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Former founders of DVD rental company Madhouse are back with another venture. This time it's not a classical startup but an advisory company to help startups kickstart their businesses. Sameer Guglani and Nandini Hirianniah have left their jobs at movie rental firm Seventymm, the company which acquired their DVD rental startup last year, to start Morpheus Venture Partners. Morpheus is a desi version of the Silicon Valley's famed Y-Combinator, according to Guglani.
The difference between Morpheus and Y Combinator is that the latter will give some seed capital to startups, besides loads of intensive lessons in entrepreneurship, bootcamps, alumni network and so on, and make them ready for venture funding.
But Gulgani's version will not give capital, while will provide everyting else. "Morpheus Ventures would pick up 4 to 8 per cent stake for this, depending on what stage the start-up is and what value we can add," he said. "We will take the companies to such a level from which they can easily raise next round of funding," said Gulgani.
Though Morpheus is more interested in technology space, it also plans to invest in areas such as retail, broadcasting, mobile and also healthcare. It does not have a fund at this point of time but it is open to raising one next year, Guglani said. Morpheus also plans to use networks and events such as The Indus Entrepreneurs (TiE) and Proto.
The model has had some success in the US and has so far incubated around 100 companies. Morpheus plans to give advise and mentor companies who are still at a very nascent stages of development. There will be close association with the portfolio companies for about four to six months where one partner will be assigned to each company. "Post that we will continue to be in touch, but we expect them to become self sufficient after six months," said Gulgani. " Morpheus is also panning to add one more partner in the near future. Each partner will look after three companies.
"We plan to hold our investments for 3-7 years because three years is when any early acquisition happens and seven years is when any strategic exit can happen" added Gulgani. Morpheus plans to include 10-20 companies in its portfolio for the first year and the first 'bootcamp' will be held in Banglore, which will require some of the companies to relocate.
Morpheus already has five companies in its portfolio which include - Foodathome, a Gurgaon based food delivery company; Instablogs, a social networking site and Commonfloor, a niche socialising portal. Though Gulgani has previously worked startups in mobile handsets domain (Sonim, Pelephia) he admits that his expertise does not extend to every field. "We have a pool of specialised advisers. So, part of the value add that we will bring in introduce the companies to the right advisers who can provide expert advise in that domain. They will be paid out of the equity which Morpheus takes," said Gulgani.