Sixty start-ups. Fifteen venture capitalists (VCs). Eight hours. Day-1 of TiE-ISB Connect 2007, the annual networking event for entrepreneurs, was a jamboree of business pitches. Organized by The Indus Entrepreneurs (TiE) and the Indian School of Business (ISB) in Hyderabad last week, the third chapter of the event showcased 42 business plans and 18 elevator pitches (brief, five-minute pitches to VCs).
While the showcase featured companies from popular VC areas, such as consumer Internet, software and mobile services, it also saw start-ups across various sectors such as retail (Blink), analytics (Customer XPS), lifestyle (Timber Trail, Habits), energy (BioDel, Kakatiya Energy), flower delivery (Right Florist, Shrubs) and hotel chains (The Green Wok). The average age of company founders ranged from the mid-20s to mid-30s. The youngest, perhaps, was 16-year-old Abhinav Aggarwal, co-founder of Mumbai-based education resource portal Exampapersonline.com. VCs on the panel included Sherpalo Ventures’ Sandeep Murthy, Footprint Ventures’ Josh Bornstein, Bluerun Ventures’ Sasha Mirchandani and Erasmic Venture Fund’s Subrata Mitra.
Unlike other business plan showcases, such as IIT Bombay’s Eureka, TiE’s event is not a competition. “We do the matchmaking between VCs and entrepreneurs, then it is up to them to pursue it,” said Sateesh Andra, venture partner, Draper Fisher Jurvetson, who has been part of the TiE-ISB Connect’s organizingteam for the last three years. The firms that presented plans at the showcase were shortlisted from 400 initial entries.
In the next three to five years, TiE wants to create case studies of successful companies that emerge from this event—companies that have either been funded by VCs or received strategic investments since they presented their plans at the showcase. Andra cites examples of past selections—Hyderabad-based Ocimum Biosolutions, which received $6.5 million (Rs25.5 crore) from IFC, the investment arm of the World Bank in November 2006 and software services company SDG Software Technologies, which was acquired by 3i Infotech Ltd in late 2005.
As TiE wants to refrain from hosting a competition, and VCs are not committed to making investments, there is no tangible reward for start-ups. The panel of VCs, however, serves as a sounding board for these companies. “We needed a mentor who could give us strategic inputs and guide us, more than we needed funding,” said Venkatesh Goteti, co-founder of movie portal Moviegaga.com. The founders bootstrap the portal with capital earned from another of their ventures, Azri Solutions. Goteti said he found panellists who offered to mentor him after the presentation. In some cases, start-ups were also asked to follow up with VCs after the event.
Not enough mentoring
Both start-ups and VCs felt the need for more mentoring from the organizers prior to the event. While some start-ups were precise and articulate in their presentation, others were not so well prepared. Companies were informed of the final selection about three weeks before D-day, which did not leave much time. “Most companies knew the format in which they had to present, but some could have done a better job with more mentoring,” said Josh Bornstein, partner, Footprint Ventures.
Most mature start-ups
Most VCs felt the start-ups were mature, with real businesses rather than ideas. The showcase ran in three parallel sessions, with 20 start-ups each. “Of the 20 I reviewed, at least four-five had done their groundwork and analysis of the problem they were addressing,” said Subrata Mitra, partner, Erasmic Venture Fund. Most start-ups were looking for funding between Rs2 crore and Rs5 crore. Web conferencing start-up DimDim Inc. stood out as an odd choice, as it had raised close to $2.5 million funding from Nexus India Capital and Index Ventures early this year.
Nearly 100 start-ups and 40 VC’s attended the three day event. Clearstone Ventures’ Rahul Khanna, in a role reversal, was pitching their portfolio companies to ISB students, in a bid to recruit good talent. The session on Internet and mobile ran parallel with Life Sciences, the one on Emerging Technology ran parallel with Retail. In both cases, the tech-related sessions were overcrowded, while there were many empty seats in the parallel tracks. Elevator pitches were cut to three minutes instead of five, due to lack of time.