Bangalore: For the founders of Lakshya, a coaching school in Patiala for aspirants to Indian Institutes of Technology, or IITs, 27 February is an important day in the history of the start-up. That was the day the company was chosen as one of the five winners from some 588 entries at Tata NEN Hottest Startups, a contest to choose the most innovative start-ups in India.
Way to go: (left) Phanindra Sama, chief executive, redBus.in, and Vamsi Krishna, co-founder and executive director, Lakshya.
Today, the firm is not only getting mentorship from renowned names in the industry, it’s also getting calls from venture capital, or VC, investors. “It has been great for the last (few weeks). VCs are approaching us. Experts like Ashish Gupta (managing director, Helion Venture Partners) and IIM (Indian Institutes of Management) professors are mentoring us on our business plans for the next 18 months, which include scaling up in a sustainable manner,” says Vamsi Krishna, co-founder and executive director.
As India’s start-up ecosystem begins to spread wings, the focus is shifting to contests that are attracting start-ups by the hordes and strategies to mentor such firms to help them scale up.
Nine companies, which participated in start-up showcase events such as Proto.in, HeadStart, or those organized by The Indus Entrepreneurs, or TiE, shared their experiences with Mint and unanimously agreed that these platforms bring much needed visibility, access to industry experts and mentorship, venture capitalists, and even future customers to fledgling firms.
Bangalore-based Phanindra Sama, chief executive of redBus.in, India’s first organized bus ticket booking service, says his company would not have shaped up the way it has if it weren’t for the mentoring he received in 2006 after being shortlisted at a TiE event. The firm, which had not launched services when it was shortlisted, received mentoring from Sanjay Anandram, managing director, JumpStartUp Fund Advisors Pvt. Ltd; Kiranbir Nag, vice-president, SVB India Advisors Pvt. Ltd; and Ashok Yernani, former India head of Bandspeed.
These mentors, who started working with the firm in July 2006, a month before the launch of the redBus service, advised Sama and his team to create software for customers and not just bus operators, as was the plan then. “I feel that was the best decision we took,” says Sama. “We got VC funding because we had a strong business model; and the model was due to our mentors.” In February 2007, the firm raised Rs2.5 crore from Seedfund (Seed Advisors Pvt. Ltd).
Photo printing portal Picsquare.com, recently acquired by Ahmedabad-based Infibeam.com, received more than mentorship. It got angel funding with the help of the TiE entrepreneurship acceleration programme, or TiE-EAP, and brought Sanjay Swami, chief executive, mChek India Payment Systems Pvt. Ltd, as its chief mentor. Swami later became an angel investor in the firm. “Start-ups do not get visibility, and they are short of revenues and cannot go for advertising,” says Kartik Jain, co-founder, Picsquare.com.
Also, as these events feature firms working on innovative ideas and products, people eager to work for them also get a chance to know them. “Not many people join start-ups. When you showcase, people become more aware of you and may come to join you,” says Sujai Karampuri, co-founder and chief executive, Sloka Telecom Pvt. Ltd, which makes wireless equipment.
It was shortlisted for Proto.in and National Association of Software and Services Companies’, or Nasscom’s, 100 IT Innovators 2007.
One in every seven firms making presentations gets funding, according to Vijay Anand, founder, Proto.in which has so far showcased 80 start-ups. Anand says he feels such events have come a long way since the time when they had to explain what a start-up was, though there is still a long way to go. “It is still hard to find mentors for start-ups; early stage funding, though a little eased, isn’t yet freely accessible, government interactions are limited and access to foreign markets are certainly very limited,” he says.
To make it easier for entrepreneurs in India’s smaller towns, HeadStart Foundation, which organizes the HeadStart showcase event for start-ups, is coming up with an online portal listing mentors who will give 20 hours of free advice. Also, it is tying up with an educational institute in Bangalore for an incubation centre, HeadStart founder Kallol Borah, however, would not provide details.
Though such events and the networking that follows help break the initial wall of invisibility between promoters and investors, they do not ensure funding.
“It is a myth that you will get (funded) just because you presented at such an event,” says Pranav Bhasin, founder and chief executive, Lifeblob, an online social media company, adding that after-presentation talks are mostly about how to improve your business idea.