Last Thursday, I opened my email inbox to find four almost identical requests from four unrelated and very young entrepreneurs. They read something like this: ”Hi, I’m so and so, I’ve recently started a company called so and so and was wondering if you could help out with the contact details of some venture capitalists.”
The four guys are in the 25-35 age group, three are from Bangalore and one from Mumbai, and all threw up plum on-campus job offers to startup on their own.
Their emails left me wondering whether it is really so difficult to access VCs. Start-ups do often complain that VCs play hard to get and it is next to impossible to get that business plan through the door.
So, as any good journalist would do, I called on a few VCs to get their side of the story. “My mobile number is up on our website. How much more accessible can I get?” asked one based in Delhi. Valid point. “I respond to every new email that drops into my inbox,” said another in Mumbai. Both gentlemen have been entrepreneurs themselves and are known to be particularly sensitive to the breed.
Clearly, though inadvertent, there’s a communication gap somewhere. Getting hold of contact details is really not tough. You just need to spend five minutes on Google. What is tough is getting the right VC to listen to you at the right time and place. And it is exactly at this stage that most start-ups run into a wall and the reasons are these:
• Entrepreneurship is a relatively new phenomenon in India, just three or four years old. The 1999-2000 dotcom phase burned out almost as soon as it started. Therefore, venture capitalists in India are just as raw and inexperienced as start-up entrepreneurs. Both sides are still learning the ropes and it is more likely than not that VCs and start-ups will miss the plot. Give it time.
• Too many entrepreneurs go out looking for venture money before getting the basics in place. It helps to first look for a workshop where the basics can be honed—sometimes just having a well-structured business plan does the trick. If you are in Mumbai, New Delhi or Bangalore, such workshops are held at organizations such as TiE (The Indus Entrepreneurs) or on a business school campus (yes, they are open to non-students as well).
• Finally, ask yourself this question before you even think of the words “venture capital”—Is your business a VC-fundable business? A lot of start-up business may be good ideas but may not necessarily be businesses that a VC would find attractive. The follow-on question would be: What is a VC-fundable business? We’ll answer that question on this page next week.
Snigdha Sengupta is Mint’s resident expert on private equity and venture capital. Comments and questions are welcome at firstname.lastname@example.org