I've been a seed-level funder for some 8 years now, earlier through Passionfund and now through (duh) Seedfund.
And there are a few others like me - Pravin Gandhi of Infinity Venture (also now at Seedfund) is one name that comes to mind - who have concentrated small bits of money and large chunks of time to make good companies. (My typical investment in any one firm used to be about $250k, now it's closer to $600k - and I think that's quite ok for an early stage company in India.) Pravin helped build Indiagames and Indiabulls. I've got Geodesic, Webdunia, Pinstorm, Indiaproperties, Cypherix and a couple more in my past I'm not too ashamed of. As Seedfund we just invested in a car portal, a bus reservations site and a chain of web-enabled printshops in the last 6 months and we've got a few more lined up. None of these are travel, mobile or 2.0 plays My $0.02 Mahesh -----Original Message----- From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED] On Behalf Of Ravi Pratap Maddimsetty Sent: Wednesday, May 16, 2007 12:27 AM To: silklist@lists.hserus.net Subject: Re: [silk] Lack of seed level funding in India: further thoughts? On 5/14/07, Udhay Shankar N <[EMAIL PROTECTED]> wrote: > Vinit Bhansali wrote: [ on 06:31 AM 5/15/2007 ] > > >After all ... Many of the variables are similar .. It's not like different > >issues/services/technologies are being used in different markets. Same GSM, > >same J2ME, same .Net, same AJAX, same e-commerce. What is definitely > >different is the value of each customer or each eyeball (a $20 book on > >Amazon vs. a Rs. 200 book on FabMall (yeah, name changed, I know!) and a $3 > >adsense price for a US click vs. a Rs 5 value for an Indian click!) > > > >So don't go around angel-investing the same 5 lakh dollars .. Rather invest > >50 thousand. > > Well, there a couple of things preventing that. > > The primary reason is that, ironically enough VC firms are flush with > funds. Let me explain this with an example: A VC firm raises a fund. > It tries to raise, say, $100 million, but in today's environment, is > more likely to end up with more than that. The average VC firm has > 3-5 people looking at investments. With each person being able to do > justice to say 5 investments at a time, that already means that the > average investment is AT LEAST $4 million. > > Poof! There goes your early/seed stage deal. > > Other reasons center around the risk appetite of VCs in India, but > that's a topic for another forum entirely. There's an interesting article by Paul Graham[1] that talks about most VCs are actually not really quite that revolutionary in their thinking. He attributes a lot of the gumption that investors need to create great companies to angel investors, and there certainly aren't that many in India, let alone a specific area like B'lore. I personally think (and have gathered) that a lot of the startups that are mushrooming are actually "me-too" companies, trying to replicate Silicon Valley/American models in the Indian market. Some of them are doing alright, and they're the ones getting all the funding, and a many of them I don't expect will really create the kind of companies that change the landscape. How many deals can you count in the last year that were not in travel, mobile, social networking, and the like? I'd love to be disabused of my notions if somebody thinks that's what is necessary. Ravi. [1] http://www.paulgraham.com/guidetoinvestors.html
