I've noticed this for a while ... But does this group have more to add to identify the reasons behind this lack of funding newbie's other than the usual catch-22 "I'll fund you if you already made money on your last venture" ?
- Vinit ---------------------------------------------- http://www.hindu.com/thehindu/holnus/006200705141124.htm 'Many potentially good companies fall by the wayside' By D. Murali and C. Ramesh Chennai, May 14: Billions of dollars are pouring into India via the venture capital (VC) route as more and more US-based players set up shop in the country to ride the next big growth wave. However, the increasing interest in investing in India has not translated into easier access to capital for entrepreneurs at the angel and truly early stage levels, says Ms Anjana Vivek, co-founder and CEO of VentureBean Consulting, a Bangalore-based firm that works with early stage ventures and companies in transition, including those looking at funding options. Speaking to Business Line, she says that startups needing less than $1 million still find it difficult to raise funds. "While many noises are being made, we do not see funding to the extent it is required in this space. This is a bit of a worry for the industry as a whole. While everyone seems to agree that this requirement is to be met, there are very few risk takers for this space." She goes on to ask: "If we do not have seed stage and very early stage funding, where will we get enough numbers of companies eligible for VC funding?" According to her, it's a lot like the link between the number of college-going students and students who have gone through primary, middle and secondary school; you don't have many of the former if there aren't enough of the latter. "Similarly, most companies need the funding at the idea, seed and early stages to take them to the level of VC funding. These are typically companies for whom loans are not advisable." [... Continued online ...]