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Risk averse Indian VCs lack analytical skills
By Saheer Karimbayil | Monday, 12 January 2009, 07:51 Hrs |
5 Comments
Bangalore: "Many Indian venture capitalists (VCs) assess a technology company just like blind men assess an elephant. The VCs need to look at the excel sheets of a particular company to know what exactly that company is doing. They are risk-averse too. This is not a good trait any way," said Sujai Karampuri, founder and CEO of Sloka Telecom. While offering his views on 'Where are VCs failing in India?' at HeadStart and Compute 2009 in Bangalore, Karampuri said that the Indian investors have a tradition of investing only in those companies that are exact replicas of well established firms like Facebook, eBay, Amazon and others as they don't want to take the risk of experimenting on a new idea with their money.
It has been some years that many Indian entrepreneurs have been finding it very difficult get VC funding for their ideas. And hence, so many Indian VCs have been drawing flaks from the entrepreneur community in India. Though the other side of the story is that perhaps this assessment about Indian VCs is out of the frustration that many entrepreneurs have been constantly unsuccessful in delivering their business plan pitch to investors, a general assumption is that VCs in India lack analytical skill, when it comes to dealing with IT companies.
According to Karampuri, entrepreneurs and VCs in India differ on so many factors including risk, vision and consistency. While entrepreneurs are ready to take risk, VCs want them to present a business plan sans any risk. In the case of vision entrepreneurs set a long term goal but investors always look for a short-term based return. If a company got fund from two or more investors, a consistency problem arises. One investor may like a particular plan while the other one is still opposing the same plan.
Karampuri supported the notion of 'God syndrome' of VCs in India and said that approaching a VC here is a daunting task. For him most of the VCs are not interested in Indian technology companies.
It has been some years that many Indian entrepreneurs have been finding it very difficult get VC funding for their ideas. And hence, so many Indian VCs have been drawing flaks from the entrepreneur community in India. Though the other side of the story is that perhaps this assessment about Indian VCs is out of the frustration that many entrepreneurs have been constantly unsuccessful in delivering their business plan pitch to investors, a general assumption is that VCs in India lack analytical skill, when it comes to dealing with IT companies.
According to Karampuri, entrepreneurs and VCs in India differ on so many factors including risk, vision and consistency. While entrepreneurs are ready to take risk, VCs want them to present a business plan sans any risk. In the case of vision entrepreneurs set a long term goal but investors always look for a short-term based return. If a company got fund from two or more investors, a consistency problem arises. One investor may like a particular plan while the other one is still opposing the same plan.
Karampuri supported the notion of 'God syndrome' of VCs in India and said that approaching a VC here is a daunting task. For him most of the VCs are not interested in Indian technology companies.
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Reader's comments(5)
1:
Till the end of article I was wondering what VC means.
Then I think I got it, it is venture capilatist. Tell me if I am wrong.
And I would like the authors to mention the long name at least once so people get to understand.
Then I think I got it, it is venture capilatist. Tell me if I am wrong.
And I would like the authors to mention the long name at least once so people get to understand.
Posted by:$wap
- 12 Jan, 2009
2:
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hotel check Replied to: $wap
- 22 Aug, 2010
3:
The trend in which VCs are currently keeping a tight hold over their purse strings, im sure they should be cautios about their selection too.
Posted by:rahil
- 11 Jan, 2009
4:
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hotel check Replied to: rahil
- 22 Aug, 2010
5:
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Posted by:hotel check
- 22 Aug, 2010
Beautiful and dress selection, please go to Dresses
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