DARE - Because Entrepreneurs Do

'IF EVERYONE IS ON ONE PLATFORM, ONE PLUS ONE WOULD MAKE AN ELEVEN'

The second edition of DARE's Eweek started with Satish Kataria, MD of Springboard Ventures giving his insight on how funding should be carried out to make India a better place for entrepreneurs. “Funding is the biggest challenge that every venture faces”, says Satish. He also added that in a survey conducted by The Economic Times - Synovate sometime last year, only about 58% of the start-ups received mentoring support, meaning a whopping 42% did not have any guidance on how to move beyond ideation.

Some challenges/ insights he discussed:

• Start-ups believe that their resources can come from conventional VC and PE funds. He says that it is a 50 year old model and is going on the down slide.
• Barely 1% of PE funds in India are being given out to early stage ventures.
• Only 47 ventures funded out of the 1000 start-ups which come for funds to the Indian Angel Network and Mumbai Angels.
• Funding from angels is an individual effort, even though the decision is taken on a collective basis. The start-ups are left at the mercy of angels in terms of due diligence and investment monitoring. It also becomes an issue if that angel does not have time to monitor.
• Most of the start-ups look for amounts running up to 20-50 lakhs, but VC funds will not be able to provide that kind of money.
• In India, there must be a handful of people, say 1000, who are aware of the risks involved in investing in start-ups or how to identify the right kind of start-ups to avoid risks. There is a huge lacuna of right education and mind-set.
• No centralized platform where all the start-up enablers can come together and synergize their resources.

Opportunity:
Over the last few years, Start-ups have been focused on IT and mobile technology. But now they getting strong in a lot of other domains which include education, healthcare, social enterprise etc. Hence in terms of domain, the Indian start-ups are gearing up strong, meaning there are huge opportunities for funding in start-ups.

Is resource a problem?:

• No, India has 126 thousand million dollars.
• It has the best of the banks and financial institutions which have raised billions for Indian corporates.

Solutions:

• Co-operation: The existing start-up enablers should come together on one platform and synergize their resources with each other. For instance, Incubators can exchange their mentors, start-up fund houses can share their investment processes. That way one plus one will make eleven, not two!
• Inclusion: To enable more and more people in the Indian entrepreneurial ecosystem. For this one needs investor education. The ecosystem needs to train them on how to invest, where to invest etc. The second thing would be regulatory review. SEBI and RBI should come together to review regulations. The Government will also have to take a proactive measue, for ex:The National Innovation Act has not been passed in the Parliament which gives a lot of benefits to start-ups. By using the provisions of the Act the start-up can attract a considerable amount of funding towards itself.

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Read the reports of first Eweek here.

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