Evalueserve has come out with a report on Indian early stage VCs. It points out that the VC activity in India is increasing and soon, there will be as many as 44 early stage VC firms operating in India, with around $4.4b to invest! While my own estimates are on a lower side, whats undeniable is that more money than ever before will be available to early stage companies. I guess this is good news for entrepreneurs.
The report also raises some concerns, notably amongst them:
1. Lack of sales, marketing and business development skills amongst startup teams
2. Narrow investment theses of the VCs targeting Indian market
The real metric of success is how many of these VCs make money in the Indian market, so hold on to the toasts just a wee bit longer…
- Promoters or Entrepreneurs – A choice for Private Equity players - August 3, 2019
- Startup Marathon Mindset - March 25, 2019
- What’s your Customer Culture? - March 4, 2019
Regarding Alok’s concern No 1. I have to agree that some of the startups don’t seem to figure out the basic question – How are we going to make money ?- first. Its always about the cool technology, differentiation etc. While that is the first step, by the time they are ready to do prototyping, testing, pilots etc, they should have atleast figured out who & how they will be able to convert their pilots/beta tests to actual sales. What if there is something basic missing in the technology differentiation ? it might be too late to change the business strategy.
This happens even in the SBU’s of big companies, where there is always the ‘financial backing’ of the parent company. So usually people don’t loose their jobs but get absorbed elsewhere if the product fails.
In B-school, when we were told to write business plans – three basic questions were are asked to present – whats the product/technology, how are going to make money, why no one else has done it before. ?
But in my experience with talking to some really smart entrepreneurs, they love to talk about the technology, but when you ask the latter 2 questions, they fumble. I have wondered whether its just a lack of funding which is preventing them from hiring business people or is it a mindset problem.
Good post Alok. I have made a comment on my blog http://www.global-themes.com
Shantanu
well, Gridstone is US headquartered, and not just technically. Most of the core team operates out of there. Barings, where I worked earlier, has an angel investment in the company. Gridstone and a lot of other US startups, have far better planning, execution and packaging skills than we see in most startups in India. While VCs can certainly help to a certain extent, IMHO the onus of this lies on the entrepreneurs…
Krish,
From http://www.gridstoneresearch.com/company.htm
“Gridstone Research is incorporated in the US and is headquartered in San Mateo, California. Gridstone’s Research operations are located in Mumbai, India, and operate as a wholly-owned subsidiary.”
So, technically speaking it is a US Company.
-Animesh
Gridstone is not a US based startup since it is in equity research. It’s major customers are located in Global Financial Markets including US, Europe, Singapore, Hongkong, Japan. The research arm indeed is the front end for research outfits and is based out of Mumbai, India.