Five Indian start-ups made in economic slowdown & lessons they offer
The year 2011 saw close to 200 deals in early stage startups, this was the highest in the past 10 years. Ernst & Young data on deals shows that in 2010, venture funds contributed 15% in volume terms and 5% in value terms (PE plus early stage funding). In 2011, early-stage funding comprised 35% in volume and 10% in value terms.
Mentors - that's a big difference. That's what makes Silicon Valley a hotbed for startups. That's what was missing in India. But things are changing. Over the past few years, many angel investors have come up - Mumbai Angel, Indian Angel, Chennai Angel networks etc. These are groups of seasoned entrepreneurs who have money, experience and are willing to spare some time to mentor and seed young startups.
"In India we had PEs and a few VC funds. Below that, we had nothing. We were the first ones to launch," says Mahesh Murthy, founder of Bangalore-based Seedfund.
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The rise in investor interest mirrors well the entrepreneurial talent that is entering the fray. Scores of successful executives are quitting cushy jobs to turn entrepreneurs.
There are two factors driving this trend. One, fatter pay packets in corporate India allows executives to build a financial cushion and plunge into entrepreneurship. Secondly, most have working spouses whose incomes fund the expenses of households, offsetting the risks.
There are plenty of role models too. Successful entrepreneurs like Makemytrip's Deep Kalra have made it big in a short span. Makemytrip started in 2000 and is today worth $800 million-plus. One of every eight air tickets booked in the country is via Makemytrip.
Launching a company even in the best of times is not for the faint of heart. Doing so in an inhospitable economic environment requires true grit and supreme confidence. Many Indian entrepreneurs have shown just these traits by starting companies in the middle of the worst global slowdown since the Great Depression.
Dosa Plaza: How Prem Ganapathy built Rs 30 crore empire with seed capital of just Rs 1000
First generation entrepreneurs, they quit plush postings at Adobe & Yahoo and took nearly a year to fine-tune their concept.