The recently concluded TiEcon Delhi 2006 gave young entrepreneurs the rare chance to have a peek into the minds of venture capitalists, who have become the middlemen for a great idea to become a success story.
A survey conducted by TiEcon among venture capitalists found that VCs are more interested to fund in the areas of mobile (10) and Internet (9) than any other areas.
Among the other areas, consumer segment (7) led over services (6), hi-tech (4), non-tech (1). “There are more than sufficient deals but not enough good deals,” said Kanwaljit Singh, MD and Investment Advisor, Helion Venture Partners. Responding to the findings, Singh said, “The consumer segment is in the third position because its gives scalability.”
Agreeing to the survey results, Sandeep Singhal, MD, Sequoia Capital India Advisors, said, “The survey result is quite on expected lines as that’s where the market is in India.” Commenting on what made a deal attractive, Singhal said, “One should be focusing on a large enough market and should have a complementary management team.”
On the question of what VCs looked for in a deal, the survey found that most see sustainable differentiation (7) as the key followed by an experienced team (6). Good business model (5), large market (5) and a well-rounded team (4) are also found to be good dealmakers.
When the same question was put to the VC panel, they listed passion, clarity of thought, market opportunity, customer need and opportunity to make money as what they took into consideration before funding a project.
Speaking at a panel discussion on ‘Moulding Ideas Into Reality,’ J Murugavel, CEO, Bharatmatrimony Group, said, “The ecosystem has changed a lot now. If one has a great idea one should go for VC funding as it needs huge investments these days.”
Alok Singh, CEO, Novatium Solutions, said, “Investor relation is not just for money, at times the ideas from the VCs is more important than the money.”
“Apart from money one should look for quality of investment: Whether the investors can help in particular areas and whether they can link you to the world market,” said Romy Juneja, Founder and COO, MobileNxt.
Asked when the idea was at the seed stage, how one could convince VCs for funding, Juneja said, “One should remember that the investors are backing the team and the idea for financial reasons. So, one should be able to tell the breakeven and profitability time periods.”
Subash Lingareddy, Founder and CFO, Ocimum Biosolutions, said, “One should not make too detail a plan. He should keep flexibility as it is the key to adapt to changing times.”
TiEcon Delhi 2006: ‘Disruptive technologies forcing big media companies to rethink their strategy’