“Lack on funding” is an often quoted reason when it comes to discussing about hurdles related to entrepreneurship in India.
Other related quotes are “Indian VC’s dont invest unless there’s a proven team or the idea has been successful in the West”.
I wanted to get a first hand VC perspective about this and so approached Ashish Gupta from Helion Venture Partners for his feedback about such statements.
His response is below:
If one looks at the companies funded in india, many of them do not fit either category. It will be good to look at the data published by venture intelligence on amount invested in ventures in india – I suspect it will be in 100s of millions per annum – still small from a global perpective but large compared to the number of funds on the ground.
Most investors are NOT trying to emulate US style companies because they are aware of the fact that india is a different kettle of fish. Proven teams is also a tricky concept – “proven in what” is the question. Just because someone has been an exec does not mean they make a good exec – and there are not many “repeat proven entrepreneurs” in india who are looking for financing.
I think that the situation is much more complex. In general worldwide very few companies get financed even after they are conceived. And this will get even fewer. It is already the case in India that fewer startups get financed than in the bay area. for a few different reasons – the main of which is that there is less money to invest and hence everyone tries to optimize the investment as much as they can. Much like an individual investor determining what stock to purchase and tries to find the most likely one to appreciate.
I dont have a first hand experience at attempting to raise funding in India — but if you do, let me know if your experience. However, based on some of the startups that have raised funding, I tend to agree with Ashish — they dont emulate western startups and neither do the founders have past entrepreneurial success.
