As I look for seed investment opportunities I have narrowed my focus to critical mass plays ( Rs 500 per year from a million user type plays) that could potentially provide 400 crore exits in 4-7 years.
As the Indian economy expands some wealth creation has to come from companies that are just starting and my guess is that there will be atleast a hundred such 400 crore + companies in the next 7 years.
One of the key things I look for in entrepreneurs is the ability to accept “delayed gratification” and the ability to deploy capital efficiently. In an Indian context “delayed gratification” could mean taking a CTC of Rs 20000 a month while your peers get say Rs80000 per month. Sometimes the delayed gratification can take very long and it may never happen.
Like someone said you cannot have a baby in one month by getting nine women pregnant.
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Hi
Been reading this interesting post, thought would add my own experience. We too have faced this confusion – how much do you pay yourselves?
Our investors left this decision to us but with a caveat in the early few months – don’t cash starve the company and please don’t let the PL accounts show little profits as all of them went to ‘Senior Mgmt salary’.
That made a lot of sense, so regardless of what the profile of the founders (or their pre-company days salary), the decision to be able to dwar it should be on the company’s capabilities to earn it for you.
And if the company is not in that state currently – the founders should take the max hit.
Pallavi
Hi Rakesh,
You know people who have ideas will never have money and those who have money will never have ideas, from this concept only the concept of Venture Capitalisim came..So basically VC’s are people who invests in companies and will take some stake in the company and may some times also brings experienced persons into the board and management and will also provide strategic guidance as well.(well search the net for more on VC’s and to get inspired try reading about sabheer bhatia and hotmail or the google story).
Now for your second question…..normally nobody prefers to invest in a partnership firm..so the first step is to convert your company into a PVT ltd and remember when some body needs to invest IN YOU , U..DEFNITELY SHOULD need a good accounting and book keeping system in place.
Also it’s always try to get your product into the market..build your brand ..create value..and then aproach a VC (so to start with go for Friends, Family….ur wife’s wedding ring in the first place….in the second place….when u r sure u r doing well..look for some seed capital or an angel investor(some body who is in the industry and who is looking forward for some investment opurtunities) and then create ur brand and value..go for a VC raise your first round of funding……and finally after many years an IPO.
Anyway am not an expert to coment much on this,,but justw ant to give u some idea on how VC’s work…..
Now for seeding we have Mahesh Murthy’s seedfund(http://www.seedfund.in)..then there is band of angels for angel funding..mumbai angels and delhi angels and Trivandrum angels in kerala
But rakesh…just do your home work well before aproaching any one..entreprenuership is not about ..having an idea..running to a VC..getting funded and..it’s a lot difficult..but u can defnitely do it if you have the determination!
So best of luck for all ur business initiatives!
I started a small single owner boot-strapped company in mobile area few months back.
A-I do not take any salary. It is really pinching very hard…really hard….
B-I am in a new city adjacent to a large city. There were 12-16 hour per day power cuts in our area from jan 10 to jan 25. I have only 3 hour power back up. The power cuts are normally 3 to 6 hours per day. This is just a saare jahanse ghatia.
I am already into stress and anxiety. Is it better to move the business to some other country. singapore, malayasia, UK, USA…?
What all of you think?
i am a tiny entrepreneur,wants to grow big.Can sb give me any idea about the modus operandi of venture capital funds.Are there any who take interest in tiny proprietorship firms.
Anish,
Thanks for sharing your story and I hope your startup does really well. You bring up a very interesting point which has intrigued me for sometime. If one wants to start small, a nationwide presence is not necessary. One state or even one city may be good enough to refine your model. Just as your geographical focus is reasonably sharp you may want to sharpen your product focus as well. Naukri for long stayed just with jobs and it may succeed with its other initiatives but I am not sure it will. My bias is to dominate a category before moving onto others but I have seen quite a few successes where that approach was not followed.