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The first wave

The funding community till recently was characterized by a limited number of publicly silent high profile VCs and angels. Nobody was able to recall a VC’s name till a year ago. This scenario has completely changed after the entry of some star founder-chairmen. Ratan Tata, Azim Premji, Narayana murthy, and also the next gen Bansals, Naveen Tiwaris, Kunal Bahls are making news every day for investing in start-ups. This wave is for sure big as a lot more would join in future.

The exciting part about this wave (apart from money) is the huge strategic value these charismatic leaders bring with them. Imagine Narayanamurthy advising a budding IT services company, or Ratan Tata sitting for review with a start-up that plans to take its company global. The value offered is immense and unquantifiable. For the ecosystem, this is going to translate in to high growth rate and most importantly higher success rates.

The second wave:

By now you must be wondering who else would have such money to invest. There is a community. It made real estate in India a multi-billion dollar industry. It kicked the Sensex so hard that it is refusing to correct. Yes, It is YOU.

The retail investor’s average daily trading in our stock exchanges is over Rs. 4000 crores. They are expected to buy about 2,00,000 houses in 2014-15. A fraction of this can feed the start-up ecosystem comfortably for years.

Current gen start-ups don’t need big money as they are not capital intensive. According to the funding fraternity, the average disbursements to start-ups range from Rs. 5 lakhs to 50 lakhs. This is very much doable for an NRI or for any senior executive in the corporate world. But the key factor is the risk appetite.

The phenomenal success of Kickstarters, Crowdcube and Seedrs confirm that the risk appetite is there and is growing.

So be ready with your boards to take on these waves.

-Narayan

  • http://gravatar.com/cvenugopal cvenugopalVenugopal

    Good perspective. The average stock market investor could very well be a source of startup funding. Could a focused startup mutual fund be the answer?

    • Narayan

      That is a great idea. The benefit is of two folds 1. Reduce the risk of the retail investor who has lesser competence to evaluate a business model and 2. This would channelise the funds to the best of ideas..so startup mutual fund is a big win-win.