An Entrepreneur’s open letter to Venture Capitalists in India

Hello my friend (can I call you a friend?),

I meet you at several conferences, events and other meetings, where we have informal discussions around this topic. I thought I’d gather my thoughts and share some ideas I have on how we can work well together. Mostly though this is about what my ideal investor would be like.

Here’s some background about me:

I am a first-time entrepreneur. I don’t come from a “business family”. Neither do I have a lot of friends and family who are rich. I am only the 1 of about 80 students that finished from my college who wanted to be an entrepreneur. The rest of them got a great job at a large company. So frankly I am the “odd one”. I have ideas, ambition and lots of chutzpah, but besides that I have some skills and an idea. I know you believe that ideas don’t matter, but right now, that and my skills are all I have got.

Here’s my request:

  1. Please be approachable.  I know you are a very busy person. I can imagine you have 100’s of people wanting to talk to you. When you come to an event where you are speaker, please do take some time to “surf the crowd” and introduce yourself. Please don’t rush right-away to your meeting or have the same discussions with the 3-4 members of the panel you know already. I know you’d like us to build a relationship with you, so please do give us an opportunity to do so.
  2. Please be responsive. I understand that you get many emails daily.  Would it be possible to use your downtime (while you are waiting for your coffee or if you are standing in line at the airport security checkpoint) to connect me to someone who can help? If my area of work is not in your investment profile or we are too early stage, can you please point me to someone who would be? It is also okay for you to tell me that this is not something you will invest in, and here are people (angel investors perhaps) who you know that might.
  3. Please be consistent: I like doing my homework, but your website tells me something entirely different from what you actually do. E.g. I went to this VC website that tells me they will consider “pre-revenue” companies but at my first meeting, when I share that I have no paying customers, you tell me to come back when I have revenues. Please be respectful of my time as much as I am of your time. If I don’t fit your criteria, fair enough, but don’t put it on your website and then change your mind.
  4. Please share your thoughts on the trends that you see in the industry & from companies that are pitching to you. I understand confidentiality does not permit you to share all the details, but I’d love to hear major trends you are seeing that you like or don’t like. Since you meet hundreds of entrepreneurs monthly, I’d like to get a snapshot of what you are hearing and seeing. It helps me formulate ideas. Might I suggest a monthly newsletter that I can subscribe to?
  5. Please be open to taking one big risk (each year if you can). Product companies are hard and risky. We as entrepreneurs also want to build the first big product company from India. You realize though that product companies take more time and more effort than services companies. I understand you cannot fund all product companies, but can you please look at companies that require more time and money that will go into research and development for a few years, without significant revenues.

Please feel free to let me know what the ideal entrepreneur would be for you.

11 thoughts on “An Entrepreneur’s open letter to Venture Capitalists in India”

  1. Mukund, great post but who are you addressing this to? I mean, are there any Venture Capitalists (left) in India? I’d love to meet them! You see, like most things, India (read Indian VC’s) is one step ahead. The VC’s have ‘leap frog’ed’ and have become Private Investment Managers interested in Growth Opportunities, read pre-IPO deals, and delivering alpha returns. Like most industries, there is a serious talent crunch within the VC community, with most folks playing the role of, and acting like Wall Street boys on ‘payroll’. Many of them learn about industry dynamics from the guys who pitch to them. I don’t know of any VC in India who has taken the effort to go see an entrepreneur. They are happy to sit in their Ivory towers, because you see, the deals will come to them. I though you were half joking when you mention “share thoughts on the trends that you see in the industry & from companies that are pitching”. Asking them to take one big risk a year is like asking the Govt of India to implement Pension Reforms.

    1. I did not want this to be a VC bashing piece as much as a request for help. VC’s in India play an important role in helping entrepreneurs build great companies.

      1. Agree 100% Mukund; and I do not want to bash any VC either. My comments were based on just my personal and limited experience with some of them, and I’m sure there are (some) VC’s in India who help entrepreneurs build great companies.

  2. Completely agree with the observations. Especially those that have been an entrepreneur and been through the journey have no excuse not to take a chance on a fellow entrepreneur. Given that the batting average is less than 300 for most VCs wonder what they are worried about. It just needs a Y-Combinator or 500 Startups kinda investment approach where you are really investing in the first couple of milestones.

  3. Venture Capitalist? Who is that? In India there exists no such thing as venture capital.

    No entrepreneur in India should pitch to these guys and they should starve for deals. These guys like Ravi said reforming this industry is like reforming the pension plan in India.

    1. Abid, that was not my intention. I know personally, many VC’s that are great. We are entrepreneurs need to also work with them to build great companies.

  4. hahahahaha… some one had to bell the cat, you did it – congrats… Mukund…

    just coz one has money alone… doesn’t mean that he has enough knowledge… it his money and our knowledge which wins the business…

  5. Our knowledge and “their” money? Well, THEIR money is visible, but in most cases OUR knowledge is untested! This is the wrong attitude to even begin to snare a VC or fund!

    1. @ B S Kumar, I will have to disagree with you. IMHO, what is untested is the ability to execute on the particular idea the entrepreneur is pitching for, since the bio’s would tell a VC a lot about experience, and no VC will commit without a ref check.

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