Golden Sparrow - Q3, 2025 Newsletter
Golden Sparrow is an $8 million India-focused, early-stage fund. We invest in Rare Birds across Deep Tech and AI Infra.
“Play long-term games with long-term people.” — Naval Ravikant
Graduation Time
Fund I is nearing the end of its deployment phase.
Like watching our portfolio companies take flight, it feels like sending kids off to college—the nurturing ahead will be more about scaling than building. We have 2 investments left before closing out our fund’s 18 investments and turning our attention to Fund II. Over the past 30 months since launch, we have proven three critical hypotheses that define our approach.
Access Matters. We source through proactive outbound, targeted referrals, and compounding founder relationships. This approach has surfaced an eclectic mix across Deep Tech and AI infrastructure. We have co-invested with tier-I firms such as Village Global (founded by LinkedIn’s Reid Hoffman) and partnered locally with Speciale, Pi Ventures and YourNest. High-quality co-investors do not validate our process, but they are a positive signal.
Ownership leverage. Across our first 16 investments, our average entry stake was 3.6%. After an assumed dilution, a single $900M exit would return about 3x on an $8M fund. That is a meaningful see-through ownership for LPs and keeps an overall 5x-10x outcome within reach.
Selection drives returns. While these are early signals of our trajectory, our fund is clocking a 1.2x TVPI and 1.3x MOIC, following recent fundraises. Our performance—while directional at this stage—already places us in the top 10th percentile among 2,500+ peers by TVPI, fund size, and vintage according to Carta.
By The Numbers
LPs in the fund: 62
Investments as of end of this quarter: 16 (up from 15 in Q2)
Number of Deep Tech investments: 7
Number of AI Infra and Applications investments: 9
% of fund deployed: 83% (up from 75% in Q2)
1:1 founder discussions held: 83
Due Diligences conducted: 5
Fund controlled by female LPs: 28%
Expert Venture Partners: 5
Full-time talent at the fund: 2
TVPI: 1.2x MOIC: 1.3x
Inside Bio Manufacturing
We just led our largest initial investment: $0.5M in a manufacturing company.
A scientist from our network flagged an lab opening on social media. After digging deeper, we met co-founders who have spent a decade engineering industrial-scale protein extraction from insects.
Their idea is to engineer the black soldier fly as living bio-factories. After enzymes, they will produce proteins and lipids for the therapeutics space. Next in line are recombinant proteins. This is a platform-first strategy. We partnered closely with our Biotech Venture Partner, JB Michel, on diligence.
We wrapped up our diligence in weeks and became the first venture capital investor on their cap table.
Rarely do raw commercial focus, infectious energy, and breakthrough science align so neatly when searching for the ideal founder.
Ideal Founder-type
Deep Tech requires different muscles. We underwrite science risk and back founders who turn lab discoveries into products. The hardest challenge is finding scientists who can sell, listen to customers, and build teams.
I recently urged a quantum Ph.D. team to recruit an external CEO. Silence followed.
As Deep Tech moves from research to development, two paths appear. In one, technology dies on the hill as Ph.D. teams chase an ultimate product. Watching breakthrough materials or cancer-therapy platforms fade is the hardest part of running a Deep Tech fund.
In the other, founders pair scientific depth with realistic milestones, anchor use cases, and team-building. Commercial instinct matters as much as technical depth when crossing the pre-Series A valley.
A third path emerges when founders become Chief Scientists and recruit a CEO. Morphing Machines chose this path where two IISc professors made room on the cap table for Deepak, fresh from Stanford, to lead.
A new archetype is rising. Young founders with limited experience but strong technical velocity and learning agility. The latest YC batch — a US accelerator— exemplifies this where the median founder age was 24 versus 30 in 2022, with the youngest just 17. Almost half are building AI agents.
We are paying attention to this cohort.
India’s Deep Tech Status
Deep Tech was meant to be a quarter of the portfolio; it is now half. After a few early SaaS bets, we leaned into Deep Tech and AI Infra. Breakthrough science builds over 7–10 years, yet exits can land sooner as milestones clear within a fund cycle.
Our barbell portfolio splits into two: long-duration platforms in reconfigurable semiconductors, nanorobotics, quantum photonics and insect-based biomanufacturing; and faster AI Infra across data infrastructure, agent trust layers and GPU virtualization. We de-risk with a prepared-minds approach to diligence and leveraging our Venture Partners to support our portfolio companies.
Dedicated pre-seed Deep Tech capital remains thin: Pi, YourNest, and Speciale are rare India-based exceptions. Second-stage capital is forming: the $1B Indian Deep Tech Alliance and the $12B RDI program lower Series A–B risk. Yali and Celesta (a global Deep Tech investor) both recently announced $100M+ dedicated India-focused Deep Tech funds. When our company’s potential is global, foreign funds follow, as with e-commerce and fintech a decade ago.
Indian Deep Tech raised $1.3B in 2024, up 78% year over year; 2025 is now pacing similarly and now represents 15% of total fundraising.
India and the world
My cousin Adam in California imports Indian linen for US sales. A 50% US tarrif on Indian imports—framed as punishment for Delhi’s Russian oil purchases—stalled his business. Firms like his have found new supply routes in Bangladesh and SEA - but ultimately China, with a lower tarrif, comes out ahead.
The hit to GDP could be about 0.5%, yet India stays in a 6%+ growth lane on domestic demand and rising export competitiveness. Over the next five years, semiconductors should jump from $70 billion to $250 billion and EVs / batteries from $10 billion to $50 billion. Momentum is largely driven by home demand. Softer inflation, easing rates, a recent credit rating upgrade and more rational taxes should add lift.
Politically, it is bruising for Modi even as Delhi tests an alternative world order with China, Russia and Iran. It is mostly for show. Bans on Chinese investment and direct flights remain. India and the United States will likely find a landing zone before year-end - but recent talks of a cost to H-1Bs visas won’t help.
Indian equities have remained flat year-to-date despite 120-plus IPO deals, about 8% of global proceeds. India remains in high demand with global investors.
As McKinsey’s Vivek Pandit put it, “India is a highly valued market, so that is just an entry point question.”
Looking Ahead
Building on Fund I’s momentum, we are launching a $20M, US-structured Fund II in early 2026. We are planning twenty investments across Deep Tech and AI infrastructure.
The intentionally small fund size, true early-stage focus, and aligned carry incentives across our Venture Partners and team position us for what comes next. Our target is to return 5x gross over 10 years as India transitions from engineering-led to entrepreneurial powerhouse.
We will expand the team with a senior hire in Bangalore. Michael, our venture partner in the US will take on an expanded role working more closely with our portfolio companies.
We invest early and for the long term, backing exceptional engineering talent from India and its diaspora.
Thank you for being a part of the journey. See you here next quarter.
Rishaad