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Showing posts from September, 2011

"Mistakes to Avoid in PE Fund Raising"

Extract from an Economic Times article by Manish Kanchan, Managing Director of SAGE Capital.
Very often we see entrepreneurs consulting with well wishers, old-time chartered accountants or their loyal CFOs during the deal-making process. Usually this is the first time anybody is dealing with private equity transactions and are therefore completely out of their depths. Sometimes, they are also insecure about their own future position in the company.

...Investment bankers are your allies. Choose them based on their track record of having closed similar transactions Ask for references and speak with them. Do not appoint them based on the valuation they promise you. Investment bankers do not sign the cheque. Once appointed, trust them and encourage them to provide you with honest feedback directly. The same applies for lawyers as well.

...The business plan must be realistic with a slight optimistic bias. It should also be linked to past performance. If the business has grown at 15% over las…

Profile of Online Jeweley Retailer CaratLane

Extract from The Economic Times profile of Carat-LaneOnline jewellery retail portal Carat-Lane aims to bypass the hiccups that have laid low a number of e-commerce players, by adopting a two-pronged strategy – building its own delivery network even as it increases the geographical footprint.

... Sacheti, who co-founded the company with Srinivas Gopalan in 2008, expects to service more than 100 cities in India by the end of the current financial year. The company expects to post revenue of . 100 crore for financial year 2011-12, a 50% rise from the previous fiscal's top-line numbers.CaratLane, which specialises in the sale of solitaires and diamonds, is now considering entering different product categories such as watches, to diversify its range, but only in a phased manner.

"We have sold more than 3,000 solitaires in 2010, which has led us to believe that sustainability of jewellery is much better than product categories of lower value," Sacheti said. The margins are bette…

Super Angels Pitch: Meracareerguide.com

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Deal Alert: Franklin Templeton PE invests Rs.45-Cr in Symbiotec Pharma

Edited excerpts from the Press Release:

Franklin Templeton Private Equity Strategy, a private equity portfolio advised by Darby Asia Investors (India) Limited, has invested Rs 45 crore in Symbiotec Pharmalab Limited.

Symbiotec is engaged in research, development, manufacturing and marketing of research based Active Pharmaceutical Ingredients (“API”s) for corticosteroids and hormones. It has an extensive product portfolio of over 40 corticosteroids and hormones APIs and supplies its products to leading pharmaceutical companies in India and overseas including marquee names such GSK Pharmaceuticals, Teva, Ranbaxy and Cipla. The funds raised from FTPES will be applied towards backward integration by setting up fermentation facilities which is expected to improve the Company’s competitive positioning and profitability. This also is expected to help the Company to attract customers from highly regulated markets such as US, Europe and Japan.

Systematix Capital Services Pvt. Ltd was the exclusi…

Profile of software products firm CustomerXPs

Economic Times has a profile of the entrepreneurial story of Bangalore-based "Customer Experience Management" Software firm CustomerXPs.
Though the team was in place, it took us over a year to develop the first sample. By January 2008, we started taking feedback from prospective clients and realised that the product was becoming very complex. That's when we started interacting with Sharad Hegde, former Infosys chief technology officer, for his advice on simplifying the product. By mid-2008, he joined our firm as a consultant and also became an angel investor for CustomerXPs. He has invested about $1 million (Rs 4.6 crore) in the company.

Our deadline for earning the first revenue was August 2009, but we missed it because we couldn't close a deal. However, the silver lining was that we were upgrading our product, which was an ongoing process. Despite realising that selling software products is difficult in India — many such companies have been forced to change to softwa…

Off topic: Interaction with Constant Contact

This post is for the benefit of (and comments from) fellow paid content publishers.

Constant Contact, a web-based email newsletter/marketing service that we at Venture Intelligence have been using to send out our paid for Deal Digest Daily newsletters sent us the following message - out of the blue - yesterday:
Response (Kristen D)
Dear Arun,

I am sorry to report that your account, login name: "entureintelligence" (sic), has been flagged for uploading several industry spamtraps along with a host of problematic addresses.

As a result, we will no longer be able to provide Constant Contact services to you.

The marketplace associated with sending email has changed dramatically, and as a result, we have had to adapt our complaint tolerances and list management inspections to meet the current business environment. While we appreciate your consideration, we can not afford the risk and exposure associated with your account. High abuse complaints result in getting our servers blocked by IS…

Can Indiagames leverage the Disney connection?

Business Standard has an article on Indiagames' future under Walt Disney (which is in the process of taking over Indiagames' current parent, UTV)
Today, Indiagames works with original equipment manufacturers (OEM) as well as telcos like Tata Docomo, Uninor, and Idea. Large accounts like Airtel and Vodafone have grown 24 per cent year-on-year in FY2011. App stores have also fuelled the firm’s growth. T20 fever developed by Indiagames was among the top 10 games in Apple’s App Store.

Indiagames is perhaps the only company that has been successful in creating a business model for games via subscription. A Games on Demand (GoD) model was initiated for PC-gamersand has 80,000 users in 2011 from 30,000 in 2010 and is a solid contributor, generating Rs 8.2 crore of revenue in FY201, up from Rs 2.3 crore in FY2010. A user can download and play unlimited times, up to 300 PC games which are digitally delivered for a monthly subscription of Rs 200 and Rs 100 . It has also entered into the …

Starting Up @ MIT School of Business, Pune

From the Press Release: Starting Up, ET NOW’s show on India's start-up ecosystem, with an objective to promote and generate awareness on entrepreneurship & entrepreneurial skills in India; visits the MIT School of Business to conduct a one day special workshop titled 'Starting Up @ MIT'. The entire session will be recorded by the MIT Team & the videos will then be uploaded onto their online platform & become a part of the new entrepreneurship syllabus at MIT.

Prominent entrepreneurs like Samir Palnitkar, Founder of Shop Socially.com; Anup Tapadia, Founder of Touchmagix; Abinash Tripathy, Former Indian Head of Zimbra and now Founder of Infinitely Beta will be the main speakers at the workshop along with Sudhir Syal, Anchor & Editor of the show ‘Starting Up’.

The various topics covered during the workshop will include - How to write a business plan, the essence of starting up, evaluating start-up ideas, secret to scaling a business and the art of product innova…

Deal Alert: Taurus Flexibles ties up with Spain based Cikautxo s. Coop

From the press release:

Taurus Flexibles have announced their strategic association with Spain based Cikautxo s. Coop and Mondragon S. Coop to augment the manufacturing of rubber and plastic hoses for the automotive segment for international and domestic markets. This tie-up is being achieved by the acquisition of 50% stake in Taurus’ wholly owned EOU subsidiary in Pune created from the transfer of assets from the parent group. The joint venture company is called Cikautxo Taurus Flexibles Private Ltd. and has an estimated networth of Rs. 34 crores.

Taurus Flexibles is a Rs. 200 crores reputed domestic manufacturer of automotive tubes and hoses with an impressive track record, while with € 220 million turnover, Cikautxo s. Coop of Spain designs and manufactures parts and assemblies for diverse applications for the automotive industry. The company holds the repute of proving service to leading automobile companies in the world.

Commenting about the deal, Rishi Kshettry, CEO, Cikautxo T…

Businessworld cover story on Venture Capital

From the cover story profiling 7 leading VC firms: Helion Ventures, Nexus Ventures, IndoUS Ventures, IDG Ventures India, Accel India, Inventus Capital and Canaan Partners.
During 2004-10, venture capitalists invested $3.96 billion in Indian startups. Another $621 million has been invested this year, according to Chennai-based research firm Venture Intelligence. There is an established line of VC firms who have consistently invested through this period. Some are local arms of Silicon Valley firms such as Norwest Venture Partners and Draper Fisher Jurvetson. Others, such as Helion Venture Partners and Inventus Capital Partners, are independent startups themselves. By 2015, total investments will touch $10 billion, projects Bangalore-based VC firm IDG Ventures India.

...The numbers underline a few important facts about the Indian startup economy. First, there is enough innovation at the startup level to encourage risk capital to make bets over a sustained period. Second, if VC investments …

Naukri.com's Sanjeev Bikhchandani on the new e-commerce boom

Extracts from the interview appearing in the latest issue of the Indian Angel Network's newsletter:

As far as E-Commerce is concerned, it is becoming a big money game and you will see companies either succeed massively or blow up in style. What is somewhat worrisome is the tendency of some E-Commerce companies to scale up sales even if they are negative margin, the more you sell the more you lose. Investors also need to ask probing questions about revenue recognition practices. There are some smoke and mirrors out there. I expect sanity to return to this space sometime in the next two years. Excessive valuations will be corrected. The smoke will clear and dodgy accounting practices will be recognised for what they are. People will not be selling below variable cost anymore.

...For the most part people are starting off aping successful businesses in the West. You can’t blame the entrepreneurs alone for this, since these are also the models for which funding comes easier because the V…

ET Now's "Super Angels’ show: Countdown to the Grand Finale begins

From the Press Release:

‘Super Angels’, the ongoing series on ET NOW’s Starting Up – the home for start-ups on Indian television, has successfully completed 14 episodes.14 start-ups have pitched in their business plans to 4 of India’s most influential investors, competing for a spot in the grand finale where the winner gets an opportunity to raise funds between Rs.50 Lakhs & Rs. 2 Crores live on the show.

Speaking about the show and its format, Harshal Shah, Founder and Managing Director of Reliance Ventures said this “The format of the show is very hands-on, impromptu, and educational. It is also informative to entrepreneurs as the process of a formal or informal education in the VC space is not something that most Indian business schools are able to expose their students”.

Vishal Gondal, Founder of Indiagames said that the key difference with the show was with its format, “The format is spread over 6 months rather than the 1-2 months other shows have aired for. The 6 month perio…

Data Highlight: Schneider Electric gets turned on by India

Schneider Electric's June 2011 acquisition of a 74% stake in Luminous Power Technologies, the New Delhi-based provider of inverters, UPS and power storage systems, was the French electrical products maker's sixth Indian acquisition in the last 3 years.

Schneider's aggressive moves in the Indian market is part of a general rise in inbound acquisitions by European companies. While US-based companies continued to be the most keen acquirer of Indian companies during the first 6 months 2011 accounting for 18 of transactions (followed by Japanese companies which acquired 7), H1’11 witnessed 18 Europe-headquartered companies (including 4 from UK, 4 from Germany and 3 from France) shopping for Indian targets.

Data Source: Venture Intelligence M&A Deal Database and Venture Intelligence India M&A Report


SEBI Alternative Investment Fund Regulation 2011 – The Basiz Perspective

The following is a note on the SEBI - Alternative Investment Fund Regulation 2011 (AIF) prepared by A V Seshadrinathan ("Sesh"), MD of leading fund accounting KPO Basiz.

An Accounting and Tax perspective

The proposed AIF regulation has clearly demonstrated, that High networth Individuals and Qualified investors in the country are sizeable, have the knowledge to take on risks and are well informed, when investing into alternative investments. The alternative asset class itself, has been recognized as an mainstream investment for certain investors. The regulation at its highest level, seeks to prevent retail investors from straying or being induced to this asset class. Further the regulation also classifies Investment strategies based on objectives of the investment. Therefore, while the regulation caters to monitoring & regulating the liability side of the fund, it also ensures that monies are invested into assets or securities that match the philosophy & strategy, di…