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Venture Capital in India - Part 1

For the past six months or so, I have been reading a lot about the abundance of venture capital availability in India.

Key Learnings for me:

1.There are several Silicon Valley driven VC funds that have set up or setting up a base in India, especially in Bangalore.

2.However, the perception among entrepreneurs is that there is very little traction in terms of seed capital investment. Most VCs seem to be playing the role of private equity investors, than true venture capitalists.

3.The VC funds on the other hand are bemoaning the lack of really good ideas from Indian entrepreneurs, lack of strong and focused teams, lack of robust revenue models, and an overall weak eco system that encourages seed/angel investment.

4.Most, if not all, of the entrepreneurs seem to be US-returned techies or business people with the capacity to invest their own funds at the seed stage.

Questions:

1.What do we need to do to create a truly vibrant ecosystem for entrepreneurship and VC activity in India?
2.The activity seems to be limited to Bangalore, Delhi, Bombay and may be Chennai. What about other cities like Hyderabad, Pune, Mysore, Vizag and so on? How do we reach entrepreneurs/tap good ideas from these places? And then what about entrepreneurship for the semi-urban and rural India?
3.How does an aspiring entrepreneur go about creating a team, seeking angel/seed investment, and build momentum? What are the resources, programs available that would lend them a helping hand?

I have found some answers by searching on the Internet. Listing some of the resources below. Hope they are helpful. If you know any good resources, please mail me the same and I will keep adding to the list.

Articles Page on Frank Demmler's site with links to many writeups on technology entrepreneurship.

Seven Common Mistakes Entrepreneurs Make in Initial VC Pitch and How to fix them

Among the many good posts on Sramana Mitra's blog site, this is one on - Too Much Money, Too Few Deals'. Great post and some good comments.

Seed Funding in India - Prove your idea with a Prototype

Venture Woods is probably one of the best sites for entrepreneurs in India. Here's a sampler on -"New Seed Funds- Right Time, Right Place, and Right Model". Book mark this site and keep visiting often.

Band of Angels web site.

VC Circle - A very good source for articles, ideas and news on VC Activity in India.

I think the above list is a decent start.Will keep updating this blog with new links.

Comments

Kumar,
On reaching out to entrepreneurs in non-metors:
We need success stories from the hinter land. The unconference phenomenon( BarCamp, MoMo) is a good way for entrepreneurs to connect - and getting an unconference organized in non-metros will happen soon enough.

Aside: IMO, Venture Capital could also dampen innovation: Just like domestic IT is hurt by the lucrative overseas IT.
Kumar Narasimha said…
Balaji,

May be there are a few hinterland success stories already, although on a small scale? You are right, we need to take the unconferences to them.I am moving back to India next week and hope to get involved with these events.

Would like to read your views (in detail)on why VC could dampen innovation in India.

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