Frugality Cannot Apply to Risk-Taking: Ronnie Screwvala

I don’t have a philosophical answer about what money meant to me. When I decided to start out on my own, my parents told me they would support me morally, but there was no way they could financially bail me out if anything went wrong.

This became a great equaliser. Your sense of entitlement drops to zero, while the fire in your belly goes to hundred. This became my base value and remained so over the years. 

Low entitlement means you don’t take things for granted. Frugality becomes a way of life—not in the sense of cutting corners, but in being thoughtful about resources.  

At the same time, frugality cannot apply to risk-taking. If I had been conservative about risk, I would never have built anything meaningful. Success requires taking risks and accepting failures along the way.

A first-generation entrepreneur is someone who isn’t inheriting a business or wealth. If you inherit either, you are not really starting from base camp. 

Risk-taking changes significantly when you are a first-generation entrepreneur because you have less to fall back on. Many people see that as a disadvantage. I see it as an advantage. The fact that you have less to fall back on can actually sharpen your focus and determination.

I think the idea that people start businesses solely to exit them is largely a myth. Most entrepreneurs don’t begin with that objective. 

If you start building a company with the sole intention of selling it in five years, then the question becomes: whose vision are you building? Your own or that of some hypothetical future buyer? That’s a very difficult way to build a business. 

There are exceptions, such as technology innovations or patents, where someone may spend a few years developing something specifically to sell to a larger company. But that wasn’t my mindset. 

In our case, Disney was already a shareholder, a board member and a long-term partner. We worked together successfully for several years. When they eventually expressed interest in acquiring the company, it made a strategic sense. 

Disney was a brand far larger than anything we had built. It would create greater opportunities for our people. It was also a natural home for the business because they could take it to the next level. 

As a first-generation entrepreneur who had mostly operated on borrowed money and had never experienced a liquidity event, it also felt like the right crossroads. In media, you are constantly raising capital to grow, which gradually dilutes your ownership. The Disney offer came at a stage where it made sense to say yes.

The first thing wealth did was reduce my debt, which is always a good thing. Being able to clear personal debt creates immediate relief. 

Second, it gave me more room to think about my priorities and pace myself differently in life. 

My appetite for risk remained largely unchanged. I wasn’t suddenly willing to take bigger risks because I had more money. In fact, the risks I took earlier, when I had nothing, were arguably much bigger.   

Philanthropic work was the biggest shift. My wife and I had been running a not-for-profit foundation, but it lacked the resources to scale in the way we wanted. In the first six months after the liquidity event, we had serious conversations about how we could expand the impact of our not-for-profit initiatives. That gave us a new set of possibilities to pursue.

In my view, there is no single definition of a family office. Different people approach it differently. The term itself has, to some extent, been popularised by bankers who wanted to create structures, trusts and advisory frameworks around wealth management. As a result, it often becomes more layered and complicated than it needs to be.  

For a first-generation entrepreneur, a family office often comes into the picture after a liquidity event. It becomes a vehicle for thinking about how to reinvest and begin a new journey. For others, it may simply be a way to manage investments outside their core business, whether in public companies, mutual funds or other asset classes.

I don’t think it had that kind of grand vision. It was primarily an operating company for the various things I wanted to do. It served as an investment vehicle, but also as an operating entity for media projects, sports teams and other businesses I wanted to pursue personally. 

Importantly, I never wanted it to take the conventional family-office route. Wealth managers often approached me with ideas around trusts and complex structures, but that wasn’t what I wanted. I didn’t want a trust structure or a hierarchy. I wasn’t interested in sitting on large amounts of idle cash. I wanted to back my own businesses. 

The businesses I wanted to support were primarily in venture capital and private equity rather than public markets. That offered the potential for outsized returns while also giving me the satisfaction of being closer to the businesses I was investing in.

I look at investments through four different lenses.  

The first is our not-for-profit work. Here, the focus is on building scalable impact. We wanted to be an execution-oriented foundation with our own teams and entrepreneurial mindset. If CSR [corporate social responsibility] funding came in, that was helpful, but we were committed to funding whatever was necessary to achieve our annual and long-term goals. 

The second is what I call passion projects, which mainly included content creation after my Disney non-compete ended and our sports teams. My non-negotiable here was complete freedom. I wanted to use my own capital rather than depend on partners, co-producers or outside investors. Passion projects, to me, are about having the freedom to say “no” 99 times and “yes” only once. 

The third bucket is my own business, UpGrad. When I started it, my non-negotiable was that I did not want to raise external funding for the first four to five years. I wanted to build it with my own capital. That strengthened conviction, reduced distractions and allowed me to focus entirely on execution rather than fundraising. 

The fourth bucket is venture capital investing. Here, the key variables are the founder and the sector. Today, the sectors that excite me most are space, robotics, deep tech and AI [artificial intelligence]. These are the areas where I’m not an operator myself, so interacting with founders helps me learn and understand emerging industries. 

So, the priorities were different in each case: scale and impact for philanthropy, independence for passion projects, conviction and control for UpGrad, and exceptional founders in exciting sectors for venture investing.

When I say selective, I’m not suggesting that others aren’t selective. I’m only talking about myself. 

For me, being selective means focusing on sectors that I find deeply interesting or where I believe the upside could be 30x or 40x. It also means investing where I feel I can genuinely add value to founders. 

I’ve always had a high appetite for risk. But I would also say my ratio of failures to successes has been roughly eight to two. 

The key point is that failures are usually minus-one outcomes. A bad investment, a bad hire or a bad decision might go to zero. But the successes can be 40x outcomes. If you’re willing to absorb many small failures, the occasional big success can more than compensate for them. 

The reason this matters in the context of family offices is that the DNA of how an entrepreneur built a business—the risks they took, the failures they experienced and the way they think about opportunities, eventually becomes the DNA of how they manage their capital as well.

For me, the distinction is very clear. 

Everything I do is about value creation, except when it comes to not-for-profit work. If something is a not-for-profit initiative, then it should be judged entirely on impact.  

At the same time, impact is not limited to philanthropy. Even in media and sports, there is impact. Movies can influence people’s lives and decisions. A film can inspire someone to join the armed forces or shape the way they think. So, impact exists across many sectors. 

The key difference is that if you are running a for-profit business, your responsibility is to optimise value creation. You cannot run it with mixed objectives or compromise on that purpose. Conversely, if you are running a not-for-profit, then everything should be focused on creating and measuring impact. 

One of the problems in philanthropy is that people often give money away without measuring outcomes. That is why having an execution-oriented foundation like Swades is so important. We can directly see and evaluate the impact we are creating. 

Increasingly, many family offices are setting up their own foundations or NGOs, and I think that is a positive development because it allows people to engage directly with outcomes rather than simply writing cheques.

I don’t think there is a misunderstanding. That doesn’t mean every path is right or wrong, it simply means entrepreneurs are choosing different paths based on their own goals. 

For example, if someone wants to raise $100mn, I may not choose that route myself, but that doesn’t make it the wrong path. It’s simply their choice. 

What I would say is that entrepreneurs who come from a position of entitlement often have a different outlook on life. At the same time, there are many founders who are perfectly happy building small- and medium-sized businesses. They have a different view of money, fundraising, scale and success. 

Today, we tend to focus only on the small percentage of founders who raise large amounts of capital and become highly visible. But the beauty of the current ecosystem is that founders can now start businesses much faster than they could a few years ago. They can do it with fewer people, fewer resources and generate their first revenue much sooner than was possible three years ago.

First, spend time introspecting about what you genuinely want to do for the next 20 years. What is the thing that excites you the most? 

If your immediate answer is, ‘I just want to invest in other people’, then I would encourage you to probe deeper. What exactly about investing excites you? Two years from now, will you still find it fulfilling to sit through updates from your portfolio companies? Will you continue learning, growing and feeling challenged? Or are you simply attracted to the aura of being known as an investor? 

You also need to think about the opportunities you may miss. One of the biggest sources of stress today is the feeling of constantly wondering whether you are ahead or falling behind. That restlessness never really goes away. Whether you are building your first company or have already had an exit, there will always be a part of you wondering what opportunities you are missing because the world is changing so quickly. 

If you make seven or eight angel investments, you also need to understand that the bad news arrives first. The companies that fail will fail early. The ones that merely survive will take time. Real successes may take five or six years to emerge. You have to ask yourself whether that is the learning curve you want and whether, along the way, you will keep wondering if you could have built something better yourself. 

The second thing is to remain consistent with your relationship with money. Whatever your philosophy towards money was when you started your business, try not to recalibrate it dramatically after your exit. 

Don’t increase your risk profile simply because you now have money. Stay true to the DNA that helped you create wealth in the first place. If you suddenly start taking risks that are inconsistent with who you are, you may end up eroding wealth instead of creating it.