The India story is still encouraging despite a few hiccups in the startup space. Panellists at the News Corp VCCircle India Limited Partnership Summit 2017 believed that the failures have been just-in-time teaching moments to achieve the next level of growth.
The premier summit, titled Alternative Investment Funds in Asia: Finding the silver lining in the emerging markets, hosted India’s leading PE funds, top global and Indian LPs, and other major players in the private equity ecosystem.
The agenda of the summit included a session on the deployment dilemma for Indian VCs, especially when the startup ecosystem is going through a churning. “I really don’t believe it is total doom and gloom. India has outshone everyone in entrepreneurial talent. I think we just need to orient them...that is where the next wave of consumer internet should be,” said Jungle Ventures managing director Amit Anand.
Fakhri Ahmadov, CEO and managing director, Ahmadoff & Company, a family office and wealth advisory firm, also echoed similar views. “I think India is now becoming so important because its demography has combined with knowledge industries. Now, it is easy to enter the market without being in the market.”
Most panellists believed that there were lessons for both entrepreneurs and investors from the mistakes, and they are now sounding cautious about the quality of investments and the running of a company. “People (entrepreneurs) are listening a lot more now, and the ecosystem is learning. We are telling our guys (to focus on) the basics – if you have taken money, make sure the unit economics works. Earlier, it was all about gross merchandise value. But now, people are focusing on clean numbers, transparency and stressing on the business,” said Niren Shah, managing director, Norwest Venture Partner.
Anand felt VCs and investors also need to show a little bit more spine. “There are interesting companies in all our portfolios, but just because a hedge fund does not believe in the potential of a business does not mean that we should not go ahead with the investment.”
“I think we do a very poor job of LP communication. I have met hundreds of LPs around the world and they have an extremely poor understanding of India, and the tech opportunities in India. In that context, I think, we need to do much more than what we have done so far in explaining to the world what the India opportunity is all about,” added Anand.
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