Comments on: Why Indian VCs Need To Be Changing Gears in 2007 http://orbitchange.com/blog/2007/02/26/indian-vcs/ Sharad Sharma examines the transformation challenges facing the software industry Tue, 14 Oct 2008 05:43:39 +0000 http://wordpress.org/?v=2.0.2 by: Ravi Narayan http://orbitchange.com/blog/2007/02/26/indian-vcs/#comment-983 Thu, 08 Mar 2007 10:49:35 +0000 http://orbitchange.com/blog/2007/02/26/indian-vcs/#comment-983 I thought, the presentation packaged the data that most of us in the VC community need in a very crisp and usable fashion. Kudos to Sequoia, IDG Ventures and UTI Venture in taking the lead to make this happen with the Venture Intelligence team. The presentation/report did not come up with any surprises, however. Early stage funding and mentoring is still in its infancy. There is more than $2B sloshing around in committed capital for venture funding but no commensurate deal flow. This makes for major constipation! At the same time, deals in the later stages maybe getting highly overpriced. Mentor Partners is one among several companies that are taking headon the challenge of the weak angel investing ecosystem. We provide early stage entrepreneurs that are looking to build IP-based companies out of India for the global markets. It is a huge task to create successes in this ecosystem, but that is what the partners at Mentor Partners, who are serial entrepreneurs themselves, enjoy doing. The grey hair and scar tissue that we have developed from previous startups are lent to new entrepreneurs. And early money is made available so they can accelerate their progress to "fundability". We have had some early successes and our companies have raised subsequent rounds from the likes of Intel Capital, Blue Run Ventures, Sierra Ventures and Sequoia Capital. The good news is that more players are appearing to fill this gap in major metros in India. Other reputed seed stage funds in India are Erasmic and Seed Fund. I thought, the presentation packaged the data that most of us in the VC community need in a very crisp and usable fashion. Kudos to Sequoia, IDG Ventures and UTI Venture in taking the lead to make this happen with the Venture Intelligence team.

The presentation/report did not come up with any surprises, however. Early stage funding and mentoring is still in its infancy. There is more than $2B sloshing around in committed capital for venture funding but no commensurate deal flow. This makes for major constipation! At the same time, deals in the later stages maybe getting highly overpriced.

Mentor Partners is one among several companies that are taking headon the challenge of the weak angel investing ecosystem. We provide early stage entrepreneurs that are looking to build IP-based companies out of India for the global markets. It is a huge task to create successes in this ecosystem, but that is what the partners at Mentor Partners, who are serial entrepreneurs themselves, enjoy doing. The grey hair and scar tissue that we have developed from previous startups are lent to new entrepreneurs. And early money is made available so they can accelerate their progress to “fundability”. We have had some early successes and our companies have raised subsequent rounds from the likes of Intel Capital, Blue Run Ventures, Sierra Ventures and Sequoia Capital.

The good news is that more players are appearing to fill this gap in major metros in India. Other reputed seed stage funds in India are Erasmic and Seed Fund.

]]> by: Kiranbir http://orbitchange.com/blog/2007/02/26/indian-vcs/#comment-934 Mon, 05 Mar 2007 15:26:15 +0000 http://orbitchange.com/blog/2007/02/26/indian-vcs/#comment-934 Sharad It would be worth studying the nature of the cross border deals - they may not all be India R&D centric deals. Normally Venture Intel categorises those as US deals with Indian founders (many of who have an India dev centre) On the matter of the rise of India out deals, I think its a matter of an evolution process for the VCs. At a level its understandable for them to experiment with the concept arbitrage first while they get comfortable with investing in India and while they build their networks. Further while it would seem intuitive that VCs should brand build to attract the entrepreneurs/intrapreneurs, most VCs strongly believe in generating brand from the deal success stories as opposed to any other way. So they would rather burrow around quietly for a while, unearth a gem and then make it happen There appears to be quite a bit happening on the network building. I hear of VCs digging up contacts and building their network all the time. Close to half a dozen of the big name VCs now have an India footprint. That means people on the ground with networks. Thats a sea change from 2 years ago. I think many of the players have seriously committed to the Indian market so they will make it happen - tho it might take longer than expected. Also, angel investing is defintely rearing its head again. Just 18 months or so ago, I would have been hard pressed to name one credible angel type investor, today there are a few. We still need to showcase a few more success stories to get the juices really flowing KB Sharad
It would be worth studying the nature of the cross border deals - they may not all be India R&D centric deals. Normally Venture Intel categorises those as US deals with Indian founders (many of who have an India dev centre)
On the matter of the rise of India out deals, I think its a matter of an evolution process for the VCs. At a level its understandable for them to experiment with the concept arbitrage first while they get comfortable with investing in India and while they build their networks. Further while it would seem intuitive that VCs should brand build to attract the entrepreneurs/intrapreneurs, most VCs strongly believe in generating brand from the deal success stories as opposed to any other way. So they would rather burrow around quietly for a while, unearth a gem and then make it happen
There appears to be quite a bit happening on the network building. I hear of VCs digging up contacts and building their network all the time. Close to half a dozen of the big name VCs now have an India footprint. That means people on the ground with networks. Thats a sea change from 2 years ago. I think many of the players have seriously committed to the Indian market so they will make it happen - tho it might take longer than expected. Also, angel investing is defintely rearing its head again. Just 18 months or so ago, I would have been hard pressed to name one credible angel type investor, today there are a few.
We still need to showcase a few more success stories to get the juices really flowing
KB

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