The Worlds Greatest Investment Bankers Will Have 1.5 Bad Years Out Of 5
Why I Am Still Funding A Loss-Making Business. And How IDEX Compounded 500x Since 1991.
How to live a rich life? The internet is flooded with noise and negativity. I focus on stories that make me a better human being, entrepreneur and friend.
Here are this weeks three short stories:
Why I Am Still Funding A Loss-Making Business
The Worlds Greatest Investment Bankers Will Have 1.5 Bad Years Out Of 5
How IDEX Compounded 500x Since 1991
You can find all past editions here. Let’s dive in 👇
(1) Why I Am Still Funding A Loss-Making Business
One of my businesses, Happy Ratio, spent -979,262 INR more than it made last month.
Every month I go through every line item of every spend for everything that I'm involved in. It's a simple imperfect system I have followed for years. It allows me to know where I, my businesses and my investments stand at the end of each month. Just knowing helps remove a lot of anxiety related to money.
I download all my accounts into an excel tab, and they all add up to common summary on a main sheet. This allows me to compare month on month and year on year trends with ease. This takes me 2-4 hours each month.
Regarding the above loss, I sat with my manager and we went through the numbers together. We then went through the core issue, which in this case is a lack of brand and marketing exposure which is also tied into the budget constraints we have as we have run out of investor money and I am now funding the business. Then we went through this big plan we have to 10x the results.
I helped strategize this plan. The team has refined it over the past couple of months. We are optimistic that it would work.
But this is business. If I have learnt anything in the last 20 years of building businesses it is that shit usually never goes up and to the right as you wish. It's always a wiggly line that goes up and down and acts erratically.
So my attitude towards building businesses has always been to give it my all so that if we don't achieve what we set out to do I can still look at myself and everyone involved and say that we left no stone unturned. That we gave it our all. And what we learnt will be a stepping stone for the big things to come, whether that is together or on our separate journeys.
If next month and the month after we continue to outspend what we make, I shall fund it personally till we can crack the jigsaw puzzle in this great game called business 🧩. We have got initial product market fit which is why I believe we are just a spark away from a bonfire.
(2) The Worlds Greatest Investment Bankers Will Have 1.5 Bad Years Out Of 5
Investment banking has long held a kind of mythic status—high stakes, late nights, million-dollar deals, and early-career burnout. When I graduated from business school with a finance degree, I wondered if I could break in, do billion-dollar M&A, and maybe become a millionaire in my 20s. I devoured books like Monkey Business and Liar’s Poker to get a sense of what that life really looked like.
I never did become a banker but I’ve spent my career working closely with them, helping teams close deals faster through Virtual Data Rooms. So when I got the chance to sit down with Ashish Ambwani, Managing Director at Incred Capital, and a veteran of 17 years in investment banking, I saw it as a chance to get the unvarnished truth about the job, the mindset, and the craft of dealmaking.
This is from episode two of Masters of the Deal. Here is a clip:
Below are my favorite questions and answers from our conversation.
As you go up from an analyst to an MD at an investment bank, what changes?
Here is what Ashish said:
Rather than focusing on what changes, first focus on what doesn't change. Irrespective of who you are in an investment bank, the analytical portion doesn't go away. That's a constant. If you don't understand your prospective client or clients businesses to some degree of competence, you don't deserve to give them any advice.
You should understand what the public or private markets are telling you at that point in time. This is all analysis. These are the basics.
When investment bankers are hired, we don't hire them for their technical abilities. We hire them for their ability to digest large amounts of information and come back with some insights. As you go up the rank information and judgment gets sharper and clearer. Clients are not interested in large information. They want situation, plans and recommendations.
The sales skills starts becoming more important up the ranks. But you need to understand the sector. For example, if you've never seen an infra project, don't understand how economics works, or don't understand the cost of capital or IRR, it is unlikely that a supreme sales guy is going to be able to add value to an infra client. Sales skills develop in context.
Investment banking is an apprenticeship business. You learn from your MDs and it allows you to develop your own style. You learn from good people. You may struggle to become a good dealmaker. But the skills compound in the last third of your career.
As long as you've done the input variable right and you've got a little mastery in your craft, that's all you can hope for. The higher you go up the food chain, you realize the lesser is in your hands. We can do inputs we want and end up with zero at the end of the year. So one has to respect that there are forces beyond our control.
The worlds greatest investment bankers will have 1.5 bad years out of 5. Its not that they gave bad advice or were bad. It's just the combination of variables, macro environment, client base, and sector. Its just the way the world works. There will be feasting and famine. One has to make your peace with it. Recognize that one bad year means next year could be good. Don't focus on one year.
Whats the 80/20 that works for deal making?
Our jobs should not be focused on outputs, it should be focused on inputs. We need a portfolio approach in which we have a number of deals running at the same time because we cannot predict which variable will kill which transaction at which point in time. There are variables out of our control that can kill perfectly good deals.
You ability to pick those assignments is where your judgment comes in. Saying no is equally important.
Luck is also a big thing in deal making.
To take a cricket analogy, we need to take the 1s and 2s but we also need to hit that one 6 to make a difference on the P&L.
Great founders have to have a periscope in one eye and a microscope in the other. You have to be like an eagle operating above the field and know when to come in.
How do you build trust?
You're dealing with humans with different personalities. If your personality is robotic and not friendly at all then it'll be a challenge.
We are all aspiring for mastery of our craft or our product. In general if we don't understand the CEOs, funds, or businesses problems to figure out what they are solving for and what are their constraints then we don't deserve to sit at the table.
Irrespective of whether you are hired or not, you should give them the best advice you can muster. Don't beat around the bush. Tell them the reality of the situation. Tell them the truth. Be as transparent as you can be. If you don't have a view on something you can say you don't know. Else just be as transparent. Its all about long term compounding.
We will give you 2x the valuation at 1/2 the time is probably not the right technique if you want to work with credible promoters for a long time.
The market is transactional. Just because you've worked with someone and done a great job four years ago doesn't mean he will work with you again. But you have a better chance of working with him again if you did a great job and were transparent and stayed in touch.
Conclusion
What I appreciated most about Ashish’s perspective was how grounded it is. No buzzwords, no bravado, just hard-won lessons from doing the work. The truth is, investment banking isn’t about looking smart in meetings or pulling off flashy closes. It’s about judgment, resilience, and mastering your inputs while knowing you’ll never fully control the outcome.
But this episode isn’t just about the craft of dealmaking, it’s also about the man behind it. We talk about Ashish’s journey from growing up across India, being born in Calcutta, studying engineering, and eventually graduating from IIM. It’s a window into his unique journey to the top.
And of course, we dig into deals—including the fascinating unbundling of Park Avenue, a transaction between two of India’s biggest corporate houses: Raymond and Godrej. That deal alone is worth the listen to understand the people, patterns, and principles behind great deals.
You can subscribe to get the next episode.
(3) How IDEX Compounded 500x Since 1991
On the one hand I am losing money. On the other I am making money. The third leg of the tripod that should exist in everyones life is that of investing money. I invest with Marcellus and try to learn from the incredible businesses that they invest in, so that I can take those lessons into my own businesses.
Here are my notes on what I learnt, what I’d steal, and why I’d invest in this business with Marcellus.
How did they start?
Started with one blood test for farm animals.
Then expanded to companion animals i.e. pets.
Now it owns the vet diagnostics space.
What made them unstoppable?
• Razor-blade model:
Machines are cheap. Test kits are expensive.
Once a vet installs an IDEXX machine, they rarely switch.
Emotional + operational lock-in.
• Embedded software:
Vets run diagnostics, accounting & clinic ops through IDEXX software.
Switching costs are massive.
• Capital discipline:
No flashy acquisitions.
15% FCF CAGR.
ROCE 40%+.
Margins improved from 20% to 30%.
Returns money to shareholders.
• Focus:
40 years in just one niche — pets & vets.
Didn’t become a pharma, didn’t chase trends.
• Market tailwinds:
Pets are family now.
People will spend $500-$1000 to save them.
Vet shortages + more diagnostics = more IDEXX.
Lessons for us?
Pick your niche.
Go deep, not wide.
Treat capital like blood.
Own the system, not just the product.
Stay at it for decades. That’s how you build a 500x business.
👋 I’m Harsh. 7000+ founders and CXOs read these three short stories from me every Sunday. I also run a podcast called Master of the Deal where I uncover the personal stories and strategies of M&A, private equity, and investment banking leaders.
If you’re curious about what I’m building, here’s where I spend most of my time:
Ideals VDR - We are the world’s most secure and highest rated Virtual Data Room provider. Companies share confidential information using our technology. Here is a short demo.
Happy Ratio - Food and drinks that make you happy, inside and out.
Marcellus Investment Managers - Where my personal investments grow. Their philosophy of investing in clean, honest, cash flow-positive businesses aligns with my approach.
Harsh Batra