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
