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March 27, 2007

"There's no short-cutting the VC process"

Speaking at Internet & Mobile Connect, Probir Roy, Co-founder & Director of Paymate, described how his company went about raising venture capital and the challenges during the process.

Saying that it took Paymate a total of 10 months from the time of active scouting for VC funding and eight months from the first meeting with the eventual investors, Roy broke down the time it took for various stages of the capital raising process. “The initial meeting to term sheet took 10 weeks. From the term-sheet to definitive agreement/shareholders agreement took six months,” he said. The money remittance however happened within four months of the terms sheet - prior to any formal agreement being signed up. “Don’t be daunted by paperwork, there is nothing you can do about it,” Roy added.

Probir Roy of Paymate

Pointing out how even a leading VC firm like Kleiner Perkins does not carry much name recall in India, Roy emphasized the importance of the VC investor being on the ground full-time in India. He advised VCs to turnaround quickly with their decisions to the entrepreneurs – even if their answer is a no. Mutual respect is very crucial aspect in the entrepreneur-VC relationship, Roy said.

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the private equity and venture capital ecosystem in India. View free samples of Venture Intelligence newsletters and reports.