Ask any venture capitalist what’s he/she looking in a potential investee and out springs a bundle of clichéd tick marks. If I skip the order, one permanent fixture is ‘team’ behind the startup. This is reasonable. After all the success of the investment would not depend so much on the present (read: product or the idea of the prototype) as much on the future (read: execution).

But then how does one weigh ‘team’? After all it’s a subjective call on whether the smooth talker with slick presentation slides is better in scaling up a business or a mumbling geek who shows spark of next generation thinking with skills to solve multi-variate problems. In the ideal world, the team pitching for funding would have a mix of both, though in the real world it may not be so.

Intuitive thinking would suggest one filter could be educational background. Surely, an Ivy League grad would be a better bet. But if Indian startup ecosystem has to grow beyond a handful of success stories, it cannot depend on handful of such temples of higher education.

Few months back one of our correspondents interviewed (MakeMyTrip’s Deep Kalra on acquisitions, funding pyramid for startups and listing internet firms in India) MakeMyTrip’s Deep Kalra. He made a very important distinction when asked to paint the changing shade of startup ecosystem in India now with the period when he started over a decade ago.

According to him, early-stage funding has become fairly easy for those from a privileged background or those from top B-schools or technology institutes, but for others it’s a rigour. He also raised a pertinent question– will the early-stage investors have the same regard for a person from a lesser-known college?

One may choose to dismiss the thought that there is a bias in the startup funding ecosystem as the well-heeled investors are, after all, rational people who believe in meritocracy. However, if top entrepreneurs share the feeling it surely has to be serious enough.

I attempted to test this to get a better picture. Picking all angel and venture capital deals of the Q4 of 2012 I matched it with the educational background of its founders. Bingo!

Half of over five dozen startups in India which raised funding during the period had at least one or all of the co-founders who passed out from IIT, IIM, ISB or one of the global Ivy League institutes/universities. Add near Ivy Leagues (my apologies to those unnamed institutes who may, even rightly so, consider themselves as good as the IIT/IIM/ISB trio in India) to the filter and this goes up to 75 per cent. This means three fourth of all startups which got funding last quarter had at least one co-founder with a degree from a haloed institution.

This proportion moves up further for VC funding deals as against angel funding where lesser mortals appear to stand a better chance to get funded.

So unless there is a ‘seasonal sampling error’ where early-stage investors prefer to back entrepreneurs from Ivy League during mid-autumn and onset of winter (farfetched!), there does appear to be some empirical truth to the correlation between VC funding and entrepreneurs’ degree from a top notch educational institute.

One can argue that the causal link is the other way round. That entrepreneurs of these top institutes are a smarter lot or many more from Ivy League are taking a plunge towards starting on their own, and so the correlation runs the other way round.

Indeed, a good chunk of those passing out of thousands of engineering and private MBA colleges in India are unemployable, let alone have a sound knowledge of their own subject. In that vein, it is reasonable to see people experience orgasmic delights from talking about an IIT/IIM alumnus.

However, there are millions of engineering and MBA graduates being churned out of the mill every year in India and a tiny chunk sport the IIT/IIM badge. Given the sheer number of the former, I doubt if the number of capable non Ivy League grads turning entrepreneurs is so small that it naturally becomes a minority when it comes to getting funded and thereby given an opportunity to scale up.

This leads me to believe there is possibly an underlying investment apartheid for startups looking to raise capital in India. It does not mean those with less exalted alma mater stand no chance, but the dice is certainly loaded against them, ceteris paribus.

Given that early stage funding landscape is just about evolving after having taken baby steps few years ago, VCs may have picked the low hanging fruit in the country. But the game is moving to a higher level now with some $1 billion worth of fresh (Over $1B in fresh venture capital money now chasing Indian Startups) VC money chasing Indian startups. Perhaps another look at the background of entrepreneurs who get funding later this year could throw some light if the situation is changing at all.

Either way, the breed of ‘have-nots’ need to shrink if the Indian startup ecosystem needs to take flight.

(Vivek Sinha is Executive Editor of VCCircle)

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