits, you're you know, or you're sucking in too much of working capital. You don't know how to make free cash. If you're not generating free cash like uh Unilever and PNG and Colgate, you're not worth the salt that you're talking about. This was my company, Daber, great learning. Today it's a multi-billion dollar organization. And then I got a chance to work with the India's uh third largest market cap company today, Bharthi Aetel. This is a telecom company. 2001 we raised uh around uh $500 million from the market. Waber Pinkers was the lead private equity investor. Post-listing, even pre-listing, we had to place the shares at 20% discount. And post-listing, the share price went down by 50%. Wow. And despite that, these guys were standing next to Sunil Bharati Mittal, the chairman of uh the Bharti ATL, like a rock solid, telling them that uh you are doing the right things in your firm. Keep doing the right things, don't even look at the stock price. What an important lesson that uh you need to be doing the right things. And today, the share price of the same company is uh nearly maybe I don't know how many times it is like $140 billion in market cap in India. It is uh massive growth. Third incidence, 2010. I was on a sabbatical trying to rediscover myself. 42 years of age, and uh I said to myself that uh I have achieved whatever I wanted to achieve professionally or personally in life. I had made my savings, everything was done. And how do I plan my next phase of career? With my coaches who were guiding me, the best part of my life was 10% month-on-month growth. How to live those growth initiatives and days? It turned out to be startups, and that's the time uh chose venture capital. I never knew this is uh art form which is even more than a passion. It is actually a devotion. So being a venture capitalist is more like a devotion. I've learned it the hard way, but it is a fabulous time to be a venture capitalist today in India, focused on nurturing deep tech startups here.

SPEAKER_00 5:19

And you know, you got to work with some great investors, some very large companies. When you think about the leadership lessons that you learned and the skills and talents that were needed in those environments, how do they translate to considering these nascent startups and this entrepreneurialism in which you're investing today?

SPEAKER_01 5:46

Frankly speaking, uh, nothing changes. Leadership has uh the similar DNA. Only aspect is uh we have to spend lots of time before investing to assess whether this particular founder is going to be living those entrepreneurial traits, leadership traits, will be able to hold teams accountable, will be able to fulfill any promises made by them and uh and stay with that. Whether that particular founder is married to attracting talent, is uh picking insights from the market, adaptable to listening to the market. You know, all those trades are the ones that has to be judged whether I'm going to be hiring a P ⁇ L leader in a large company or I'm going to be putting in money on a young founder who's just come out of a college or uh uh or 10 years of uh work experience and coming up with particular insight. Truly speaking, it is all about living the same ethos. Largely, there is no safeguards in case of an entrepreneurial trade. So, since there are no safeguards, they should be prepared to look up the brighter side and give lots and lots of energy to the team beyond what a large brand does. So the energy has to come in from the purpose the leader is showcasing, and that purpose has to be mega convincing and uh getting the best people to work for them.

SPEAKER_00 7:27

Interesting. And so, how do you go about doing that leadership diligence on the front end to make sure that your entrepreneurs are great, not just great salespeople?

SPEAKER_01 7:42

Yes. We we spend lots and lots of time pre-investment. We have uh between the seven partners, each partner meets them individually. We have our portfolio team, our analyst who comes and interacts with them and puts together the investment case. While being in the space of uh deep tech, there is uh patient, this is a patient capital. We have enough time to be able to evaluate because we are ahead of the curve to be able to pick the areas which nobody else wants to touch. And during that time, in the first meeting itself, the founder is able to assess that we are very different, we are very unique. We are trying to understand him or her as an individual. We are trying to uh showcase as to how many challenges they are going to be facing in the life as a life in the life of an entrepreneurial journey. And what all dimensions they need to be covering. When seven partners interact with them with different dimensions and different quizzing, they are shocked. They are shocked that just by being part of our selection process and elimination process, uh what a learning they go through. So for us, uh, that itself is a proprietary ground of assessing how they do it, uh, with what competences we have to see. Luckily, we have seen 30,000 entrepreneurs by now in the last 15 years. And of the 30,000, we must have met at least uh interacted with 3,000 of them in the last 15 years, and we've invested only in 51. So the kind of diligence that we have to do is only in handful. So 51 startups in 15 years with seven partners, 23 member team, it's like less is more for us. We just do very, very little to be able to nurture or handhold one of the finest leaders to come into our kitty.

SPEAKER_00 9:49

And given that you have a lot of different people analyzing these leaders, yes, do you find that your own interpretations and biases tend to wash out because you have a lot of different voices, or are there particular views that sometimes come into conflict?

SPEAKER_01 10:16

No, we have uh very complementary skill sets uh amongst partners. Uh if uh one person is going deeper and deeper into assessing the leadership traits of the person or anthropological traits of the person, I, for example, will be developing much deeper into business equomen, commercial equomen, uh the the decision making uh with the numbers, uh data backed. Uh other partners of mine will go deeper into the technology mode, the competitive mode, or product market fit uh journey of theirs as to how they're going to be driving uh GTM at a particular point in time. The lens for each one of them is very unique, very different. And we can say no on a basis anyone less, uh any any any lens of it. So, yes, there are biases which are going to be there. The only aspect is we have a respect for the opinion who's a specialist in that area. So we will listen to that particular voice in our investment committee to be able to arrive at that decision. Now, you know, technology is such an area, it's difficult to assess. There is one gentleman who came in 2020 and said that he will be able to charge electric vehicle battery versus it takes eight hours in just 15 minutes. And it was very easy for tech team to say nobody has done in the world in the last 60 years, it just cannot happen. All the batteries will start burning out, hence it's better to walk away. When my leadership uh expert uh goes and meets the team member, the only one thing he says, Sunil, even if uh this founder Arun is going to be failing, he will be doing much bigger things in life. Go partner with him. So one simple statement, and such statements are there while saying no to a startup, while making an effort to get into a relationship for life for them with them.

SPEAKER_00 12:19

Fantastic. Good. Um let's pivot into some examples that people love to hear how all this plays out. Can you highlight one memorable instance where you saw some of these leadership traits, you know, maintaining high standards, having a true sense of purpose, being adaptable, having that authenticity throughout everything they do, where that really played out within a leadership team and yielded greater success than even you guys may have anticipated.

SPEAKER_01 12:55

You know, good that you were asking the positive one. The bad ones also there with us. So let me clear the uh positive one. This was 2018. Sne Waswani of uh ID Mumbai, one of the premier tech institutions, had uh been the second person in the history of that institution to get into Hall of Fames. And uh his passion was robotics. He brings up with the robo for overall development of child. The first explanation is that uh this is uh a toy, a toy for a child to play with, a robo child to play with. And uh, why should one be investing in a, we are a deep tech firm, why should I be investing in a toy company? Lindsay, the thing that happened is that uh this gentleman presented to us evolution of AI over the next 10 years, evolution of compute power over the last next 10 years, and said my product is going to evolve like this, this, this, this, this, etc. Second aspect is when I met him on the commercial side, this is a tech guy, he was able to talk to me around bill of material, about uh FOB, about CIF, about optimizing the cost, about margins, about how how he's going to be driving these things was coming up. The good part is today his product is sold in 140 countries. He is uh scaling up at global level. He last week when uh India had the AI Impact Summit out here, uh, he met the leaders of Google, leaders of Nvidia, leaders of sovereign funds worldwide. Prime Minister of India was met twice by him. Uh so Mr. Narendra Moti uh was met by him twice. Uh so it's it's like an amazing journey when you see companies like that that being built.

SPEAKER_00 14:53

Oh, that's fantastic. Um, you you mentioned the negative side of it. Tell me a little bit about what you see as the biggest challenges these leaders face. Because what I hear from people is you get someone with this great passion. And even if they can do those critical leadership things, they still have to build a team. They still have blind spots that they don't know about themselves. Sometimes that passion goes too far and they can't, you know, hold a mirror up to what's happening. Talk to me about what you've seen it, especially at this Series A and in this deep tech space, you know, for the challenges that entrepreneurs tend to run into.

SPEAKER_01 15:37

You know, this is a very, very important learning for anybody in the area of venture capital. And uh, I believe we have made repeated mistakes on uh on this front. They are passionate founders, uh, they have a very wonderful insight, uh, they have the right team members. But what happens is they stay married to the product. They always continue to think that let me improve my product better, better, better, better, better. And they just not able to go to the market with a minimum viable product, take the market feedback, adopt as per what the customers are saying, and quickly uh give what the customer is wanting, not a very perfected product which is never going to be ready. So, and uh in our 51 companies, this must have happened, I think, four or five times. It's painful, it's very, very painful. How do we transition a chief technology officer, a chief product officer into an entrepreneur, into a good salesperson, into a good commercial leader, into a person who listens to his team? And there are people who have transitioned. We have a company now uh in the United States. Uh I think Nvidia made the last investment, last round. This company is Unifor, UNIPHORE. 2014, we invested in this company. This was a conversational AI company. Uh in 2014, it we used to call it man-to-machine communication out of uh ID Chennai research labs. And uh this this Umesh, the founder, was much more like a product engineer. The attrition in the company, quarter after quarter, board meeting after board meeting, was retaining remaining high. And well, what role we play as nurture capitalist? Good thing is, I had a good session with him. I said, uh Umesh, if you can start doing town halls with your team. He says, Town halls, me as an engineering guy. I said, yes, listen to everybody in your team and see what magic it happens. His attrition came down. Today, Unifor is regarded as one of the people-oriented companies, headquartered in Palo Alto, yeah, with uh much more than $100 million in ARR, scaling up well, yeah, serving global clients.

SPEAKER_00 18:06

That's fantastic. And I think that that's a really critical point that when you stay married to your product, I mean, these are the entrepreneurs' babies. And much like children, as they grow, you have to let them adapt and become what they should be, not just the vision you had for them before they were born.

SPEAKER_01 18:28

Very well said. Very well said. Loved it.

SPEAKER_00 18:33

So being in the tech space, there's a lot of discussion around how these technologies are going to be impacting the workforce and the need for people. Are you seeing leadership becoming more salient, less salient, or just differently salient in this changing environment?

SPEAKER_01 18:57

Just define salient for me here.

SPEAKER_00 19:00

Sure. So it one of the talking points that a lot of investors have had over the last few years is that financial engineering doesn't get you to returns at the same level anymore. You either have to understand your space really well or invest in people. As we move more into this technologically driven, AI-driven world, do you think that that next phase of value creation is coming from having even better leaders and investing more heavily in the people? Is it coming from the ability for supplementing? Is it replacing? Where do you see the value creating coming from on that spectrum?

SPEAKER_01 19:45

Leadership is going to be far more challenging. It is going to be far more demanding of uh anybody who's uh who's trying to create a product, uh getting the adoption out there. We have to now work with far better intellectual people. Many of them are going to be individual contributors. They know how to hit the ball out of the court anytime, every time, kind of stuff. So you there the the these challenges are different. The competitive scenario is uh so intense uh with the AI and the eventually whatever is going to be done by quantum, we don't know from where the new technologies are going to be coming and hitting us, and how quickly are you going to be molding yourself to adapt to the new environment or the new new technologies, or keep your structure such that you're always adapting things. And uh the need, that core need to think like a leader all the time, with humility, with professionalism, uh is a core, core to you know to futures, the uncertain world that we're going to be living in.

SPEAKER_00 21:04

It sounds like that adaptability component that you guys select for is going to be a thread that's needed in your in your vision of where things are headed.

SPEAKER_01 21:15

Yes, yes. And uh in in our uh vision, uh we we also assess uh, you know, I've been a student of conscious capitalism since 2010. It's a very, very important aspect that they are married to a purpose, they are devoted to it, that they know that they are here to do a mega difference, not an incremental difference. And hence uh uh uh that their abilities have to be much more sharpery, sharply defined. Uh and uh they should they they they should demonstrate that emotional intelligence of working with diverse set of opinions. Uh they have to carry their partners along, they have to carry their board members, the investors along. It it's it's uh it's a very different. Art, you're pivoting, you're pivoting continuously, board meeting after board meeting. How do you align everybody? It's an art which is only acquired through emotional intelligence.

SPEAKER_00 22:12

And it sounds like when you think of tech founders 20 years ago, they were people who had really deep knowledge in the space, but people didn't care nearly as much about the empathy and the ability to generate buy-in and that those senses of emotionally intelligent adaptability. How are people developing these skills today? And to your point, it is an art.

SPEAKER_01 22:39

Yes, yes. No, it's not about giving you a good workspace. It's not about giving you food. It is not about a great workplace. This is about uh, you know, does my opinion count when I'm at the workplace? Uh am I able to uh uh get uh socially recognized for uh for my contribution? Uh am I being seen and appreciated on social platforms? Uh uh can I uh demonstrate to my family members uh for giving my 15, 16 hours a day uh to a workplace, to the passion of that particular entrepreneur, that uh uh there is something of uh of a difference for humanity that I'm creating. So the lessons out here for retaining, attracting that talent are very different from uh when companies like uh Google came into being. Uh it is uh today's word is uh these millennials. I don't know how how we will be able to understand them and we are able to understand them and uh give them bigger challenges uh that they they get excited to stay working with us.

SPEAKER_00 24:01

Oh, that's fantastic. And I think that that speaks to some of this generational and media shift that's been happening as to how people need to engage with the work they're doing and engage with those around them. Um when you guys think about how your nest supports entrepreneurs differently than other groups, what's your secret sauce that really makes these entrepreneurs able to launch and fly?

SPEAKER_01 24:35

I think the first step of winning their trust is that uh we will be able to handle bad news. One of the most important elements of uh nurture capital that we live in at uh your nest is only on only that are we able to give them the confidence that come and share the bad news first with us. And are we able to then absorb that news to be able to tell them as to how options can be built in, how scenario painting can be done uh despite uh that uh and you know we've not we've we've been investing in your company for multi-billion dollar outcome. This this you know, a couple of million dollars here and there, and uh uh strategic shifts is is uh losing a customer or a pipeline not building up or some some incident happening in the company uh which made you incur some losses. These are just steps in a journey. This is your learning cycle, uh, and this is your evolving as a leader. I think this is the one single parameter. If you're able to build that trust, we will we will be able to uh act differently than any other VC firm in the country.

SPEAKER_00 26:04

Fantastic. So in closing, I'm curious about where you see the next wave of things coming. We talked about how things are changing today, but what's exciting for you about what's coming?

SPEAKER_01 26:23

Let me quote one scientist I read about. He made a statement that uh our schools have been teaching science in a very wrong manner. The it is said to be a statement of facts that science is all about that this is the only way things will happen. But this scientist said science is all about exploration, it is about discovering new things, getting to me, preparing yourself for the unknown. And the world is now going to be encountering even a bigger wave than AI. Yes, we all rejoice by AI, we know the impacts of that, handling that itself is going to be a big challenge. However, the next wave is right in front of us, it's going to be quantum computing. Yeah. The quantum plus AI is going to be helping we humans discover things we've never been able to imagine. Why God has created nature in this particular manner, why uh you know all living beings act differently, or why they act in a particular manner. All that is unknown to us. There is a lot many things in the universe that we'll be uh that we'll get to know. And hence uh that is what keeps me going. That yes, there are newer technologies that'll shape uh something good and happy for humanities in time to come.

SPEAKER_00 27:58

And that wraps up another inspiring episode of Leadership Quotient. I appreciate Sue Neil for bringing both depth and practical perspective to today's conversation. To our listeners, if you found this conversation valuable, be sure to subscribe to Leadership Quotient wherever you get your podcasts. You can also learn more about The Crucible and how we're helping investor-backed companies align leadership teams for scale at thecrucible.com. We'll see you next time for more real conversations on leadership, talent, and value creation.