Indian VCs keen on higher stake in startups
By Sikta Samantaray   |    8 Comments
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Indian VCs keen on higher stake in startups
Bangalore: Several Indian startup companies are feeling the heat of global slowdown as venture capitalists (VCs) have tightened their procedures to fund in the current conditions. Now, venture capitalists want innovative projects, a higher stake in the company, early profitable returns and non-linear scalability in the business models. As per the early stage entrepreneurs, the venture capitalists have increased the percentage of stakes in the company by nearly 10 percent. Earlier, they used to take around twenty percent which is now hiked up to thirty percent. Even, the rapid potential growth of the company has become a criterion for VCs to invest in a startup organization. Sanjay Swamy, CEO of mChek, which got funded by Draper Fisher Jurvetson, a top tier venture capital firm explains, "VCs want to invest in companies with an increase in developments from all spheres." From a VC's standpoint, Atul Khekade, the Chairman of Netz Capital said that in India especially, it is very difficult to raise start up venture capital. "With recession, an additional criteria of being able to turn profitable early has become a crucial factor," explains Khekade. The VCs have shortened the time frame for their return of investments (ROI), which was around four to six years earlier. This is also because of the fact that the venture capitalists believe that startup companies often get engrossed in technology and miss the real marketing plan. But, many startup entrepreneurs are of a view that venture capitalists should understand the 'bad times' of the economy. Addressing this concern of the early stage entrepreneurs, the venture capitalists are also mentoring the startup enterprises in coming up with a stronger business model and skillful management ideas to ride out the current global slowdown. Sudarshan H.S., CEO of Onze Technologies, said, "VCs have always helped me by advising on the management procedures and also on the financial matters." Though the startup companies say that they face difficulties in funding, the figures state otherwise. U.S. venture capitalists have invested $101 million signing 13 deals in India in the first quarter of the year; reflecting a positive scenario, to step ahead in the venture capital investment. Keeping in view their investment options, almost 45 venture capitalists firm are looking to come together at the Siliconindia Startup City on June 6, 2009 at Bangalore. With over 75 hot startup companies, the VCs are sure to have field day. Click here to know more about Startup City : https://www.siliconindia.com/startupcity_09/index.php

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