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Business News/ Mint-lounge / Abhay Pandey | The money trail
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Abhay Pandey | The money trail

Abhay Pandey | The money trail

The go-to man: Pandey.Premium

The go-to man: Pandey.

Private equity fund Sequoia Capital has, over the last five years in India, invested a billion dollars in 60 different companies, in sectors ranging from e-commerce to fast food. We spoke to managing director Abhay Pandey on what funds look for in investors. Edited excerpts from the interview:

What do you look for when you invest in a business ?

The go-to man: Pandey.

• A unique product or service .

• Single-mindedness about the business; it should be something the entrepreneur is spending all his time and energy on. He shouldn’t have too many diversions and side interests—“by the way I also like horse-riding, that is my passion" sort of thing .

• The entrepreneur’s track record, whether from a previous job, business or institution.

• The ability to assemble a good, well-qualified team.

Is there a particular profile of entrepreneur you look for?

We look for single-minded commitment to the project.

Is there a particular format or structure you look for when you receive a funding proposal?

No. If you have a good business, come to us. We can sit down and look at your business and if necessary, hire someone or find a consultant to put together the relevant numbers. We are not investors who are hoping that someone dresses up the bride and brings her to us.

For one of our investee companies, Indore-based Prakaash Snacks, an unsophisticated company in a small town, we spent a long time setting up processes. We liked them so much, we spent as much as 14 months setting up the entire finance function, generating the numbers, monitoring them, doing the due diligence, the valuation. And having to closely guard the entire process.

How important is it for an entrepreneur seeking funds to have good communication skills?

There are two aspects to communication—one is the content of what you say and the second is how you say it . What you say is usually a reflection of what you’re thinking and how you deliver it is a function of your schooling, social background, etc. We care about what you say and not about the polish of how you say it.

As an entrepreneur, you should be able to clearly say what exactly it is that you’re doing, what markets you’re addressing , what the product/service is about and what are the credentials of your management team. If you can put this on a presentation or even a piece of paper, that’s good enough.

What are some of the funding myths you encounter?

• That investors want to control the company or dictate the way you do business. Most investors have no desire to control or tell you how to run your business. They want to be around and to help to the extent possible.

• That investors’ and entrepreneurs’ growth aspirations vary . It is a myth that there is a misalignment, it may be so for a very brief period before disinvestment, but for the most part both investors and entrepreneurs would like to see the company grow.

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Published: 11 Mar 2012, 08:10 PM IST
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