The Venture Intelligence Blog

Unitus Ventures has put up some interesting data and charts on the typical capital invested, valuation and equity dilution that startups - especially impact focused ones - witness in the Indian context (including at the time of exit).  In the lowest-case $20M exit, founders plus employees are making a little over $1M, while financial investors are making a tiny multiple or losing money. At the rather optimistic exit valuation of $60M, founders plus employees take home nearly $11M, and each series of investors make a fine total return, achieving overall objectives. ..life is pretty good for pre-seed investors in any exit on this chart, and they make 19-52x return between $30M and $60M. Seed investors...don’t make a ~10x return in this model until a $60M exit is achieved.  Series A investors who have a similar risk profile and return potential only see a 5x return at $60M exit. ...There have been very few examples of venture-funded businesses achieving over $50M e...

"Valuation markdowns, down rounds, business model pivots, shutdowns and investment write-offs have become the staple this summer for India’s venture capital market. However, there’s still plenty to cheer about." In a LiveMint article, journalist Snigdha Sengupta quotes Venture Intelligence Data on Investor returns in Equitas Holdings: The most recent and notable example is the public market debut of Equitas Holdings. The Chennai-based MFI (microfinance institution) mopped up Rs.2,176 crore from retail and institutional investors, drawing demand for more than 17 times the number of shares on sale. Importantly, it served up exits for as many as 10 venture capital investors, reported Business Standard (image below). Among them, impact fund Aavishkaar Goodwell made more than 13 times its money on a $1.5 million investment made in March 2008, said the report citing data compiled by Venture Intelligence . Venture Intelligence continues to provide timely reports on PE/V...

The Firm show on  CNBC-TV18 has a report enquiring into why the leading Indian stock exchanges - BSE and NSE - haven't gone public themselves - especially after raising Private Equity capital with a clear understanding that such investors would seek profitable exits within a few years. With no revert from SEBI on clearances for the exchange IPOs, the PE investors in these exchanges have written to the Finance Minister and speak openly about their frustration. View the report video here  and  text version here . Extracts: Sohil Chand, MD, NVP India: “I think what is important is to see what has happened to the multiple and the Rs 3,950 represents a multiple of only 14 times trailing earnings. When we look at comparable stock exchanges, the listed stock exchanges whether it is Hong Kong or Singapore or other comparable markets, they traded 30 times forward earnings. So, in our estimate the NSE right now, the private markets are undervaluing it by 50 percent.” .....

Venture Intelligence is the leading provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India. Click Here to Sign Up for the FREE Weekly Edition of the Deal Digest: India's First & Most Exhaustive Transactions Newsletter.

Cross Posted from the Entrevista blog . Interview with Raj Nair, Founder-Chairman of Avalon Consulting , the Mumbai-headquartered, international consulting firm and also research and analytics firm Ugam Solutions and artificial intelligence software firm . Interview begins with how Ugam Solutions' founding & funding - especially how the company "pivoted" to completely new business in 50 days flat! The interviewer is fellow entrepreneur Chandu Nair . Chandu earlier founded, successfully raised venture capital for and exited from Scope eKnowledge, one of the earliest KPO firms in India. The Audio (podcast) version can be downloaded from here   Highlights: Striking balance between Flexibility & Measurement in the Early Years: In the initial years of starting up,  it’s important to have the flexibility to course correct and not put pressure on the business with a rigid business model, ambitious target, etc. “There is (however) a difference between cha...

Cross posted from the Entrevista Blog Interview with Ganapathy Subramaniam, Founding-CEO of Bangalore-based semiconductor tech company Cosmic Circuits. (Cosmic was acquired in early 2013 by Silicon Valley-based, Nasdaq-listed electronic design giant Cadence.) The interviewer is fellow entrepreneur Chandu Nair. The Podcast can be downloaded from here . (Use Right Click > Save As to save the file to your desktop) Highlights Reading the Wind How Ganapathy, as part of visiting customers in October 2012, realized that Cosmic Circuits could no longer remain an independent company. (Its customers and partners wanted a strong Number 2 player in the segment to provide a balance to the Number 1 player, Synopsis.)  Making the company Due Diligence ready How Cosmic's decisions to rope in a Big 4 audit firm (just five years into its existence) and go in for an ISO certification, stood it in good stead when it came to due diligence at the time of its acquisition. ...

Cross Posted from the Entrevista Blog In this audio interview ("podcast"), Palem Srikanth shares his amazing entrepreneurial journey - from a Stanford educated logistics executive with Hewlett Packard to returning to India and starting a Dosa restaurant chain to the tough lessons from making cross-border acquisitions to the recent sale of the logistics software business (to US Private Equity firm Francisco Partners-backed Kewill) for about Rs.275 crores.   The Podcast can be downloaded from here . (Use Right Click > Save As to save the file to your desktop) Highlights : Importance of Financial Strength in the Enterprise Software space How persistence and investing in technology (to ensure Four Soft's products  were cutting edge)  provided the maximum return - much more than the expensive acquisitions the company made  Managing the confidentiality of the transaction involving a listed company - so that there is no misuse of insider informa...

Cross posted from the Entrevista blog at http://www.entrevista.in Interview with Ratish Nair, Founding-CEO of Interactive Avenues (IA), the Mumbai-headquartered, Sequoia Capital India-backed digital marketing agency which was acquired in March 2013 by US- and Europe-based ad agency Interpublic. Interview focuses on the company's founding (5 co-founders who earlier worked at another digital agency Mediaturf); Angel Funding (from Anupam Mittal of Shaadi.com); VC Funding and relationship with Sequoia Capital; and, of course, the Exit (how IA ran the process, the role of the VC, the role of the intermediary, internal dynamics, etc.). The interviewer is fellow entrepreneur Chandu Nair . (Chandu earlier founded, successfully raised venture capital for and exited from Scope eKnowledge, one of the earliest KPO firms in India.) The Audio (podcast) version can be downloaded from here   Other Highlights Synergistic Co-founding team How, having worked together in the past (a...

From a post by Mukund Mohan of Microsoft Ventures As we start to invest in the early stage startup ecosystem in India, it is important to calibrate the possible returns and allocate funds associated with the returns. If most entrepreneurs in India are okay with smaller returns, it makes sense for us to allocate fewer fund here than China, Israel or Africa. From our experience at the accelerator, where, over the last year we have “invested” our time, resources and energy in 23 startups, we know that the risk appetite is much lower among startup founders in India, compared to those in Israel for example. We have already had 2 small “exits” and 3 closures in India. Israeli companies are still out there, fighting for their series A and beyond, while 1 company had pivoted dramatically in Israel, only to start again. Venture Intelligence is the leading provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A...

Chris Sacca of Lowercase Capital is an investor in several well known US consumer web, mobile, and wireless technology startups like Twitter, Kickstarter, Uber, etc. A lawyer by education, he earlier worked at Google. Highlights:   Personal story Amazing story of how he lost millions in leveraged trading and how he clawed his way back. "Fake it till you make it": Highly entertaining story about how, when he was out of job, he created a fake management consulting company, The Salinger Group, and handed out its card at various networking forums (including TiE). He even offered to let his friends who were also out of jobs to use the company's name! On Entrepreneurs  Truly Disruptive Entrepreneurs: Failure is not part of the options for them. They never doubt the outcome. They just think "the world will be a better place if this product gets built". "If I'm the one asking the entrepreneur 'how can this be bigger', then...

Cross Posted from the Venture Intelligence Entrevista blog : Latha Rajan & K. Pandia Rajan of Ma Foi ( B i o s ) In conversation with K. Satyanarayan , Co-founder of regional language publishing firm New Horizon Media. (Recorded on August 15, 2012 in Chennai.) Highlights: Takeaways for Other Entrepreneurs: (Click on the links for the video segments) Don't add artificial constraints when it comes to entrepreneurship KPR: Separating home and work, politics & business - we tend to have many boundaries where none need to exist. These are Western notions and mind blocks that we can revisit. Being a Husband-Wife Entrepreneur Combination was never a major hassle for us. In fact, as Latha says often, we would have probably fallen apart but for Ma Foi! Latha Rajan: In the early days, he used to travel 25 days a month and I used to travel 10 days a month. But since I was there within the system, I could understand (the pressures and issues). Both of us knew what we were workin...

Cross-posting from the Venture Intelligence Entrevista series: Lessons from the Startup to Scale-up to Successful Sale of iMetrex Technologies, a building technologies and security venture catering to the Indian enterprise market - The Venture Intelligence Team Rajeev Mecheri, Managing Director, Mecheri Smart Capital ( Bio & LinkedIn ) Interview by Hari Krishnan of Venture Intelligence, followed by interaction with students at the Department of Management Studies IIT-Madras on November 9, 2011. Highlights: Please click on the links below to view corresponding video snippets: Importance of Customer Touch Point “What works for the company, works for you (the founder)” Founders should separate their lifestyle needs from that of the business Invest Appropriately - in infrastructure, etc. Decision to exit and the "strength of a brand" Decision to integrate vertically (getting into manufacturing) Following the Customers Innovative holding structure for acquiring a product co...