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!