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 The
magic died a year ago. It's been many, many months since hotel lobbies
and coffee shops last saw business plans strewn about their tables.
Proposals have stopped flying into VC inboxes. Why, VCs themselves
are vanishing into nothingness. Yes, you do hear of the odd deal
here and there, but they're either after a company's gone public-or
just before it does. This is stockmarket gameplaying, not venture
capital.
Entrepreneurship, by all rights, should be
declared dead.
But wait a minute, just as we intone the drones
of "Dearly departed, we are gathered here today...", what
is that we hear?
Is it the pitter-patter of new ideas coming
out of our engineering colleges and business schools?
Are those the whispers of angel investors getting
together and saying "We've got to do something to get us all
out of this hole"?
Are we now seeing the foundations and institutions,
who sat out on the sidelines till now, perk up and say "I think
it's time we do our bit"?
I don't think I'm imagining things. I do hear
the faint tones of a new boom coming on.
No, it's not the noisy explosion of millions
of dollars being handed over to anybody who flashed the initials
IIT and IIM.
But it's a quiet rumble nonetheless.
In my work with the IITs, engineering colleges,
business schools, and assorted other bright people around the country,
I'm coming across increasingly innovative stuff.
Not the "my VC read it in Red Herring
and told me to do it" types we've seen so far. But businesses
in robotic vision, ornamental fish farming and Very Large Scale
Integration (VLSI) circuit testing. Other proven technologies that
are already disrupting Videsh Sanchar Nigam Ltd's (VSNL) share of
telephony revenues and Microsoft, Yahoo and AOL's share of messenger
usage.
You don't get to read about it in the papers,
but it's happening right here, right now. In India.
It's not just the ideas getting right-sized,
but the funders are different too. No longer competing with seven-figure
dollar sums, today's investors are talking more realistically, in
seven-figure rupee sums. I know two groups of angels that are syndicating
funds to reignite the startup flame. Hopefully more will come out
of the woodwork.
And do it the right way. Focusing not on investment
bankers-turned-VCs, but on commitments of money and mentorship from
experienced entrepreneurs.
I believe the markets are getting friendlier
too. More folks are noticing that the BSE may be far better than
the Nasdaq in getting an exit. Acquisitions of Indian companies
are warming up too. As an investor who's been fortunate enough to
have seen both-an acquisition and an IPO-from my portfolio, I'm
smelling more around the corner.
The government was making the right moves too,
till it was recently derailed by the George Fernandes anti-privatisation
Nehruvian nonsense. Why can't the man accept that (a) JNU jholawala
socialism is dead and (b) he knows nothing about business? Worry
not, the force of entrepreneurship will eventually road-roll over
the back-sliding of retrogrades.
The new rules for startups are blindingly simple:
If someone else has done it anywhere else in
the world, forget it.
If the idea is to do something cheaper because
of cheaper labour here, forget it.
If it costs much more than Rs 50 lakh in the
first year, forget it.
The nice thing is these dicta are no longer
taken as heresy, more people are taking them to heart. Perhaps your
correspondent has played a minor role in this conversion.
With some active help from colleges, groups
like tie, angels and post-9-11 returnees (and active non-interference
from our ministers and babudom) we can start this engine firing
again.
This time, we'll be at the right speed. And,
more importantly, on the right track.
Mahesh Murthy, an angel investor, heads
Passionfund. He earlier ran Channel V and, before that, helped launch
Yahoo! and Amazon at a Valley-based interactive marketing firm.
Reach him at Mahesh@passionfund.com.
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