What differentiates the post-1999 phase from earlier days is the dominant role that venture capital played in funding startups. No longer did one have to go to banks and give collateral to get a startup funded. This was pure risk capital with some value-add. No longer did one have to think of an IPO to raise capital early in the life of a company. Today, India has over 50 VC funds and private equity funds operating in the country. Estimated investment of risk capital in 2001 is US $1.5 billion (Rs 7,200 crore) against just over US $1.0 billion (Rs 4,800 crore) in 2000.

By 2005, expect VCs to invest over $10 billion in myriad start-ups.

A key element of risk capital investing includes availability of professional teams founding startups. With Indian entrepreneurs recognised as world class, in the technology and some brick-and-mortar sectors, the next five years will witness more experienced professionals leaving the confines of the corporate world and forming startups. VCs will encourage this trend. An experienced team with a successful track record and ethical management practices is the biggest de-risking factor for VCs. By 2005, I expect Indian entrepreneurs to absorb investments of over $10 billion per annum from VCs and private equity players.

India has also seen the slow but steady emergence of an eco-system that promotes entrepreneurship. The eco-system consists of a non-regulatory environment and a regulatory framework.

On the non-regulatory side, the eco-system's constituents include lawyers and investment bankers familiar with risk capital investments and structuring, as well as university and industry associations and alliances. Interestingly, academic institutions have seen an inflow of capital enabling research. A safe job is no longer sought after, and failure is not a taboo. Serial entrepreneurs are emerging around the corner.

On the regulatory side, we must do more to encourage professional fund managers to raise capital, especially from domestic markets. We should facilitate investments in not just the IT sector but also manufacturing and services, and encourage M&A between domestic and foreign companies and enable easy exits. India's VC industry is small. So we need a regulatory framework to encourage growth of rupee funds, which constitute less than 20 per cent of the total investments in India.

Regulatory reforms will encourage fund availability from VCs at the seed and early stage of funding (this was scarce in 2001). On the exit side IPO norms need to include a specific clause on capitalisation: ''Any company with less than Rs 25-crore capitalisation should not be allowed to go public.'' This parameter implies that the company is sound enough to attract risk capital of this magnitude before listing, hence has a higher probability of success as a sustainable entity. Capital of such magnitude can only be raised if more entrepreneurs with experience leave the corporate world, surely a boost for professionals to start up.

To get world-class entrepreneurs from India, the role of risk capital needs to be emphasised. And both it and non-it fields must be nurtured. Only then can Indian entrepreneurs absorb all those billions by 2005.

The Art Of Spotting Opportunities: India is like a blank canvas to the entrepreneur. Painting requires the ability to visualise the picture and the colours, gather the paints, and apply the brushstrokes. With the big picture increasingly clear to many, the opportunities will be snapped up- like never before.

10 Trends Driving Entrepreneurship
SMALLER GOVERNMENT As the size of the state as an employer shrinks it will spur private enterprise	NUCLEAR FAMILIES With emore women working, a double income in the family will allow more budding entrepreneurs to take the plunge.	EASIER MONEY With banks getting more entrepreneur-friendly and venture capitalists spreading their wings, money will be more accessible.
LESS ECONOMI CONTROLS As bottlenecks and entry barriers come down further it will make the entrepreneurs' life easier.	TECHNOLOGY With new technologies come new opportunities.	JUST-DO-IT IFFECT Entrepreneurial success stories in the peer group will spur to take the risk
GROWING SERVICES The low-capital option for the small-scale entrepreneur.	GROWING CONSUMER CLASS More types consumers lead to more entrepreneurial opportunities.	INSTANT GRATIFICATION An instant-mix generation that will reach out for quick success.
GLOBALISATION As barriers come down opportunities will increase.