During the month of December, I had a chance to meet 10-15 investors, about 100+ entrepreneurs and many startup evangelists across the country from Mumbai (NASSCOM event), Hyderabad (TIE) and Delhi (multiple events) and Pune (iSpirt event).
There’s one theme for 2014 that emerged across all my conversations.
I dont know how I feel about that. Mixed. Some good, but more not so good.
Over 80% of the folks will be looking inward this year. Most investors are taking a long hard look at their portfolios and trying to make sense of them. Which ones to cull, which ones to double down on and which companies to tread water with.
That does not mean no new investments into new companies and ideas, but it does mean, the bar will be much higher in 2014 than in 2012 or 2013.
I think what it means is that you will see more Series A and Series B happening – follow on rounds for existing companies.
75% of the transactions you will see in 2014 and maybe 80% of the investment will not be the first check in a company.
At the early stage when I talk to Mumbai Angels, Indian Angel network, Blume ventures and Kae Capital, this year is one of putting more money into what you have already put money in.
In the series A stage, I spoke with Accel, Sequoia, Helion and Seed Fund. While they will continue to invest in new opportunities, their focus this year (70%) will be on the investments they have already made.
You will see the same among accelerators and incubators. They will spend a lot of time on their portfolios and see how they can help the entrepreneurs they have already invested in.
Which is why there’s an opportunity ripe for an early stage investor to put seed or pre-seed investments to work in 2014, which will bear fruit in 2015.
That also means if you are an entrepreneur with some funding and are looking to raise in 2014, talk early and often to your existing investors and be on their radar. Give them traction numbers, metrics and keep them updated.