Entrepreneurship & Economic Times – Power of Ideas

the-power-of-ideas1

I was invited by The Economic Times to attend a panel discussion for “ET – Power of Ideas” at Times of India’s Mumbai office this afternoon.  Its own words, The Economic Times (ET) describes the Power of Ideas as:

“The Power of Ideas, an initiative by the Economic Times, seeks anyone and everyone with an idea to come forward and realize their entrepreneurial dream. They are reaching out to people who might have great business ideas and are seeking funding to put their business idea into practice.”

The panel consisted of Venture Capitalists from VC firms like Battery Ventures, Nexxus Capital, Clearstone Private Equity and IDBI ventures. The discussion primarily focussed on how entrepreneurs can access capital better, what are the challenges faced  by them, how these can be overcome and how the face of the Indian entrepreneur has changed over the years – where we were happy to get a perspective from Mr. Jitender Balakrishnan of IDBI – a veteran in this space and someone who has worked with the likes of Mr. Dhirubhai Ambani.

Some of the key points that came out and were discussed include:

  • Typically, venture capitalists are interested in: a) Execution; and b) Scale.
  • With regard to focussed sector-specific funds, the mature Indian entrepreneur knows which funds to go to.
  • 10 years back it was much easier for an entrepreneur to raise capital. These days the “risk-perception” tends to cloud the view of the lender / venture capitalist.
  • However, it has become tougher for the heartland entrepreneur to access capital, since a lot of VCs / PEs are in the cities and the heartland entrepreneur is simply not aware that opportunities exist.
  • The Indian entrepreneurs are probably the most capital-efficient – possibly because resources are always scarce for entreprenuers!
  • The Indian entrepreneurs are also the most stingy when it comes to giving out equity. Sometimes they do not want to part with stake even if it hurts growth.

Another very interesting point which came up during the discussion was the fact that entrepreneurs are ‘outsourcing’ the process of arranging for funds to ‘intermediaries’. Often this is done because the entrepreneur might not be aware of the ‘tricks of the trade.’ For instance, he might not know finance jargon, or the nitty-gritties of  preparing a business plan. However, the VCs were not too happy with the idea of outsourcing to intermediaries because:

  1. They did not like the idea that the entrepreneur would be “coached” by the intermediary into giving them answers that “VCs expect!”
  2. The entrepreneur should ideally understand the details of funding himself – first hand!

— IN A NUTSHELL —

Some of the major factors that VCs / angel investors consider while committing funds to an entrepreneur are:

  • What is the size of the market?
  • Who are they betting their money on?
  • What is revenue model?
  • Who is the person being referred by?

Of course, ‘Who is the person being referred by?’ does raise some eyebrows but one of the panelists (himself a venture capitalist) admitted there are  certain systemic inefficiencies that, perhaps, need to be weeded out of the system.

So, what are the qualities that VCs look for in an entrepreneur?

  • Is he a leader?
  • Can he inspire people?
  • Does he have integrity?
  • Is he transparent as an individual?
  • Domain experience is necessary but not sufficient.

ET has already received close to 2,500 entries from all across the country and they expect the number to go upto 3,500 by the time the registrations close – That is quite a response, considering that we already have many such fora in progres in India right now – with the likes of The Indus Entrepreneurs (TiE), National Entrepreneurship Network (NEN) and Proto, which are doing a lot of good work in this space.

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3 thoughts on “Entrepreneurship & Economic Times – Power of Ideas

  1. nicely covered. Yeah ET is doing all to market POwer of Ideas (which is the tag line for competitor Ananda Bazaar Patrika, by the way 🙂 ) But anyway, nice follow up stories…and i liked this feature where they talked abt innovations…nicely covered stuff…also innvations post Gr8 Depression….

  2. Hey nice article , My 2 cents,

    1)Who is he referred by?
    This is a very dodgy and subjective thing.There have been successful CEO’s who have run multi million dollar business but have failed to succeed when started on their own,even though their resumes and contacts might be impressive,rather than that why not give importance to the idea.

    2)Can a VC firm/angel investor have an online B-plan submission portal where one can borrow upto small amounts let’s say upto 20,000$ or Rs 10 lakhs as seed capital once the idea is approved the funds get transferred to an online account as soon as the person sends back a signed contract.The Approval and disbursal must happen online.(TiE,NEN can also help in this)

  3. Dear Sir,

    GOOD MORNING, I am I.V. SUBBA RAO, I Have developed advanced new technology, it is named as iron ore pellitization. Still it is not introduced in India for small and major sponge iron manufacturing industries.

    We are planning to set up 50 T.P.D Commercial production plant, its cost is around 24 Cores, but we are not financially sound enough. We have recently applied for patent rights, regarding this technology so many domestic and other country small scale sponge iron manufactures are contacting through mails and through phones. Lot of customers is interesting to utilize our technology, while before that they want to see the operation plant personally.

    If I set up 50 TPD plant id both ways it is like to pellet plant as well as commercial production plant.

    If any one help me financial loan of Rs 24. 0 Cores (Indian currency). I will set up the plant as early as possible (6.0 to 8.0months).

    After starting the commercial production we will start clearing ours loan immediately, other wise if want sponge iron material we will supply the material (just like barter system).

    But I can not show you any security like property or any other documents also, because I am a normal private employee.

    I am waiting for your early response.

    Thanking you,

    I.V.SUBBA RAO

    RAGHUVAMSI TECHNOLOGIES

    Ho.No.14-5-11.

    OPP.BATCHU SRI DEVI HOUSE

    SHIVALAYAM STREET

    PEDDAPURAM

    PIN:-533 437

    ANDHARA PREDESH

    INDIA-533437.

    MOB:-09490188826

    IF YOU WANT PLEASE SEE THE NOV2007 INTERNATIONAL STEEL MAGAZINE

    New Technology of Iron Ore Pelletization for DRI / Sponge Iron

    New Generation for Sponge Iron Steel Plant / Industries

    I have developed & Research one new technology in Sponge Iron i.e. Iron Ore (powder) Pelletisation. This concept is developed physically and practically. After completion of this experiment we have tested this material by Joyti Spectro Analysis Pvt Limited, Hyderabad .

    Presently, Iron ore pellets are being used by the small plants as well as big plants in India . It is natural material, that the raw material receiving from the iron ore mines in this material 20% to 25% of powder (i.e, 0 – 5 mm) is available. Some plants of the mining ore is being used by the ARC Furnaces. Some small plants using the same are facing some problems. By utilizing the ore powder, we can get kiln coating & ring formation also. But, for removing the same, we have to stop the Rotary kiln, once, from 60 to 90 days. Not only that, certain precautions, like separation of unburned coal, separation of unburned pallets from the Sponge Iron, material received from the kiln, before dispatch. In the present circumstances, they are using injet coal, coal lumps, coal chips,& lime stone may be used as fuel in Rotary Kiln. Still ore (i.e., 0.5mm) is not being used higher quantities.

    This technology may be used in every plant, from 50 TPD plant to such a major plant’s. Without facing any problem Iron Ore may be used. By this technology we need not use injet coal / coal lumps / chips & lime stone in the raw material and also no need of separation after receiving from kiln. By this technology 20% to 25% ore of wastage powder from mines may be used, so that the cost of Fuel & production cost will be decreased.

    Lakhs of tones deposits of iron ore is available in Indian iron ore mines, like Karnataka, NMDC, Madhya Pradesh and Goa . Out of which 40 – 50% is being used and out of the rest of the some is being got exported to the other countries like, China , Japan , Germany etc. By this technology 80% to 90% of ore powder (0 – 5mm) material may be used by small or major plants without any problems.

    This opinion is being expressed after keen observation on this technology, since 2 years. Interested persons may contact for more details & information to the below Email address.

    Email ID: raghuvamsi2007@yahoo.co.in, rvit_2007@yahoo.com

    Thanking you,

    I.V.SUBBA RAO
    RAGHUVAMSI TECHNOLOGIES
    Ho.No.14-5-11.
    OPP.BATCHU SRI DEVI HOUSE
    SHIVALAYAM STREET
    PEDDAPURAM
    PIN:-533 437
    ANDHARA PREDESH
    INDIA-533437.
    MOB:-09490188826

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