A question for the VCs…

And for the early stage investors, seed investors and angel investors 🙂

There is one thing I would like to ask the VCs in India today. Name some of the companies you have invested in which didn’t do well. Whenever you see any VCs, they always talk of the investments that have done well. Somehow, that doesn’t tell me how much of risk you take while investing in companies. This is especially true of those who claim to do early stage investments. If none of the companies you invested in failed to take off, that probably means you are making far too safe investments. If you look at the kind of questions even the early stage investors need an answer to, they just seem like VCs dolling out smaller amount of money. Doesn’t quite fulfill the purpose or early stage funding.

I am not cross or anything. In fact, I have quite started to believe in the idea of boot-strapping, despite it being a tough thing for consumer facing businesses to do. But if you get some support from friends and families, it may just be possible. But I do feel that the situation is not that encouraging for all the hoo-haa that is created around VC money flowing in India.

We need real angel investors, who invest with their intuitive sense rather than by their financial number crunching sense. Yes, yes – I know financials can not be set apart. But still the primary driver of a small investment in the angel stage has to be intuition. Somebody who shares the passion of the founders for the idea. And I think it would not be possible for the firms to become real angel investors. A group of people would invariably fall for deep analysis and resort to “objective” measures like financials. Plus the way VC firms work also makes it difficult because the VCs are essentially using other people’s money. So, they can’t take risks personally.

I guess we need more wealthy individuals in India :D, who would invest small amount form their own pocket – so that they don’t have to answer to anybody else, who would invest in whacky ideas, who would lose at times (but that loss wouldn’t be very great for them) and win at other times with spectacular success.

Let’s see if we see some like those around! Some real angels!

This entry was posted in Business & Entrepreneurship by Jaya. Bookmark the permalink.

About Jaya

Jaya Jha is an entrepreneur, a techie, a writer and a poet. She was born and brought up in various towns of Bihar and Jharkhand. A graduate of IIT Kanpur and IIM Lucknow, she realized early on that the corporate world was not her cup of tea. In 2008, she started Pothi.com, one of the first print-on-demand publishing platform in India. She currently lives in Bangalore and divides her time between writing and working on her company's latest product InstaScribe (http://instascribe.com) with a vision to make it the best e-book creation tool. Blog: https://jayajha.wordpress.com Twitter: @jayajha Facebook: http://facebook.com/MovingOnTheBook

10 thoughts on “A question for the VCs…

  1. Getting investments from VCs in India is very hard, they take only safer bets. I guess at this stage of your business you should see only Angel investors. But don’t take money from any wealthy individuals, get ‘smart money’ – money from an individual who could help in your business too.

  2. You might not need it (or might have already read it), but just in case — this book could possibly help you in understanging the legal implications of VC/Angel fundings.

    “Lifecycle of a technology company; step-by-step legal background and practical guide from startup to sale” … by Miller, Edward L (John Willey, Pub).

    All the best!

  3. Pingback: Entrepreneurship and Venture Capital « Miles to go…

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